As a consultant, staying informed on trends is important to help build credibility and value to help clients navigate the ever-changing future landscape. Every morning I spend at least an hour reading up on the latest news and trends. This morning something new caught my eye. CBRE, a renown commercial real estate services and investment company, reported demand for office space had increased for the first time since the pandemic started. Is that an indicator that companies are returning to the office and putting their hybrid work plans in motion?
To better understand the role the physical workspace plays in a hybrid work plan, I reached out to
Matthew Dobry, senior vice president, CBRE, for his insights.
Responses have been edited for conciseness and clarity.
As employees return to the office, the reality vs. expectation around hybrid work and flexible work arrangements will come into focus. What does the future hold for the office?
MD: The traditional office now must compete with other places employees will want to work—including from home. The office must serve as a destination with access to colleagues and unique services unavailable in other places. For many offices, this means adapting how services, technology, and the space itself [can] support how we work, connect and socialize with our colleagues.
CBRE forecasts an ongoing shift to a hybrid workforce that works an average of 1.6 days a week remotely, up from 0.6 precrisis. A hybrid workplace will need to be a destination that attracts employees, and the companies that can successfully adopt hybrid work will have an advantage when adding and retaining talent.
So, companies are looking to develop more collaborative office spaces to help employees work together in person. What changes does that bring?
MD: Future office formats are likely to dedicate much more space for collaboration, including conference rooms and brainstorming areas for team projects. CBRE’s Workplace team predicts that many companies that previously provided densely packed traditional office space models will need to de-densify in the future to accommodate greater separation between work settings, more space for collaboration, and a greater amount of social and amenity space.
According to CBRE Occupancy Management, within the sizeable portfolio of office space that they manage for clients, roughly 53% of space is dedicated for individual work and less than 13% for collaborative space. CBRE sees the share dedicated to collaborative space at least doubling over time.
Meanwhile, employers are adding tech tools to keep their employees connected, whether at the office or remote. Some platforms allow employees to reserve meeting space, schedule their visits to the office, check room occupancies, line up their schedules with colleagues to arrange meetings, and update their health checks.
I’ve been asked to write work from home (WFH) and hybrid policies, but none of these address the physical office space. Are these workplace decisions being incorporated into the hybrid work model?
MD: Every employee wants to feel enabled and trusted to do their best work. Going forward, many employees will want some level of autonomy to balance work in and away from their primary office. According to CBRE, most large companies anticipate allowing their employees the flexibility to work remotely for a portion of their workweek. As employers look to optimize their network of offices to fit their evolving current and future needs, their employee’s work practices and preferences will factor into their real-estate strategies.
The pandemic also added more variables to companies’ site-selection processes and their considerations for where to hire talent. Companies are now focusing as much, if not more than ever, on considering a market’s broadband infrastructure and housing affordability, among other metrics, as they consider expansions and relocations.
I also read that office-using employment growth has led the rest of the broader economy for the past five months, supporting demand for space. Can you translate the meaning?
MD: That is correct. Office-using jobs increased by 118,000 in March and have averaged 114,300 in the prior three months. These encouraging figures, coupled with the easing of pandemic-related restrictions in many markets, are giving employers the confidence required to begin making decisions about space needs. With labor force participation near all-time lows, companies need to get creative to keep and recruit talent—especially as they reopen offices more fully as the pandemic ebbs.
CBRE Econometric Advisors forecasts that the lasting increase in remote work will result, over time, in nine percent less office use on a per-employee basis. However, as the economy expands, that impact will be significantly softened by increased hiring. So, while companies may need slightly less space on a per-employee basis, they’ll add more employees over the next few years who will need space. The net result likely will be closer to a wash in terms of square footage. Additionally, companies that opt to transform their office floorplans to fully “event-based” formats often will find that they need as much space, if not more, than in their previous format.
Some employees are looking forward to returning to the office. What are the critical changes in amenities employers and employees are looking for to encourage a return to the office?
MD: In this ‘next normal,’ organizations must create differentiated offices where employees want to work. Shifts to consumer-oriented approaches to the workplace are underway, where employers design their offices around the needs of their workforce.
More and more surveys find that the most compelling reasons to go back to the office for employees include collaborating in person, attending meetings, and experiencing serendipitous encounters with colleagues. These priorities have large implications for office design. Offices have traditionally been built around individual workstations. But a
hybrid workplace needs to facilitate in-person collaboration and in-office flexibility. Our clients are prioritizing capital to build more collaborative work zones and enhance video conferencing to support a hybrid workforce.
Demonstrating how far the lines of in-person and remote work have blurred, a recent CBRE Workplace survey found 70% of large company office users cited ‘enhanced videoconferencing’ as a strategic priority coming out of the pandemic. Notably, this number surpassed all other suggested categories of similar investment, including Smart Building Systems (43%), Touchless Technology (40%), Occupancy Sensors (40%), Employee Experience App (33%), and Air Quality Sensors (23%).
*Matthew Dobry is Senior Vice President with CBRE’s Advisory & Transaction Services group with two decades of commercial real estate experience. He maintains a robust client roster, including Fortune 500 firms, leading healthcare and higher education institutions, and numerous private, professional services firms. Matt is a graduate of DePaul University, Kellstadt Graduate School of Business with a Master of Business Administration, Real Estate Finance and Investment.
Frances is writing on behalf of the SCTC, a premier professional organization for independent consultants. SCTC consultant members are leaders in the industry, able to provide best of breed professional services in a wide array of technologies. Every consultant member commits annually to a strict Code of Ethics, ensuring they work for the client benefit only and do not receive financial compensation from vendors and service providers.
