It May Start to Look Different but Hybrid Work Is Here to Stay

Hybrid work may be here to stay, but it’s taking on a different form than many originally imagined at the onset of COVID-19.

The market is still slumping, with data from Kastle Systems from August showing that US occupancy is somewhere between 43% to 44%, a level it’s been hovering since April. That figure is below 40% in San Francisco and San Jose.  And in addition to a record amount of sublease space hitting the market, nearly 243 million square feet of office leases are set to expire in 2022, representing roughly 11 percent of office inventory in the US, according to Colliers.  The widespread adoption of hybrid work is expected to cause a 15% drop in office space demand nationally.

“In recent months, the cracks in this work-from-anywhere experiment have started to show,” analysts from Colliers write in a new report on the future of work. “The office is not going away but it is certainly going to be utilized in a different way.”

That includes determining how much space will be needed in a post-pandemic environment — which in turn impacts the overall office market. According to Colliers Occupier Services, 77% of the companies it surveyed in June 2022 are using some sort of hybrid approach, up from 20% at the onset of the pandemic. And 69% of firms have a set number of days they require employees in the office, with most requiring three or more.

Knowledge workers in particular have been widespread adopters of remote work, but “there has not been a massive drop-off in demand for office space as most firms are enacting a hybrid plan,” the report notes. “An emerging trend is three days a week in the office and two days at home, which cuts back days on site by about 40 percent, however, not much space can be given back if the same amount of employees are still coming into the office.”

An October 2021 Survey of Business Uncertainty by the Federal Reserve Bank of Atlanta, University of Chicago Booth School of Business, and Stanford University of 445 U.S. firms found office space needs will decline by only 1.4 percent in 2022 and beyond, suggesting that companies are reducing the number of days employees need to be in the office without axing square footage.

So how can companies best leverage the space they have to meet this new model?  Proactive space planning is key, experts say. Around 49 percent of companies surveyed by Colliers say they anticipate making significant changes to their office space. That includes first improving upon the office floor plan, which Colliers’ analysts say should avoid row after row of facing desks in an effort to maximize density.

“Instead, leave some groups facing a wall and others facing another wall,” the report advises. “Free standing dividers, meeting rooms, whiteboards, and movable walls can also serve to interrupt long visual fields to lower the number of desks in view. Intimate meeting areas where co-workers can huddle up and collaborate on projects could help boost team cohesion and increase productivity.”

Colliers also recommends creating different zones within the office dedicated to different noise levels with quiet areas and white noise areas.

“Adding plants, natural materials, daylight, and fresh air have also been found to reduce employee stress and boost productivity,” they say.  ”Workers are now expecting more flexibility, better technology, and enticing incentives to come back to the office. Companies can use this opportunity to cultivate a more thoughtful office atmosphere. Conference rooms can be repurposed, new team areas can be created, and floors can be refurbished to address employees’ work preferences.