AWA Hybrid Index Report Shows Employers are Cutting Back on Office Space

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• AWA Hybrid Index Report Shows Employers are Cutting Back on Office Space

15 August 2023

With workers coming into the office an average of 1.75 days a week, companies are finding their real estate needs reduced.

The latest AWA Hybrid Index Report, which studied 119 workplaces in 22 countries, found that organisations are responding to the shift to hybrid working by improving their desk use in offices and reducing their real estate needs.

"Savvy employers are using the new reality to become more efficient, improving desk use and reducing their real estate needs. We expect this to result in a gradual build-up of empty office space over the next 5-10 years as leases expire, with a resultant downward pressure on rents and asset values.”

–Andrew Mawson

Founder, AWA

37 per cent of employers said they were planning to reduce their office space through disposals, subletting or consolidation, although some are waiting for lease breaks or repurposing office space for other uses. This is a result of the improved desk utilisation as organisations adapt to the new reality of hybrid working, with the percentage of desks in use on average rising to 48 per cent from 33 per cent a year ago. UK employers are the most efficient users of desks, needing just 59 desks per 100 employees, while the US is the least efficient, needing 107 desks per 100 employees.

Workers continue to prefer to come into the office on Tuesdays, Wednesdays and Thursdays, though Monday attendance has improved. On Friday less than a quarter of employees chose to travel in.

Andrew Mawson, Founder of AWA, said: “While the figures show a slight increase in office attendance, overall we think we may have reached a steady state on hybrid working. Savvy employers are using the new reality to become more efficient, improving desk use and reducing their real estate needs. We expect this to result in a gradual build-up of empty office space over the next 5-10 years as leases expire, with a resultant downward pressure on rents and asset values.”

46% Do Not Have a Hybrid Working Policy

Three years since working practices changed at the start of the COVID pandemic, 46 per cent of offices do not have a hybrid working policy.

Andrew continued: “In our experience, hybrid working changes everything from employment contracts, skills, recruitment strategies, workplace design, security and more. While some organisations have taken a ‘let’s see what happens’ approach to hybrid working since the end of the pandemic, we believe it’s now time for all organisations to develop holistic hybrid working policies and address a wide set of issues to prepare themselves for the future.”

Picture: a photograph of a person working at a hotdesk on a laptop. Meeting rooms can be seen in the background, as can a plant which creeps into the camera's view. Image Credit: Unsplash

Article written by Ella Tansley | Published 15 August 2023

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