Throughout 2023, there has been a variety of headlines about office occupancy hitting new peaks, workplace occupancy being better than pre-pandemic levels and occupancy rates reaching their zenith.
So, if hybrid is the answer, what was the question?
Sounds rather philosophical, but the point I’m trying to make is that, yes, hybrid seems to be the best way forwards, but its favourability in the longer term is yet to be proven.
It is fantastic to see 35% to 45% office attendance return, however, this compares with a pre-pandemic occupancy of somewhere between 60 and 80%, on average.
What does this tell us? That, even before the pandemic, somewhere between 20% and 40% of office real estate was being underutilised.
Even if we account for further growth in office occupancy rates, some 50% of current office stock is either surplus to requirement or could be at the next lease event.
Larger corporates have been the early adopters of the return to the workplace and have embraced the hybrid model, taking smaller but higher-quality office space to attract their workforces back into the office – many with a three-day ‘in the office’ requirement to maintain corporate culture and identity; manage stress and difficulties of junior colleagues missing learning opportunities.
However, as their research reveals, whilst the office “…remains a critical space for many knowledge workers to perform at their best…the physical workplace hasn’t kept pace, with two thirds of workplaces not changed since the pandemic.”
And herein lies the problem.
As the Economist recently reported in their article, “The working-from-home illusion fades”, it turns out that we are not more productive working at home than being in an office, after all.
Issues such as individual versus team productivity; lack of collaboration at the dining room table; increased co-ordination costs; and underdevelopment of human capital are all reported.
This, together with the tricky economic climate, is driving more businesses to get their people back in the office. Indeed, 94% of corporate real estate leaders polled by Leesman expect hybrid to become part of an office and home / 3rd space solution.
However, not all workplaces are created equally.