The Growth of Flexible Office Space

As the return to the office kicks into high gear, it’s clear that hybrid work is the new normal. With fewer people in the office on a daily basis, companies will need to rethink and reallocate space.

An increasingly mobile workforce will have implications for office design. The “one person per desk” model is rapidly becoming a thing of the past, and flexible office space is swooping in to take its place.

The majority of companies plan to adapt space to align with this new reality. According to CBRE research, more than 65% of businesses are considering changes to offices, workstations, and amenities, and nearly 80% are rethinking their collaborative spaces.

Activity-based seating

With the dedicated use of office space diminishing, companies are turning to activity-based seating. The strategy allows employees to choose from a variety of settings the one best suited to the task at hand. These environments range from small, private cubicles to large open lounges.

Research conducted by CBRE shows that 86% of companies are actively mobilizing to increase the number of employees that occupy activity-based seating.

As the office is recalibrated, priority will be given to spaces that foster the face-to-face collaboration, team connection, and community that employees desire in the post-COVID office. Overall, there will be a shift from “Me” to “We” in the way space is utilized.

“By adopting a flexible workplace and occupancy model, companies will not only meet the modern workforce where they are; they will be better positioned to support their team’s dynamic needs in the office, now and over time” says CBRE’s Lisa Fulford-Roy, Senior Vice President, Client Strategy. “The result is happier, more engaged employees and a company better positioned to retain talent.”

Implications for real estate

As the purpose, and setup, of the office changes, companies will seek efficiency in their square footage. In the past, most organizations that operated under a “one person per desk” office model kept about 10% to 15% of space vacant for new hires or other contingencies, which came at a hefty price.

But with hybrid work on the rise, some organizations will be able to occupy a smaller office and instead utilize flexible space to meet any spike in employment. Those that do opt for less space will utilize every inch to its greatest potential: an unused corner will be transformed into a private phone room, a kitchen turned into an impromptu meeting space.

According to a CBRE Occupier Sentiment Survey, over the next three years, 81% of large companies (those with over 10,000 employees) plan to shrink their portfolio, while 40% of small companies (fewer than 100 employees) will grow their square footage.

Whether they’re expanding or contracting their footprints, though, businesses of all sizes will hold more flexible office space by 2023 than they did pre-pandemic.

Approximately half of all small, medium (100 to 9,999 employees), and large-sized companies surveyed plan to make flexible space a significant portion of their real estate portfolios in the near future. Driving factors include flex space’s ability to reduce capital expenditures, allow businesses to test new models, and offer employees more choice.

With myriad benefits to businesses and employees alike – and its adoption driven by the steady rise of hybrid work – flexible office space will become the new normal, too.

Its growth will certainly have an impact on office utilization, but it will not be its demise. Rather, as we emerge from the pandemic, the office, like the rest of the world, will be given a fresh start.

By CBRE