Get a 5-minute rundown on what’s happening in commercial real estate here. This latest edition of Workplace Bytes is full of information and links on data and trends in CRE, occupancy, and the return to the office movement.
Survey: Why Workers Want More In-Office Time
As companies continue to pursue the best ways to drive teamwork and productivity with their back-to-the-office programs, we’re learning more about how to make a return more appealing. A recent Gensler survey says the top reason why workers want to spend more time in the office is to focus on their work better.
Further, the survey reveals “workers at the most innovative companies desire to work at the office more than average — back to the 67% level we measured pre-pandemic.”
Not surprisingly, workers rate in-office time as advantageous for working with others, learning, and socializing.
Another interesting finding: hybrid workers are likely to want another day in the office per week or month versus their current RTO schedules.
Latest RTO Figures
The latest survey research from WFH suggests
The research also reports that among full-time workers with at least a 4-year college degree, more than 80% spend at least part of their time in the office:
As WFH research relies primarily on surveys versus scientific evidence like occupancy sensor analytics, it’s essential to recognize that self-reported data usually overestimate in-office time. But the directional insights here are significant — hybrid is clearly ascendant.
RTO by Market
As we’ve reported previously, office occupancy rates vary significantly by market, with some of the highest rates in the UK. Flexible office companies are leading the way in occupancy in Britain. According to CityAM,
A majority (86 percent) of the world’s top 30 flexible workspace providers have now seen occupancy rates in their central London offices surpass levels of 60 percent, a survey by Knight Frank shows. A further 88 percent of the top 30 flexible office companies – including WeWork, The Office Group, and IWG – said they are now planning to expand their office footprint, by adding new sites.
Reports this Washington Post article quoting Bloomberg data, office occupancy rates in major US cities continue to rise.
Australia is seeing high and growing occupancy rates, according to the Property Council of Australia. The organization reports major city CRE occupancy rates for November ranging from 57-80%. Occupancy on individual days per week varies considerably, indicating that many offices are returning with a hybrid model.
November 2022 Occupancy
- Perth 80%
- Adelaide 74%
- Brisbane 67%
- Sydney 59%
- Melbourne 57%
Source: Property Council of Australia
These figures likely overstate occupancy – self-reported survey data typically overestimate in-office time. Across our Australian footprint, our most recent research showed occupancy in the 25-35% range. But what’s perhaps most interesting is the overall trend. According to the PCA, occupancy rates in these cities jumped about 12% month-over-month.
The Right – And Wrong – Ways to Manage RTO
As we all know, employee reaction to RTO policies is mixed. While some workers embrace return, others are quite vocal about their distaste. Glassdoor Data Scientist Richard Johnson wrote that RTO terms were up significantly on the company workplace rating site, often in a negative light.
“…employees, who often turn to Glassdoor to shed light on the not-so-great happenings behind company walls, are not necessarily on board with executive desires to have things return to pre-pandemic business as usual. The tension between employees and employers around the topic of RTO seems to be what led to the uptick in mentions of the term. The tug-of-war between employees wanting to stay remote and employers wanting them back in the office resulted in the share of employee reviews discussing their company’s RTO policy doubling since 2021 (+122 percent).
According to the WFH surveys, the most likely consequence of staying at home on work-in-office days, according to workers, is nothing. This is very different from the assessment made by their managers, who claim that a threat of dismissal is the most common outcome.
That’s a signfiicant disparity, and a reminder that surveys are less precise than data like that from occupancy sensors. But whichever group is more accurate here, it’s apparent that focusing on negative outcomes alone is not an effective way to create workplace productivity and harmony.
A thought-provoking article in Entrepreneur reviews the “Four Horsemen ” issues that must be addressed for long-term success with RTO: resistance, attrition, quiet quitting, and diversity. While the first three receive a great deal of press and other attention, the fourth is an area the article suggests needs significant additional focus.
The final of the Four Horsemen relates to the serious loss of diversity associated with the mandated office return. A Future Forum survey found that 21% of all white knowledge workers wanted a return to full-time in-office work, but only 3% of all Black knowledge workers wanted the same. That’s a huge difference. Another Future Forum survey found that 38% of Black men wanted a fully flexible schedule, but only 26% of white men felt the same.
The Society for Human Resource Management found that half of all Black office workers wanted to work from home permanently, while only 39% of white workers did so. Why do we see this difference? It’s because Black professionals still suffer from discrimination and microaggressions in the office, and are less vulnerable to harassment in remote work. Similar findings apply to other underrepresented groups.
More in-depth analysis of the Future Forum survey is available here.
Finally, this interview with ZoomInfo’s CHRO discusses how they leveraged listening sessions and empowered teams to set their in-office days as effective ways to help ease the transition for skeptical employees. Worth a read.
Green Buildings Ascendant
Several reports last month showed that companies’ commitment to sustainability is driving a boom in “green” building occupancy rates. According to this piece from JLL, “Up to one-third of corporate real estate leaders in Asia Pacific are planning to exit carbon-inefficient buildings by 2025 as sustainability becomes an increasingly decisive factor in leasing criteria, according to JLL’s research on green premiums.”
JLL also reported that Australian and Asian commercial real estate markets lead in sustainability, but North America saw the largest improvement in 2022. From the piece:
“As more real estate owners report sustainability performance, one region is outshining the rest of the world in terms of investor action on environmental, social and governance (ESG) issues. Oceania, led by Australia in size and population, has achieved an average score across its real estate companies of 81 – compared to the global average of 74 – in the annual Global Real Estate Sustainability Benchmark results. Oceania has held the top position since the initiative started in 2009. … Asia follows closely with an average score of 78 – up three points from last year – while Europe is in third spot with an average score of 73 – up by two points from last year. … And the Americas recorded its largest leap in participation, with 30% year-on-year growth – a result put down to it being a larger market with inherently more growth opportunities.
At XY Sense, we saw a marked uptick in interest in, and commitment to, green workplaces throughout 2022. One of the top reasons why companies choose our solutions over those of other companies is because they provide strong “green” advantages. These include the need for fewer sensors because of more extensive sensor coverage (~1000 SF versus ~500 SF), more efficient installation, reduced wiring needs via the SenseLink™ installation model, and the elimination of e-waste versus battery-operated offerings.
XY Sense News
Exciting Product Enhancements
We’re constantly enhancing the XY Sense platform to improve accuracy and make it even easier for clients to derive maximum value from the solution. Here are two of our latest upgrades:
- Area sensor accuracy upgrade: The latest version of XY Sense’s motion detection algorithm has been released. This firmware update will improve the accuracy of XY Sense data collection delivering more accurate reporting for workplace teams in 2023. Our new motion detection feature reduces inanimate object detections that are incorrectly detected as people (false positives). Read more about these changes.
- New localized cost metrics: Now teams can easily track and compare costs associated with underutilized spaces in local currencies, including; GBP, EUR, AUD, NZD and USD (default). Read more about these changes.
XY Sense’s Exclusive Senselink Installation Approach Saves a Client $12M
One big advantage for XY Sense is our ability to dramatically lower installation costs. Read about our exclusive Senselink installation methodology and how it recently saved a large international client $12M.
More Award News
Our win of the CBRE Innovation of the Year Award continues to garner strong industry interest. The company’s winning entry emphasized the five key XY Sense differentiators that have made it the vendor of choice for many leading enterprise companies:
- The largest sensor coverage: each sensor observes 1,000 sq. ft or space for ~20 desks. Competitor sensors track less than half of that area.
- More accurate, real-time sensor readings: superior location precision to within one foot and location data refreshed every 2 seconds
- Lower cost installation: sensors daisy-chained together to use up to 90% less cabling, for lower installation costs than standard POE.
- The lowest total cost of ownership: 2-3x more affordable than other leading sensor solutions
- Privacy and security by design: no images stored or transmitted, only X,Y location coordinates
- Unsurpassed sustainability: fewer sensors needed, no batteries, less e-waste
Read CBRE’s release about the award.