90% of companies offer hybrid work, less space needed: CBRE

Last year 90% of companies offered some level of hybrid work, according to a new global survey published yesterday by CBRE. The working from home trend is leading companies to lease less space and redesign their offices to be more effective for employees.

Susan Wasmund, Global Leader of Occupancy Management, CBRE

“The demand for office space is no longer driven by the number of employees a company has,” said Susan Wasmund, global leader of occupancy management, CBRE. “Instead, it’s driven by a combination of office policies and employee behaviours, which is why corporate real estate leaders are so focused on understanding office attendance and how the space is being used.”

The broad adoption of hybrid work has led to portfolio reductions and enabled planning efficiencies, including a 22% decrease in the average square foot per person globally and a 28% increase in occupancy rates. Looking ahead, 43% of companies are planning to decrease their portfolio size by more than 30% in the next three years.

The survey found that while 45% of participants have policies requiring employees be in the office three or more days per week, less than 4% consistently implement consequences for not following policy.

Because of hybrid work, organisations are prioritising shared space over private workspace to make the office more effective.

Survey respondents have increased collaborative, so-called “we” space to 20% of their office square footage in 2023 from 14% in 2021. Such collaborative space can include conference and meeting rooms but also lounges with communal couches for trainings or other social events.

In turn, companies have downsized private, “me” space to 45% in 2023 from 56% in 2021. Private space often entails private offices and assigned workstations.

Companies are redesigning their office space to specific industry needs. For example, respondents from financial and professional services companies said 13% of their office space is dedicated to amenities – a 120% increase since 2021. Meanwhile, respondents from industrial and logistics increased collaboration space to 20% of their total office space, representing an increase of 121% from 2021.

Despite these planning improvements and hybrid workplace policies, office space utilisation rates, which measure the actual use of space, remain under 40%, a 45% decrease from the pre-pandemic global average of 64%. This suggests that office attendance has plateaued, exposing an imbalance of space supply and demand.

This situation “will not simply resolve itself without purposeful action such as well-communicated changes to hybrid policy, workplace experience improvements that attract more employees to the office or further reductions in portfolio size,” says CBRE.

In 2024 CBRE expects companies to continue increasing space sharing, which allows more people to be assigned to an office location. Companies are also likely to continue disposing of space that is not being used effectively.

The annual survey, conducted by CBRE, reflects workplace and occupancy insights from 66 CBRE clients that own or occupy almost 350 million sq ft (32.5 million sq m) of office space across around the world.