Hybrid work continues to gain traction as the way forward. Of the businesses we surveyed, 37% work in the office full time, and 61% are hybrid. The majority of hybrid employees (87%) spend two days a week or more in-office. 

Hybrid work adoption clearly accelerated as a result of the pandemic and the cost-savings made it stick. Of those with a hybrid work model, 83% utilize it as a cost-saving measure. 

Only a fraction (11%) of businesses utilize 100% of their office space, with nearly 45% only using half their available space or less. For 48% of all respondents, that’s less than they utilized before the pandemic. 

In fact, 60% of those surveyed report that they reduced their office space since the onset of the pandemic, including moving to a smaller office or downsizing an existing space. 

Of those in a new or smaller space 81% have changed their office layout or design to support new office demands. These additions are made with flexibility in mind; areas for hot-desking and socializing are a staple of these spaces. According to respondents, they are seeing things like:

• Collaboration/huddle rooms (69%)
• Wellness centers (60%) 
• Quiet rooms (55%)

Of those we surveyed, 75% pay more than $51 per square foot for their office space. When asked if they plan to reduce their office space further in the next year, 46% answered yes. When we asked how much, 60% said they’d reduce their office space by 50% or more.

When we assume an average of 100-150 sq.ft. per employee and an office size serving between 250-500 employees, that could equal a lease reduction anywhere from $625K to $3M a year*. 

While many factors may contribute to an office downsizing, the threat of a recession is definitely top of mind with 62% sharing they worry a recession may impact whether or not they can keep their office space entirely.

However, 73% of companies – where the majority of employees currently work from the office – see the potential for hybrid work to stave off other cost-saving measures such as layoffs.

For companies that won’t consider hybrid work, even if it meant avoiding layoffs, 54% responded it was because they are “not willing to compromise on [our] in-office culture.” This group definitely didn’t get the memo.

Our data suggests that the next year could see a significant decrease in real estate footprint (REF) as companies look to lower overhead in an uncertain economy. This doesn’t mean the end of the office, just the reimagining of what’s possible. Especially if it means avoiding job cuts, which can hurt morale, productivity and competitiveness. 

Change doesn’t have to be overly complicated. For companies currently trying to decide what to do with their existing office space, may we suggest the following:

Forget the 1:1 Ratio

In a hybrid work environment, not everybody needs their own desk, and fewer desks mean less space. This provides an opportunity to move to a new, smaller office space or downsize an existing space through things like sublets.

Adapt to Adopt

You don’t have to have a smaller space to embrace flexible work. For companies who want to make the most of what they’ve got, there are other cost-effective measures you can take to rework, reimagine and refresh an existing office to meet the needs of a flexible workforce.

Listen Up

Nobody knows your office space better than the folks who work in it. Poll your employees to uncover how they’re using their space, what would make their experience better and what’s no longer used or necessary.  For instance, maybe your staff are no longer hitting the foosball table and, by freeing up that space you’ve suddenly created a new meeting room where employees can collaborate or other professionals can sublease.