Here's How Companies Rework Smaller Offices To Adapt to Workplace Shifts
The days of a nondescript cubicle and other pre-pandemic workplace features appear to be further relegated to the office market's past as companies keep redesigning spaces to be more efficient in the wake of the pandemic.
As the COVID-19 outbreak's fourth anniversary approaches, hybrid work persists as companies continue to allow staff to spend some part of the week working remotely. About 90% of companies offered a type of hybrid work arrangement last year, according to a survey by brokerage CBRE of more than 65 clients that own or occupy about 350 million square feet of office space around the world.
Office tenants used to calculate how much space they needed based on headcount. However, hybrid work has upended the standard equation, and the employees who do show up for in-person work are more likely to share spaces, according to the CBRE findings. Companies have therefore prioritized such features as lounges with communal seating, open-air meeting rooms, outdoor gathering spots or cafe-like settings.
The amount of collaborative space in a standard office climbed to 20% last year, up from the 14% reported in 2021, according to the CBRE report. As a result, companies have shrunk the amount of private spaces they have, such as offices or assigned workstations, to about 45% of their total office footprints, down from the 56% reported in 2021.
"Most organizations are a blend of both," Jenny West, Cresa's vice president of workplace and project management, said of communal and private workspaces. "Gone are the days of determining office space solely based on headcount or outdated utilization patterns. Rather than assigning a fixed desk to each employee, companies are providing office space to support various activities, experiences and mobility norms than ever before."
An employee that doesn't come into the office each day might not need their own dedicated workspace, HOK's Sargent added, and the type of space companies provide is being tailored for the type of work employees are doing when they're actually there.
"We're starting to get more in depth about the purpose behind why people are coming to the office, and we're designing for that," she said. "If you're coming in to collaborate, innovate or mentor, it's more about the shared spaces. But you still have the people doing the heads-down, concentrative work that will need a more focused environment. It has to be a balance."
Take online retailer Amazon's recently opened office in a former Lord & Taylor department store along Manhattan's Fifth Avenue. The tech giant invested more than $1 billion to acquire and renovate the historic property into an office hub with space for about 2,000 employees. Amazon requires that most corporate employees work from an office at least three days a week, and the company includes a mix of shared and collaborative spaces in the 13-story building.
The office includes a landscaped rooftop terrace with rocking chairs and a dog park, an employee cafe for morning coffee runs and impromptu meetings, several lounges and huddle rooms, and some phone booths and private office spaces for focused work.
Other companies are adopting a similar amenity-focused approach as some struggle in their attempts to get employees to return to more in-person work. Overall office attendance over the past year has remained stuck at about 50% of pre-pandemic levels across most major metropolitan areas, according to card-swipe data from Kastle Systems. That's even with employers such as the United Postal Service, General Motors, Zoom and Kroger implementing stricter mandates.
Those harsher mandates have landed alongside new workplace designs that try to make the office a place worthy of employee commutes and provide the flexibility they may not have with the space available to them at their homes.
Financial and professional services companies, for example, set aside 120% more of their office real estate space to room for amenities such as high-end fitness centers or coffee bars, according to the CBRE report.
The mentality of providing an office experience for workers rather than simply space for them to do their jobs is unlikely to fade anytime soon, CBRE predicts. More companies are expected to further shrink their office footprints with nearly 45% of those surveyed planning to decrease their portfolio by about one-third over the next three years, according to the study.
As trophy office buildings sit empty, Cresa's West said companies are exploring ways to save expenses and make their space more efficient. They're adding more diverse amenities, adopting flexible workstation arrangements such as hot desking or hoteling, and focusing their office design decisions more on employee wellness.
"Hybrid and remote work aside, we are seeing organizations recognize the need for more choices in work environments through a heightened commitment to employee wellbeing," West said. Office features such as quiet libraries, nap or meditation rooms, and other spaces can support workers' mental health, West added.