CBRE Research Reveals 3 Ways To Optimize Office Space for Hybrid Work in 2024

January 18, 2024
Hybrid Work
Space Design
Table of Contents
CBRE Research Reveals 3 Ways To Optimize Office Space for Hybrid Work in 2024

TL;DR Article Summary

Hybrid work trends have led to a significant shift in office space utilization, with a move towards space-sharing and real estate portfolio optimization.

  • Gensler's research categorizes essential office spaces into areas for group work, individual tasks, reflection, and refreshment, highlighting diverse employee needs.
  • Future office space optimization will focus on workplace experience, requiring CRE teams to prioritize employee-centric design and new performance metrics.
  • Optimizing office space in the hybrid work era involves understanding employee behavior and preferences, supported by space management tools like Skedda for informed decision-making.

Optimizing office space is the process of making sure your office space is as useful, efficient, and functional as possible. Office optimization is particularly important for hybrid work because each space is shared by multiple individuals with different needs, working styles, and time in the office. 

With a record high office vacancy rate, office space optimization becomes even more crucial. According to Moody’s Analytics, almost 20% of office spaces in major U.S. cities weren't leased as of the fourth quarter in 2023—the highest it’s been since at least 1979. Organizations have been reducing their real estate footprints to cut costs and adapt to hybrid work, but more can be done to ensure the modern office is keeping up with new ways of working. 

In its 2023-2024 Global Workplace & Occupancy Insights, CBRE interviewed 66 clients across almost 6,000 buildings that covered nearly 350 million square feet (32 million square meter) of office space to better understand how organizations can continue to optimize their office layout. Here’s what they found:

Hybrid Work Drives Real Estate Optimization

In the past three years, the increase in hybrid working has driven real estate portfolio optimization. With fewer employees going into the office at any one time, organizations had less need for massive office spaces. According to research from global utilization sensor provider XY Sense, 36% of workstations go unused on a typical work day and 29% are used for less than three hours per day. 

“Many organizations are using pre-COVID office space for a post-pandemic workforce. Until they repurpose or rightsize old offices to support new work styles, they’ll continue to struggle with low office utilization.” - Susan Wasmund, Global Occupancy Management Lead at CBRE

More organizations are increasing space-sharing (i.e. hot desking, office hoteling) and prioritizing real estate investment optimization, with 43% planning to decrease their real estate by more than 30% in the next three years. To reduce costs and meet sustainability goals, organizations are increasingly prioritizing their office utilization rates, which compares space demand and supply to determine if space is being used effectively. 

Many have turned to finding ways to use smaller office space more efficiently. Space-sharing, which can be in the form of hot desking or office hoteling, has increased by 30% globally since 2021. In the same time period, collaboration spaces have also increased by 44% globally. This shows that hybrid work is changing the way people use the office, and that in turn should guide how organizations optimize space.

Office Space Supply and Demand Imbalance Persists

Global average office utilization was 35% from 2022 to 2023. This is a 45% decrease from the pre-pandemic global average of 64%. That means even as pandemic-related restrictions were lifted and work life returned to a more normal cadence, people were still using the office less. The combination of hybrid work and underutilized office space has created an imbalance of office supply and demand. 

Most employees who choose to work in the office do so for connection and community, decreasing the demand for traditional workspaces designed for individual and focused work. In the report, 58% of employees go to the office for connection, while only 15% go for focus work. Knowing this, optimizing space may mean redesigning traditional office spaces to be more collaborative and less focused on individual workstations. 

Janet Pogue McLaurin, the Global Director of Workplace Research at Gensler, noted that while there is an increasing level of choice within the workspace, there often aren’t enough options for the variety of tasks that need to be done. This is based on Gensler’s survey of over 14,000 office workers across nine countries and ten industries. 

“When you stop and think about what people really need and the role of the office, it’s shifted. We asked about 16 different types of spaces beyond your individual desk and an enclosed conference room. And there were four categories of spaces that started to emerge.” - Janet Pogue McLaurin, Global Director of Workplace Research at Gensler 

Gensler’s research identified four categories of spaces as essential for office workers: spaces for creative group work, individual spaces, spaces to reflect and restore, and areas to refresh and recharge. Different employees have varying preferences and needs when it comes to their workspaces, and providing a range of options allows individuals to leverage their surroundings in the way that best suits their work style.

Read More: Top 5 Companies Setting Up Hybrid Meeting Rooms Right

Workplace Experience Will Be a Factor in Office Space Optimization

Office space optimization remains the top objective for corporate real estate (CRE) teams. Of those organizations planning to optimize their real estate investment, 75% plan to dispose of underutilized space and 82% plan to increase space-sharing. 

Space-sharing has enabled global office occupancy rates over 100%, meaning there are more people assigned to an office location than there are workspaces at that location. This is a good direction toward implementing more hot desking and office hoteling. However, organizations haven’t been able to coax their employees back to the office as much as they’d like. Global space utilization remains under 40%, which means less than 40% of the workspaces get used in real life. 

“Only one-third of workplaces have been redesigned since the onset of the pandemic. This is despite major shifts in how individuals value time and approach their work. Adaptable, employee-centric workspaces that encourage diverse experiences and leverage evolving work practices are likely to be a key factor in winning the 'war for talent'.” - Janet Pogue McLaurin, Global Director of Workplace Research at Gensler 

Organizations will have to focus on workplace experience more than occupancy data when optimizing space in the future. Doing so will make the hybrid workplace more efficient and effective.

That means CRE leaders need to prioritize new performance metrics in the scheme of creating a holistic workplace. While the office utilization rate is still an important metric to look at, workplace performance metrics like ‘employee sentiment’ and ‘attendance rate’ are starting to replace traditional occupancy metrics such as ‘square feet per person’ and ‘square feet per seat.’

Additionally, space optimization will rely more and more on cross-functional departments. CRE leaders will be tasked with making the overall workplace experience more effective in supporting the organization’s business and cultural goals. This will require collaboration from HR, IT, and Finance to track the workplace’s impact on employee performance, operational priorities, financial goals, and ESG objectives.

Read More: How To Improve Your Hybrid Workplace Experience With Skedda

Examining Office Attendance and Space-Use Patterns To Optimize Space

Today’s demand for office space is driven by a combination of business requirements, workplace policy, workplace experience, and employee behaviors. Optimizing space is no longer just about downsizing and cutting costs in the age of hybrid work—it’s also about designing efficient workspaces that make the office commute worth it. By examining office attendance and space-use patterns in addition to facilitating open conversations with employees, organizations can get a better feel of what their employees want and need to be most productive and engaged.

Leveraging space management software that provides utilization insights can help inform you in making smart decisions about how you manage your spaces. Create your free Skedda account to start optimizing your office space for hybrid work today.

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