New research into the impact of hybrid work suggests employers could make substantial savings by downscaling workplace size and revamping office design.
The findings are the result of a wide-reaching study by leading occupancy analytics provider Relogix that examined work practices in more than 250 offices across all major business sectors. The study compared office place usage between April and September in 2019 and during the same period this year to reveal just how much the rise of hybrid working was affecting the way in which physical workspaces were utilised during regular business hours. Researchers then looked at how this shift related to leasing costs as well as the effectiveness of their design. The bottom line was that the popularity of working from anywhere, and spending minimal time in the office, was handing organisations the ability to significantly cut their spend on physical space.
Filling data gaps
“Hybrid work is here to stay,” said Relogix director of analytics and insights Sandra Panara. “It is critical for enterprises around the world to make sense of what this means for their businesses and their employees. The goal of this benchmarking study is to illustrate that empirical data is available and fills the gaps that traditionally consulted data sources have exposed.”
Technologies such as workplace sensors and people counters allowed Relogix researchers to go beyond tracking occupancy levels and uncover in-depth data about office utilisation – even down to number of minutes a day a desk would potentially be in use and by how many workers. In contrast, the occupancy metric alone would simply have indicated attendance at an office, not time spent within the physical space. The data showed that this year, desks were being utilised an average of 8% of the working day, or just 38.4 minutes in an eight-hour day, leading researchers to conclude that significant cost savings could be made if employers reorganised their workplaces to better suit usage as well as occupancy levels. All space types were examined, including desk, private offices, closed meeting rooms, open collaboration spaces, as well as ancillary and support spaces.
Crunching the numbers
Relogix calculated that hybrid working was now at such high levels that the total 120,700 square metres of desk and office space used in its study sample could be reduced to as little as 33,260 square metres. Restructuring these workplaces, which were basically still configured to suit pre-pandemic work patterns, would result in a reduction of leasing costs from about $44 million to just $12.5 million. Furthermore, organisations would be better off repurposing some of the redundant space to better suit their hybrid work models researchers found, and also replacing individual workstations with more room for collaboration and team meetings.
Freedom to choose
The study acknowledged that hybrid working was already gaining momentum prior 2020. Well before Covid arrived on the scene, workspaces were being under-utilized by 35% to 40%, with average occupancy in 2019 about 3.2 days out of a 5-day work week, data showed. The pandemic accelerated this considerably, workspace utilisation falling to 1.29 days a week this year as workers embraced the freedom that came with splitting work time between the office as well as home or other environments such as libraries, cafes and holiday homes.
What’s more, researchers found the workforce currently has its collective foot pressed firmly on the hybrid work pedal with no intention of easing off: average occupancy levels of 34% were recorded at both the start and finish of the study’s six-month sample period (April-to-September 2022) indicating that workers were defying the much-publicised and widespread push by employers for employees to return to the office.
Among other findings were:
- Desk and private office occupancy remained consistent month-over-month with little change in the previous six months, but overall usage was down.
- Private office occupancies were slightly higher each month in 2022 when compared to desk occupancy. Similarly, the average monthly difference for desk occupancy in 2022 vs 2019 was higher than the average monthly difference for private offices.
“From this data, we have received a better indication of just how varied occupancy levels can be depending on location,” said Relogix CEO Andrew Millar. “When considering occupancy analytics to unveil gaps and areas where organizations need to be more agile to support the work-from-anywhere world, it’s key for workspace assessments to go both wide observing trends and deep, to understand differences in-use by segmented data sets. The nuances found within the data of this benchmarking report can help organizations better develop and align their workplace strategy programs.”