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Answering the Billion-Dollar Question: Why Do I Need an Office?

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As businesses across the country start to have more clarity on the timeline for returning to work, they are able to turn their attention to different questions. How much office space do we still need? How will their workforce normalize the use of the office in the seasons to come? The hybrid work model that many companies are adopting has already had a major impact on the office market. The sublease market across the country is up 50 percent, to almost 50 million square feet, according to JLL. Markets like New York City have been even harder hit: in Midtown Manhattan, often thought of as the most competitive office market in the world, subleases are up a whopping 80 percent and unleased inventory is at an all-time high.

Many companies already know that fewer of their employees will be coming into the office every day. Plus, what those workers will do, or want to do,  with their time while in the office is yet to be determined. This has left a question mark hanging over decisions around signing new long-term leases. While reducing space can save money, there is emerging concern about the decreased productivity of the workforce that comes with working exclusively in isolation. Decreased engagement, lack of collaboration and knowledge share, and higher turnover could have a significant impact on an organization’s performance and the outcome could deliver far greater negative financial implications to the bottom line. Helping companies understand what the right amount and mix of space is for their unique workforce will be one of the most important services commercial property firms will need to provide—both for their tenants and their survival.

There is no shortage of opinions when it comes to what the future of work will look like. But, as with most complicated questions, there is no one answer. To use the now pejorative cliche: every company is a snowflake. Depending on the industry, organizational structure, type of work, and company culture, the office can mean a different thing to every organization. Adding difficulty to this already complicated equation is the fact that every workforce is establishing a new relationship with their office. Collectively and individually, employees will want to engage with space differently than when the pandemic started over a year ago. The good news is, the smart office will tell you something about your future office needs. To understand our new relationship with our offices, enterprises around the world will need data—the kind that only an intelligent workplace can provide.

As companies look to quantify the value of their office, they need to be aware of the nuances that exist between teams. Different jobs might want different things from a physical workplace. Some teams, like sales, might want more flex space to meet with clients and have large meetings, or just an area to land and get some focused work done in the middle of the day. Others, like developers or designers, might need the ability to collaborate and “whiteboard” together to help them with complicated tasks. “To better understand space use, our clients have the ability to customize the data by segmenting their organization into groups, or other characteristics, to compare and contrast parts of the company and glean an understanding of the whole,” said Allison Ballard, Vice President & Executive Director at 4SITE by CORT. Her organization uses sensors to collect constant motion event data within a space. The data can be rolled up to a portfolio level or down to a desk level, and every delineation in between.

Understanding a workforce’s relationship with the post-pandemic office is a bit like shooting at a moving target. We are all entering a new world. Our attitudes towards being in public spaces are evolving as the vaccination numbers grow. Finding when and where we reach equilibrium requires analyzing change over time. This means that any sensors that need to be in place to gather data about office usage need to be in place as soon as possible, not when it comes time to make decisions. The longer the data is collected and the better it is segmented, the more can be learned about how every organization uses its office space. 

Every day, occupiers are facing impending lease decisions. As more empirical evidence is brought into the conversation about how space is currently used, decisions about the future requirement of space for both occupiers and landlords become very clear. “Data helps justify the modification of space and limits financial exposure to space that you don’t need or doesn’t work for your people”, said Ballard. 

With so many unanswered questions around the return to the office, companies need as much help as they can get. The decision can have a significant, lasting impact on expenses or output and therefore should not be taken lightly. So, now is the time for companies to listen to their employees and analyze their behavior to understand how the office fits into their unique organization. There is no one “future of the office,” there are as many different future offices as there are companies to work in them.

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5 Findings From New Study About the Value of the Office
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