75% of companies plan to cut office space in 2024, but return-to-office mandates are gaining momentum (2024)

Dive Brief:

• Seventy-five percent of businesses surveyed plan to reduce their office square footage in 2024, nearly 30% more than in 2022, according to a 2023 office space report from workspace platform provider Robin.
• However, 88% of the companies surveyed said they are mandating that employees work a certain number of days onsite — up nearly 20% since 2022 — the firm stated.
• Eighty-two percent of the companies surveyed expressed concern about their ability to retain their current office space due to recession or space underutilization, the report said.

Dive Insight:

Robin, which offers a platform for desk booking, room scheduling, visitor management and workplace analytics, polled more than 500 facilities managers and business owners to gather insights into how they’re using their current office space and what they are planning for 2024.

The survey found a 19% increase in predominantly full-time office work and a 21% decline in hybrid work, since its last report in 2022. Fifty-six percent of respondents said the majority of their employees work on-site full time, while 40% said a majority of their teams are hybrid.

The length of time employees must be in the office appears to be growing: The number of businesses with four-day-a-week in-office mandates has increased by 32% since last year, while the number of companies with three-day-a-week in-office mandates has dropped 16%, the report states. Fifty-two percent of companies reported that their employees must be in the office four days a week, while 26% and 16% said they mandate three days and two days per week, respectively.

Despite this increase in on-site attendance, 80% of offices surveyed have downsized their space since the pandemic — a 20% increase since 2022, the report said. The growing proportion of companies that plan to reduce space next year may indicate that companies are waiting for utilization to increase before they make space-cutting decisions, Robin said.

“As companies have leases coming due, they are trying to bring down space to a level that makes sense financially. Most of them won’t renew their lease,” Robin CEO Micah Remley said in an interview. “That means the mandate out there for facilities managers is that they've got to do more with less when it comes to office space.”

The survey found that 40% of companies are currently utilizing half of their available space or less, with only 28% of businesses using 100% of their offices. While this is more than last year, organizations are split on whether offices will ever go back to pre-pandemic levels of activity — 42% of respondents say yes and 58% say “that volume of office attendance is long gone.”

Flexible seating arrangements are at the core of the evolving workplace because they require less square footage than traditional office layouts, Robin said.

To support evolving employee needs, 89% of offices are revamping their layout and outfitting their spaces with amenities more suited to current work behaviors, the report said. Most respondents mentioned incentivizing trips into the office as a measure to “remedy low attendance rates.”

Soft seating, such as lounges or couches, are the most commonly reported amenity organizations are offering to employees, mentioned by 60% of respondents, followed by collaboration and huddle rooms (58%), quiet rooms and booths (54%) wellness spaces (53%) and hot desking (53%). Robin noted that the most prevalent amenities mentioned enhance collaboration or focus work.

Remley pointed to the need for analytics and data as well as on defining the goals of an office space so that facilities managers can prepare for more employees returning to work in smaller spaces. “What we’re seeing is that decisions are made by facilities managers, real estate [and] IT professionals and HR,” Remley said. “So, working cross-functionally is becoming more important as technology becomes more critical to how the office functions.”

Recommended Reading

• Growing US office foot traffic drives surge in bookings through H1 ’23 By Nish Amarnath • July 19, 2023
• Rethinking office spaces: Employee preferences and the future of work By Caroline Colvin • Sept. 22, 2023
• Office utilization rates on climb to pre-pandemic levels By Joe Burns • Oct. 4, 2023