Employers Emphasize Experience over Efficiency to Measure CRE Success

Creating effective workplaces that benefit both employers and employees is more important than ever as organizations increasingly focus on workplace experience rather than efficiency when they measure real estate success.

This post-pandemic shift in priorities is highlighted by a disparity in target utilization rates of 65% or more by the majority of CBRE clients recently surveyed compared with actual utilization rates of just 38%. The data indicates an unsurprising reluctance among employees to return to a five-day, in-office work week, according to CBRE.

In addition, CBRE clients are increasingly shifting toward specific hybrid working models and are optimizing their portfolios to accommodate this change in demand.

Global occupancy rates have consistently exceeded 100% for the second year in a row. The average square foot per individual has dropped 15% as occupiers have implemented portfolio optimization and hybrid programs, and individual space has decreased 21% since 2021, according to the report. This has led to a 94% increase in target sharing ratios at or above 1.5 to 1 since 2021.

Regular measurement of workplace efficacy metrics can help identify successful workplace characteristics and develop strategies to enhance performance, said CBRE. About three-quarters of occupiers believe their workplace is effective, but less than half actively measure effectiveness, the firm said. Space utilization is one of several metrics companies that do measure workplace effectiveness, along with employee engagement scores as well as retention and attrition rates.

This year, CBRE clients have started to rely more on measurements such as employee sentiment and satisfaction and less on density and target-sharing ratios. About 14% of CBRE’s clients said they are emphasizing employee satisfaction and sentiment compared with 8% in 2023. Design density has dropped from 16% to 5% during the past four years, and people density has dropped from 14% to 5%.

“This surge underscores the increased focus on employee morale and happiness as critical determinants of overall business success,” said CBRE. Organizations can demonstrate workplace effectiveness and policy success using metric measurements that align with company goals, the report said. Nearly all organizations surveyed have a definitive workplace policy in place with minimal variation between target behaviors and workplace policy.

“Aligning targets with communicated policies can contribute greatly toward goal achievement but also enhance trust, transparency, consistency and productivity in the workplace,” the report said.