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Workplace Utilization Index: Predictions for 2024

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Welcome to the 2024 Predictions edition of The XY Sense Workplace Utilization Index (WUI). 

Each quarter, the XY Sense Workplace Utilization Index summarizes anonymous space utilization data from XY Sense’s vast global network of enterprise workplace sensors that capture 100 billion+ data points across 34,000+ workspaces annually. We publish this data to help workplace leaders understand global trends so they can be better informed and formulate strategies for their own companies. 

As we enter a new calendar year, we’re putting the data for Q4 and all of 2023 into context, summarizing the key findings, and providing a series of predictions on what’s ahead for workplace leaders in 2024. 

So, what’s the state of the workplace, and what’s ahead?

Read on to find out or download the PDF guide.

Global workplace utilization trends

In Q4 2023, the average global workplace utilization was 26%, relatively unchanged compared to Q3. Utilization was highest in November and October and dropped in December because of the Christmas and New Year’s holidays.

Despite widely reported corporate crackdowns on workers who don’t come to work, global workplace utilization has been fairly stable since the second quarter, reflecting a “new workplace normal.” This utilization level is about half what it was typically pre-pandemic. 

Average workplace utilization by region

Utilization was highest in the UK, where offices were just over half utilized. In Asia/Pacific, utilization was at 27%. These rates are similar to those recorded in Q2 and Q3 of this year.

US utilization continues to lag the rest of the world. US offices were just 19% utilized in Q4. Many analysts have sought to explain the reasons for this lag, with the most common causes believed to be that the US was already moving toward hybrid work before the pandemic, that Americans tend to bristle more over mandates, that US commutes tend to be the longest, and that US households are larger, affording more space for home offices. 

In specified regions, office utilization peaked in November before dropping off again in December (potentially due to holidays).

Desk and meeting space utilization

Across all regions, utilization rates of collaboration spaces were consistently higher than that of workpoints (aka desks). 

Desk utilization was 25%, 6 points lower than combined collaboration space utilization, which was 31%. Desks were also used for fewer hours on average than meeting spaces, 2.2 versus 2.6 hours.

The figures indicate that most offices still have far more individual workstations than are needed to support current day-to-day attendance levels. When we analyzed how many hours per day desks were in use, we found that 28% of decks are never used, and 51% are occupied for less than one hour per day. Just 12% are used for more than 5 hours per day. 

While meeting space figures may also appear low (at 31% average utilization), that is misleading. It’s important to note that hybrid work schedules have created uneven demand for those resources throughout the week. Most companies now operate under hybrid work rules, where employees split their time between home and work. EY’s Future Workplace Index shows that about 60% of companies operate under hybrid work rules, and research conducted by Build Remote shows that 75% of the Fortune 100 now operate on a hybrid work schedule. On midweek days, when workers tend to concentrate their in-office time, many companies report a shortage of meeting spaces. Past analysis of utilization data has shown that office utilization is heaviest midweek and lightest on Friday. Because of these uneven utilization patterns, we advise clients to run reporting on midweek days to understand peak usage levels.

Most popular space types

When we dig further into which spaces are the most popular to work from in today’s offices, we see that the demand for enclosed meeting spaces like conference rooms is highest, while utilization of open collaboration areas like breakout and project spaces is lowest. Average hours per day of usage follow the same pattern. This is an important insight as companies work to define ways to mitigate meeting space shortages on midweek in-office days — clearly, the demand for privacy, focus, and ability to utilize videoconferencing technology in enclosed spaces is far higher than connecting with colleagues in open collaboration areas.

Predictions for 2024

Trend lines within the Workplace Utilization Index have remained consistent since mid-2023, showing that the return-to-office is over. Throughout this period, many companies have vowed to “get tough” on reinforcing their work rules, with some announcing their intention to restore workplace utilization to pre-pandemic levels. But despite all these threats and, in some cases, drastic actions for certain companies, economy-wide office utilization hasn’t budged. Whether the C-suite or city councils like it or not, the time has come to grapple with a changed workplace reality. 

How will the market respond to the “new normal”?

At XY Sense, we anticipate eight critical changes in the months ahead. 

1. Senior executives will quit their denial

So much energy has been wasted in the last twelve months as many senior executives tried to force a return to pre-pandemic work rules and behaviors through sheer will. An Envoy survey conducted earlier this year showed that 80% of execs say they should have handled RTO differently. They failed, they say, because they didn’t have accurate workplace data and instead “went with their gut.” After more than a year of this, many execs are coming to the realization that the definition of insanity is doing the same thing and expecting different results. Across the world, we see that executives are zeroing in on the ‘why’ behind low office attendance and embarking on new, data-driven strategies to enhance teamwork and productivity in their organizations. 

2. More carrot, less stick to drive workplace attendance

Demanding workers return to the office hasn’t worked. While 80% of companies plan to track attendance in 2024, most leaders say they will instead try to change behavior with incentives. The most common planned incentives will be happy hours (52%), catered meals (46%), upgraded office space (41%), raises (40%), and childcare benefits. 

The potential ‘sticky’ outlier? Workers who have relocated too far away from a specific office or HQ to attend the office for a few days a week. Hybrid is the new normal, not remote. In 2024, the deadlines some Fortune 100 companies (such as Amazon) have set for employees to move back to hub cities will expire. 

3. More firms will ditch badge swipes for workplace measurement

Many companies still use badge swipes to monitor workplace attendance and inform planning. However, there is growing recognition that badge data is a poor proxy for workplace and resource utilization measurement. Coffee badging artificially inflated figures and swipes tell workplace teams nothing about desk occupancy, meeting utilization, and other resource insights.

As workplace teams look to adapt their office design and leasing strategies for a hybrid world, they’ll be seeking insights beyond the swipe gates at the front door and implementing 100% privacy-preserving workplace sensor solutions that have the added benefit of supporting smart building strategies.  

4. Workplace utilization will rise s-l-o-w-l-y and modestly throughout the year

While some press reports reinforce the meme that workers want to keep or increase their current work-from-home time, research says the opposite. While a hard core of WFH fans would love a 100% remote role, workers in most countries think they should spend more time in the office for socializing/companionship, collaboration, relationship-building, training, and career advancement. Challenges like commuting costs and childcare hold things back. As companies apply more incentives, expect a modest increase in workplace utilization in many markets worldwide. 

5. The shrinking office

With worldwide workplace utilization running under 30% and 74% using or planning to use hybrid work policies in 2024, space reduction will be a key change for workplace leaders in most companies. This process has already begun; according to CBRE, 62% of companies have reduced their office space since 2020. They also say the average square footage per person fell by 22% in 2023. Many workplace leaders will be tasked with reducing office footprints as leases expire. But there is growing recognition that data must inform any downsizing initiative. Wholesale cuts that aren’t based on workplace data often do more damage than wasted space. Hybrid drives dramatic changes in resource demand throughout the week, encouraging teams to spend more in-office time in meetings and group work. 

6. 1:1 desk ratios will join the endangered species list

A desk for every person drives extraordinary space wastage. 1/3 of all desks never used, and half used less than one hour per day. Smart workplace leaders will leverage workplace utilization data to adjust ratios and reduce space or allocate more room for collaboration. Already, companies are adopting new workplace design models that shift the emphasis from “me space” to “our space.” To better manage remaining workpoints, more companies will move to flexible seating models like hot-desking and floor balancing.

7. Demand for flexible space will explode

With occupancy levels uneven on weekdays, many companies want ways to have on-demand access to seating and meeting areas on high-demand days. Many building owners are considering redefining a portion of their buildings to shared, “on-demand” space and resources for tenants. Companies are also reimagining their permanent workspaces to incorporate more modularity and changeability as needs evolve. New workplace designs, adaptable resources and walls, and more adjustable equipment are all expected to grow in 2024. 

8. Many companies will upgrade their locations

Building owners have had a rough couple of years, but there’s been one bright spot. In many markets, demand for premium buildings and spaces has heated up. Expect even more companies to move to smaller, tonier locations with state-of-the-art designs and tech in 2024. 

All the forces discussed above will help restore workplace leaders to their primary role: creators of great environments that people love and make them more productive. In 2023, many companies focused on reacting to empty desks and offices. We believe that 2024 is the year that workplace leaders will stop being used as cops and be able to get back to building outstanding workplaces. Leaders will again be able to focus on delivering great environments for the new way of working.

That data that will empower workplace leaders in 2024

Data is the new currency of workplace leadership and decision-making. Getting accurate information about how and when your team is utilizing space and resources is essential.

Here’s how office occupancy sensor data can empower better decisions for the key challenges facing workplace leaders in 2024:

Smart Downsizing: To make the right decisions on reducing space, the most valuable information will come from getting accurate insights on specific resource utilization. By understanding the utilization of desks, meeting spaces, and other resources, workplace leaders can make informed decisions on how to cut space without hurting productivity and employee satisfaction. 

Increasing Collaboration: Many offices struggle to accommodate all the group meetings teams need on in-office days. Resource utilization data for collaboration areas can help you understand the size and scope of gaps in your organization. Data on utilization by space type (large conference rooms, small conference rooms, phone booths, open meeting spaces) can help real estate teams add the right amount and types of space to satisfy teams. Real-time utilization data can be ported into room and desk booking tools to end ghost bookings and help alleviate perceived shortages.

Lease Renegotiations: Whether or not their leases are up, many companies are trying to renegotiate lease terms to rightsize costs. Data on overall utilization, utilization by floor and area, and individual resources can arm a real estate team with information to help demonstrate why 

ESG Targets: With so much workspace unused for some or all of the workweek, changing how and where workers spend their time can drive enormous savings in costs and carbon emissions. By combining overall utilization data with occupancy analysis by area, companies can determine whether it makes sense to leverage.

Flexible Seating: Many companies are moving from assigned seating and 1:1 desk-to-employee rations to hot desking and other flexible models. Real-time utilization of desks can help companies orchestrate these efforts effectively. 

Explore these and more use cases for workplace sensors in your office in 2024 in our ultimate guide.

Concluding thoughts

Q4 provided even more evidence that workplace utilization rates have stabilized and that (most) companies need to shift from “willing” a pre-pandemic reality to optimizing their spaces for maximum productivity and employee satisfaction. “Like it” or “lump it,” we’re in a new world.

But there are many reasons to “like it.” Companies can stop creating adversarial relationships with employees over unrealistic goals. They can reduce costs through rightsizing and move to premium spaces employees will love. They can end the cubicle ghost towns and open plan designs emphasizing excess ‘me space.’ 

Most importantly, workplace leaders can do what they love again — provide value that results in more productive and satisfied teams. It’s going to be a big year for workplace teams, and I, for one, am so excited by what it will bring!  

Stay tuned. In April, we’ll be releasing our first WUI report on Q1 2024. 

Shivaun Ryan 
Global Director, Customer Success & Workplace Insights,
XY Sense

 

Interested in learning more about your company’s own unique workplace utilization profile?

Get in touch to coordinate  1-1 briefing or request a demo of our platform.

 

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