After 18 months of workplace turbulence due to COVID-19, many organizations are now adopting a hybrid workplace model to give employees more flexibility about how and when they attend the office. Despite planned office occupancy decreasing, the physical office remains a critical element for employee and business success.
But with the cost of empty offices starting to bite, many workplace leaders are now considering downsizing and asking: how is it possible to minimize commercial real estate footprints without putting the day-to-day operations of the business at risk? The answer lies in capturing accurate, rich data from workplace occupancy sensors to inform space planning and de-risk office downsizing.
Impact of the hybrid workplace on real estate footprints
There’s no denying that the dearth of office workers being physically in the office has impacted how commercial real estate (CRE) managers and business decision-makers approach their workspaces. A significant number of companies have seen the benefits of remote work and are transitioning to a hybrid model. Consequently, that is having an effect on how much space corporates actually need.
From New York to London to Sydney and everywhere in between, a historic amount of vacant office space has been placed on the sublease market. With office occupancy rates vary wildly across the globe (depending on the current state of Delta outbreaks and health restrictions) a return to pre-pandemic normalcy looks improbable and it’s clear that businesses want to minimize their real estate footprint to reduce overheads while adapting to a more hybrid business model.
The risks of downsizing too soon
The problem with any major change is the timing.
Should you move now to get ahead of the competition, or is it wiser to take a wait-and-see approach – particularly considering that varying strains of coronavirus (and potential lockdowns) will likely be part of our lives for many more months, if not years?
Key decision-makers need to ask themselves the tough questions:
Should you let a ‘black swan’ event influence your longer-term real estate strategy? And if so, what financial impact will that have?
What happens if you sublease and then require more space in 12 months? Will it not only be an expensive lesson, but also a major disruption for your people?
What happens if the new hybrid work style doesn’t require as much space reduction as you predict? It’s still very early days, and the lack of data around hybrid work models can cause gaps in your decision-making.
The risk of moving too soon is equally as dangerous as waiting too long to make a change. That’s where technology can help.
Use occupancy sensors to measure before you act on downsizing
As many businesses are only now transitioning back to a ‘business-as-usual’ workflow, with staff slowly flowing back into the office on a full-time or hybrid basis, it’s the ideal time to analyze how your office space is being used. Armed with the right information – including foot traffic, desk usage and hoteling, area allocation, social distancing clashes and more – you can take a data-driven approach to inform downsizing plans. That means you can understand exactly how much space your workforce needs right now to support your in-office, hybrid and remote teams.
Occupancy sensors like XY Sense provide all this information and more in a single product. The real-time sensors provide up-to-the-second updates with information critical to how your workplace is functioning.
For example, XY Sense helps you to compare the utilization of desks across different floors, days or even down to team level. You can also analyze ‘supply versus demand’ of desks, meetings rooms and projects spaces, helping you understand the spaces that are the most in-demand and where it’s possible to repurpose or relinquish space without impacting productivity.
With all data fed through intuitive and easy-to-understand analytics dashboards, businesses and CRE managers can see the actual utilization of any area to make informed, space-planning decisions.
The time to act is now
The C-suite has already decided to act on the commercial effects of COVID-19. According to a recent study by KPMG, 68% of CEOs say they plan to downsize their office space. Importantly, technology remains a key support tool in their post-pandemic transformation, with 74% of business leaders saying they will prioritize investments in new technology and digitization. Occupancy sensors are just one piece of a technology-led strategy, but when it comes to eliminating the associated risks of downsizing, they are invaluable.
It’s certain that the major business districts around the world will change permanently as a result of coronavirus, but it’s equally certain that there won’t be a mass – and enduring – exodus of office space. On the contrary, businesses will need to find balance in a hybrid work environment while reaping the benefits of change.
As Paul Stapley, VP of Product Management at WSP, puts it:
“Companies could see this as an opportunity to downsize, to reduce operating costs and invest more in technology.”
XY Sense is a market leader in workplace sensors that can support a data-driven strategy for your office space. You can request a demo with our team or find out more about the value of workplace sensors at the XY Sense blog.