Firms look to consolidate office space in response to persistence of hybrid working

Many firms are taking the opportunity to consolidate office space presented to them by the persistence of hybrid workingWorkers able to work remotely are still only coming into an office for an average of 1.75 days a week, a study of 119 workplaces in 22 countries by workplace consultancy AWA claims. The responses, collated in April-May 2023 and representing organisations employing close to 155,000 people, saw a slight increase on AWA’s study a year ago, indicating that office attendance has reached a more or less steady state and that hybrid working is still a favoured solution.

AWA’s third Hybrid Index study suggests that organisations are responding to the shift to hybrid working by improving their desk use in offices and reducing their real estate needs. 37 percent of employers said they were planning to reduce their office space through disposals, subletting or consolidation. This is a result of the improved desk utilisation as organisations adapt to the new reality of hybrid working, with the percentage of desks in use on average rising to 48 percent from 33 percent a year ago.

However, AWA claims that three years since working practices changed at the start of the pandemic, 46 percent of offices do not have a hybrid working policy. Where employers mandate people to come into the office a specific number of days per week, the employees come in significantly fewer days, indicating that ordering staff back doesn’t work.

The main findings of the Hybrid Index study are:

  • Globally average office attendance rose to 35 percent, up from 29 percent a year ago. This follows the trend shown in the second Hybrid Index in late 2022;
  • In North America there was no discernible change, with workers coming into the office less than 1.5 days a week on average;
  • In the UK workers are attending the office 1.6 days a week, up from 1.45 a year ago;
  • Office attendance is far higher in Latin America – 2.15 days – and Asia – 1.8 days;
  • Workers continue to prefer to come into the office on Tuesdays, Wednesdays and Thursdays, though Monday attendance has improved. On Friday less than a quarter of employees chose to travel in;
  • 70 percent of offices in the study have less than 40 percent attendance. Only five offices have attendance rates of over 60 percent;
  • Technology companies showed the largest shift in returning to the office, with 32 percent average attendance compared with 15 percent a year ago;
  • Nearly two fifths of organisations (37 percent) said they would be looking to consolidate their office space due to reduced demand. This would be largely by subletting or through discussions with their landlord, though some are waiting for lease breaks or repurposing office space for other uses;
  • UK employers are the most efficient users of desks – needing just 59 desks per 100 employees – while the US is the least efficient – needing 107 desks per 100 employees;
  • Employees are not adhering to employers’ directives to attend the office. 46 percent of offices don’t have hybrid working policies, and they see people coming in on average 1.4 days a week, which is similar to firms that demand attendance two days a week. Where organisations mandate three or four day’s attendance, staff only come in an average of around two days a week.

Andrew Mawson, founder of AWA, said: “While the figures show a slight increase in office attendance, overall we think we may have reached a steady state on hybrid working. Savvy employers are using the new reality to become more efficient, improving desk use and reducing their real estate needs. We expect this to result in a gradual build-up of empty office space over the next 5-10 years as leases expire, with a resultant downward pressure on rents and asset values.

In our experience, hybrid working changes everything from employment contracts, skills, recruitment strategies, workplace design, security and more. While some organisations have taken a ‘let’s see what happens’ approach to hybrid working since the end of the pandemic, we believe it’s now time for all organisations to develop holistic hybrid working policies and address a wide set of issues to prepare themselves for the future.”