From Downsizing to Optimizing: Navigating Space Reductions with Workplace Tech

Over the last three years, hybrid work has led to organizations reducing their office space. The average square footage per person fell 22% in 2023. Since January 2020, 62% of participants in CBRE’s survey said they reduced their office space, with an additional 63% expecting to make further reductions by 2026.

The shift to hybrid work has influenced companies to reevaluate and reduce their office space needs. Now that there’s no need for the office to accommodate its entire workforce every day, organizations see less need to hold onto large amounts of office space. Reducing office footprint has become one strategy to control costs and meet new sustainability goals.

However, office space reductions bring about challenges that workplace and facilities leaders need to address, including solving the familiar “too many people, not enough desks” scenario and improving overall space utilization. Organizations can leverage workplace management software to navigate office space changes.

Are Companies Reducing Office Space?

58% of large companies say they are likely to reduce their footprint, according to a CBRE survey of 225 corporate executives with office portfolios across the U.S., Canada, and Latin America.

The plan to reduce office space isn’t just in the horizons of companies. The federal government also plans to shed millions of square feet of office space amidst hybrid work shifts. According to an Office of Management and Budget report, federal agencies are looking to shed a little over 24 million square feet of “underutilized” owned and leased space.

Many organizations have turned toward hoteling and hot desking solutions, where workstations are flexible rather than fixed. Without having permanent spaces assigned to everyone in the office—and never really having a day where everyone is in the office at the same time—there’s no more need for companies to hold on to so much office space real estate. Thus, organizations are reducing office footprints to cut overhead costs (e.g., rent, utilities, maintenance) and limiting physical space usage to focus on sustainability and reducing their carbon footprint. 

“Our company is ESG compliant, and we try to be as green as possible, so if just one person decides to come in and one of us has to be there for that one booking…  that is not efficient environmentally or otherwise.” - Vita Minas, Vendor Development Manager at Autovista Group

See how Autovista Group uses Skedda to manage their workplace carbon footprint.

How Are Office Spaces Changing?

Employees overwhelmingly prefer hybrid working arrangements, leading to flexible schedules where employees are only in the office sometimes. That has changed the purpose of the office and office space designs.

More collaborative spaces

The office's role has shifted from where employees go every day to do all their work to one where teams collaborate intentionally. That means more collaboration spaces and fewer individual workstations. Even though the average square footage allocated per person has fallen, collaborative spaces have increased by 44% globally since 2021 (CBRE). 

Balance of hot and permanent desks

Flexible working has increased seat sharing, such as hot desking, office hoteling, and flexible collaboration spaces. In 2024, only 40% of companies report having an employee-to-desk ratio of 1:1 or less, meaning every employee is allocated a desk. Most organizations have allocated two employees per desk, with some even expanding to three employees per desk (CBRE).

More technology implementation

Organizations are prioritizing technology such as video conference tools, room and space booking software, and smart building systems and sensors to connect hybrid workforces better and make space planning more predictable (CBRE). From smart technologies and Internet of Things (IoT) to Artificial Intelligence (AI) and predictive analytics, facilities leaders increasingly rely on tech tools to manage spaces more effectively. New technologies will power the future of the workplace.

“Where we're headed next is so much more into predictive analysis, into machine learning in this space, really leveraging our operations and maintenance space into a way that we can use things like digital twins to help really understand, in a very predictive and proactive way, how we can maximize the effectiveness of the spaces that we oversee and lead.” - Lynn Baez, Enterprise Vice President of Facilities and Workplace at McKesson

Read more: How AI Is Revolutionizing the Modern Workplace

High-quality buildings will be more in demand

CBRE notes that organizations continue to seek higher-quality offices. 59% of all respondents---especially large, well-capitalized companies---are executing or exploring options to relocate to better-quality office space. Approximately 57% of surveyed companies say downsizing while upgrading their offices is a driving factor for relocation; 57% also say they seek improved amenities and services for their employees.

The Challenges of Managing Reduced Office Space

In hybrid work settings, organizations face a common issue where large office spaces that were used to accommodate full-time in office work become underutilized. As a result, organizations are shedding vast amounts of office real estate, leading to unique challenges.

Finding the right balance of space types

Finding the right balance can be tricky, as it’s challenging to anticipate the fluctuating number of employees who will be in the office on any given day. Additionally, finding the right balance of space types when there is less real estate to work with can pose another challenge. When working to optimize their space, 32% of organizations reported that their greatest challenge is creating the right kinds of workspaces by balancing individual and collaborative spaces, according to EY’s third annual Future Workplace Index.

“There will never be a fixed or predictable answer to a very flexible and dynamic problem, so we must embrace the chaos and learn from it.”- Phil Kirschner, Workplace Strategy Leader

Watch: Workplace Strategy Leader Phil Kirschner on the Future of Work

Streamlining workspace reservations

Fluctuating work patterns and use cases can impede workplace efficiency by creating more variability in the types of workspaces needed and how often they're used. When organizations reduce their office space, there's even more of a limit on where and when people can find a space that works for them. It can be cumbersome and inefficient to manually assign a limited number of shared desks, meeting rooms, and collaborative spaces to people who need them at the right time.

‍Change management and employee satisfaction

Beyond technology, one key challenge organizations face when reducing office space is managing employee expectations and ensuring that changes don’t negatively affect engagement. Organizations should communicate consistently and involve employees in the changes, ensuring that the transition to a hybrid space is smooth. One method may be to survey employees on what space types they find most useful for their productivity to inform space design decisions in the future.

Employee engagement and productivity

A good workplace is optimized to effectively support all five work modes: working alone, working with others in person, working with others virtually, learning, and socializing. Finding the right balance of space to incorporate all five in a smaller office can be challenging. A poorly managed office space can negatively impact employee productivity and collaboration. Gensler research found that building quality has a direct relationship to workplace quality: high-performing workplaces are twice as likely to be in a high-quality office building.

See how EPIT manages a workspace shared by various nonprofits and small businesses.

The Role of Workplace Management Software in Space Optimization

Organizations can use workplace management systems to reconfigure office layouts based on usage patterns. For example, organizations might convert underutilized individual workstations to informal collaboration spaces if data shows that most people aren’t using the individual workstations.

Workplace management software provides data on space utilization, showing which spaces are popular and which aren’t, and showing high demand times versus low demand times, enabling informed decisions. For example, award-winning animation studio Brown Bag Films identified opportunities to reduce their office size and real estate expenses after gaining insights into how space is being used through Skedda.

Workplace management platforms allow for dynamic, real-time booking of desks, meeting rooms, resources and assets, and really any shared resources among your workers. For The National Robotarium, booking a “space” can mean various things; in addition to desks and meeting rooms, spaces include specialty printers, labs, robots, and even a tour booking.

“Be creative in terms of what you define as a ‘space.’ Don’t restrict yourself to thinking of hot desks or meeting rooms. Think of any space or resource that might be shared.” - Steve Maclaren, Chief Operating Officer at The National Robotarium

Read more: What is a Space? 10 Creative Ways to Use and Book Space in a Hybrid World

A workplace management system also improves employee productivity, collaboration, and comfort. Capabilities like wayfinding, reservation systems, and mobile access improve the in-office experience for hybrid employees by providing comfort, peace of mind, and accessibility:

• Wayfinding through the interactive map makes it easier to see who’s in the office and where they’re sitting. Additionally, newer employees can get a sense of what the office looks like even before setting foot in it, which helps them better navigate the office in the first couple of weeks and feel more comfortable going to the office. 
• Reservation systems bring peace of mind as workers can book needed workspaces in advance, knowing they will have the space they need to work productively when they’re in the office.
• Mobile app lets workers book on the go, streamlining the booking experience. Employees can quickly book a space without having to pull out their laptops.

Space management technology ensures that employees have the resources they need to get their best work done, reducing friction and feelings of frustration. In an effectively-managed office, workers are able to easily find and reserve the resources they need to support the kind of work they are doing at the moment.

Learn more: The Definitive Guide to Space Management

Workplace Management Software for Space Efficiency

A workplace management system helps streamline space management in the face of changes, optimize available space use, and increase efficiencies amidst the many moving pieces of ensuring a workplace is running smoothly. Key features of workplace management software for space efficiency include:

• Space utilization metrics: A workplace management system can track which areas are used more frequently, providing valuable insights into where facilities leaders should allocate more energy and resources.
• Hot desking and hoteling: Hot desking and desk hoteling reduce the need for more space and ensure work flexibility, which employees highly value nowadays when they work in the office. A space management system streamlines reservations for these spaces and reduces the need for manual assignments.
• Meeting room management: A workplace management system manages meeting room usage efficiently. Organizations can set when meeting rooms can be booked, the total amount of time they can be booked, who can book them based on tags, and facilitate last minute cancellations to free up meeting rooms for others to use.
• Two-way calendar sync: Two way sync with Microsoft and Google allows employees to book meeting rooms right in their calendars, speeding up the process of getting a much-needed space. Employees can see who is attending and any changes/updates directly in their calendars.
• Visitor management: A workplace management system simplifies scheduling for visitors and makes the whole process of welcoming visitors more pleasant. By allowing self check-ins and immediate host notifications, visitors can easily book an appointment and be in their meetings without wasting time.
• Integration with IoT sensors: A workplace management system can integrate with IoT sensors to track real-time occupancy data, lighting, and energy use. Organizations can automatically close off underutilized areas based on real-time occupancy data, helping to reduce cleaning or maintenance costs. See Skedda’s product roadmap for continued innovations, including occupancy tracking and QR code check-in.

Read more: 6 Things to Look for in Space Management Software

Managing reduced office space isn’t just about reducing costs in the short term. It should be a long-term strategic plan that aligns with the organization’s goals, including growth, employee satisfaction, and sustainability. To improve the current state and make better-informed decisions, organizations should look at data provided in workplace management platforms for valuable insights, including ways to optimize office space, reduce energy use, and ensure a great workplace experience.

What Will Be the Future of Office Spaces?

The impact of office space reductions on organizations include the need for a variety of flexible spaces, demand for higher-quality office buildings, and integration of new technologies. Organizations should adopt new tech tools, including workplace management systems, to optimize space usage, reduce costs, and improve employee satisfaction in the modern workplace. AI may further enhance workplace management software, predicting space needs and automating configurations.

With new working patterns and flexible work arrangements, organizations may shift toward flexible or smaller satellite offices. Workplace management systems can help manage these distributed spaces. For example, Autovista uses Skedda to manage their "Hangouts," which are spaces to gather for quick collaborations.

If you’re ready to start managing your workspaces more effectively, create your free Skedda account today.