Hybrid working has changed how companies think about office space. As more employees split their time between home and the office, businesses are rethinking the need for large physical offices. But will this trend lead to significant downsizing?
Our recent survey, conducted across the UK, US, Singapore, India, New Zealand, and Hong Kong, interviewed 1,250 office workers and facilities managers to explore changing office habits and attitudes. Surprisingly, we discovered an extreme preference among employees for personal and hybrid-friendly spaces, a shift strongly reinforced by the Covid pandemic.
Around half of facilities managers expect their companies to reduce office space within the next three years. Their main motivations include creating open-plan environments that encourage collaboration and meeting sustainability targets. But how exactly will this affect day-to-day operations?
The shift towards hybrid working
Hybrid working was once an exception but has quickly become the norm, accelerated by the Covid pandemic. Employees increasingly prefer the flexibility of splitting time between home and the office. Our research highlights that 47% of office workers prefer a hybrid working schedule, significantly higher than the 41% who prefer working full-time in the office.
This change is driving businesses to reconsider their real estate. With fewer people in the office daily, traditional office layouts now feel outdated. Companies see an opportunity to optimise their space to match current needs rather than historical occupancy levels. Could downsizing become the new normal?
Why are companies downsizing?
Facilities managers identify two main reasons for downsizing:
- Encouraging collaboration: Hybrid-friendly office designs prioritise collaborative spaces over individual desks. Open-plan layouts, interactive areas, and spaces that foster creativity are becoming essential.
- Sustainability goals: Downsizing aligns closely with sustainability objectives, reducing carbon footprints, lowering energy consumption, and cutting operational costs. Sustainability is already a high priority for 59% of businesses surveyed, reinforcing the drive toward smaller, greener spaces.
Practical implications: A Primer
Downsizing office space isn’t just a financial decision; it significantly impacts company culture and employee wellbeing. Businesses planning to reduce their office footprint must carefully consider the balance between remote and in-office work.
Our research highlights a clear gap between managers’ and employees’ perceptions of office wellbeing, with 75% of managers satisfied compared to just 67% of employees. Reducing office space without addressing employee concerns could widen this gap. Businesses should focus on spaces that support health, productivity, and creativity.
And the biggest challenges…
While downsizing offers clear benefits, it also presents challenges. One key issue is managing physical assets currently in storage. Our survey found 64% of companies store desk equipment, and 59% store small office equipment. Companies downsizing must effectively manage or recycle these assets to avoid unnecessary costs.
Employee morale is another concern. Downsizing office space can create uncertainty and anxiety among staff, who may worry about workspace or job stability. Clear communication about reasons and expected benefits can help ease these concerns.
Are there any success stories to point to?
Many companies have successfully downsized their office space. Global tech giants like Meta and Microsoft have adjusted their office footprints significantly since adopting hybrid work models. Meta, for instance, actively reduced its leased office spaces to match fewer daily in-office workers, resulting in considerable cost savings.
To keep it simple, always bear these five considerations in mind:
- Assess your current and projected office usage realistically.
- Engage employees early in the decision-making process.
- Clearly communicate your reasons for downsizing, emphasizing benefits such as improved collaboration, flexibility, and sustainability.
- Develop clear plans for managing office equipment, either by recycling, selling, or donating to avoid waste.
The shift towards hybrid working will continue. Don’t forget communication if you’re planning this, you’ll lose employee trust if you don’t. More excitingly, view it as an opportunity, a blank canvas to paint something new.
On the above note, explore our previous articles about our survey findings:
For deeper insights into the future of office environments and what your employees are thinking, download the survey:
