Talent Management

Undaunted by Hybrid Work, Companies Are Opting for Bigger, Smarter, Greener Offices

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Four out of five office decision-makers say their organization needs an office to operate.

As companies ease into their post-pandemic work plans, questions around what to do with office spaces loom large. Does the pre-pandemic office work for the talent needs of today? Does it even make sense to have an office in a world where remote work has become ubiquitous?

To help business leaders decide what to do with their office, Capterra surveyed[*] over 300 office space decision-makers at U.S. companies. What we learned is that offices aren’t going anywhere anytime soon (unless you’re one type of company; more on that later). In fact, the COVID-19 pandemic has provided the perfect opportunity for employers to rethink their offices to make them more modern, more agile, and more in line with the future of work.

Key findings
  1. A large majority of employers believe offices are still essential: 80% of office DMs say their organization needs an office to operate.
  2. Most companies are moving to larger offices (but remote employers are eliminating them): 76% of companies have already or plan to move to a larger office, but 69% of companies where all employees will work remotely long-term have already or plan to eliminate their office entirely.
  3. COVID-19 prompted two major office changes: Contactless technologies and dedicated video conferencing rooms were implemented by 44% and 43% of companies, respectively, during the COVID-19 pandemic.
  4. ABW and biophilic design are the office trends to keep an eye on: Activity-based working (ABW) and biophilic design principles have already been or will be implemented into offices by 86% and 76% of organizations, respectively.

In a hybrid world, offices are critical

The biggest factor influencing what businesses will do with offices moving forward is how often employees will actually work out of them. In this regard, one thing is certain: the hybrid model, where employees split their time working in an office and at home, has become the standard.

Despite only 20% of organizations being hybrid before COVID-19, our survey data shows that 64% plan to be hybrid long-term. These plans are consistent across business sizes.

Bar chart showing that 64% of companies will be hybrid long-term.

At one point early on in the COVID-19 pandemic, the office was dead weight. By May 2020, close to half of all U.S. employees worked exclusively from home[1], and businesses needing to cut costs were strongly tempted to do away with offices that sat unused if the opportunity arose.

As the pandemic has subsided, corporate philosophy toward offices has shifted. Even though the hybrid format means workers aren’t in the office the entire time, 80% of office DMs in our survey say their company needs an office to operate. Another 18% say that while offices aren’t technically necessary, the benefits of having one outweigh the costs.

Pie chart showing that 80% of companies believe they need an office to operate.
Takeaway

In other words, the “death of the office” has been greatly exaggerated. Offices will continue to be critical for most businesses moving forward—to foster collaboration, to create a cohesive company culture, and to give employees an optimized space to get work done.

Offices are getting bigger (with one major exception)

Even if your office is critical, we would expect most businesses to downsize their office footprint if they’re moving to a hybrid model long-term in order to save money (fewer employees in the office at one time means less space is needed overall). Instead, we find the opposite.

When asked what changes had been made to the size of their office during the COVID-19 pandemic, 76% of surveyed office DMs say their employer has already or plans to relocate to a bigger office. Only 23% said the same thing about relocating to a smaller office.

Infographic showing that 76% of companies have already or plan to relocate to a bigger office.

What seems counterintuitive on the surface makes sense when you consider two critical factors:

  1. The average business is growing: Since the beginning of 2021, the number of hires made by U.S. businesses has been steadily increasing, despite higher turnover caused by the Great Resignation.[2] Even in a hybrid format, companies still need larger offices to accommodate increased headcount.
  2. Companies want more flexible workspaces: When asked to rank the most important factors their employer is considering when designing offices moving forward, office DMs ranked flexibility (56%) only behind productivity (63%) in our survey. Instead of cramming workers into a one-size-fits-all concept, companies are opting for larger spaces to allow for more flexible work environments (more on this later).

For companies where all employees will be working from home long-term, however, the office represents an unnecessary expense. As a result, 69% of office DMs at such businesses say they already have or plan to eliminate their office entirely.

Pie chart showing that most remote employers have already or are planning to eliminate their offices.

For remote startups and small companies with employees spread around the country, having no office at all is becoming a popular way to cut costs.

COVID-19 accelerated adoption of contactless tech and video conferencing rooms

Diving deeper into office design, we find that two design trends took off during the COVID-19 pandemic. The first is contactless technologies, which is the use of keycards, smartphones, or other devices to unlock or open office access points without employees having to physically touch them.

Forty-four percent of office DMs in our survey say their organization implemented contactless technologies during the COVID-19 pandemic.

Pie chart showing that 44% of companies adopted contactless technologies in their office during the pandemic.

When the health and safety of workers became a critical priority at the height of the COVID-19 pandemic, contactless technologies became a must-have office upgrade to mitigate virus spread.

Not only do contactless technologies eliminate shared surfaces (such as doorknobs) that make it easier to spread germs, but they also allow employers to maintain tighter access controls to enforce lower capacity limits. If a worker wasn’t supposed to be at the office at a certain day or time, the technology simply wouldn’t allow access.

Far from a one-trick pandemic pony, however, contactless technologies will continue to provide value in areas like security. Contactless smart locks, for example, use unique identifiers from keycards or phone apps to take detailed logs of who entered each access point in an office, and when.

An image of an employee unlocking an office door with their smartphone.
An example of a contactless office door lock[3]

The other office trend that took off during the pandemic is dedicated video conferencing rooms, which have enhanced audio and video equipment optimized for the video meeting experience. As video meetings took over the work world, 43% of office DMs tell us their business implemented dedicated video conferencing rooms in their office.

Pie chart showing that 43% of companies implemented dedicated video conferencing rooms in their offices during the pandemic.

Compared to a phone, laptop, or other single-user device, dedicated video conferencing rooms provide a better web meeting experience for groups by using bigger screens, better cameras, louder speakers, and more effective microphones. Besides giving employees a room optimized for a now-common occurrence, dedicated video conferencing rooms also help employers standardize the hardware and apps used for meetings—reducing security vulnerabilities.

The next big office trends? Activity-based working and biophilic design

Our data shows that companies have already made major changes to their offices during the pandemic. But what kinds of office design changes should we expect moving forward? The first is called activity-based working, or “ABW” for short.

ABW is a design concept that gets rid of the idea that employees stay at their desk all day. Instead, employees move around to different areas of the office that are optimized for different types of work activities as needed.

An employee may go to a secluded alcove to get head-down solo work done, then to a desk “neighborhood” with their co-workers to catch up on group projects, and finally over to an area with break-down workbenches for a quick meeting with their manager—all in the same day.

A rendering of an office designed around activity-based working.
An example of an office designed around activity-based working[4]

Breaking employees out of old habits can be a challenge (early ABW adopters found that employees routinely returned to their desk when they weren’t supposed to), and only time will tell if ABW retains benefits long-term after the novelty has worn off, but initial research shows promise. A 2018 study found that workers in ABW-designed offices were less sedentary and more satisfied with their physical work environment overall.[5]

While less than a third of companies (31%) used ABW concepts in their office before the pandemic, we find that a majority (55%) either implemented ABW during the pandemic or plan to implement ABW in the future.

A pie chart showing that 86% of companies have already or are planning to implement ABW into their offices.

Another office design trend making waves is called biophilic design. Intended to reduce employee burnout, biophilic design centers around bringing natural elements into the office. Amazon’s famous “Spheres” office in Seattle is a prime example of this: Big windows for more sunlight, a plethora of plants and natural design elements, and speakers that play nature sounds—all to make the workplace a little more calm and zen.

An example of biophilic design in Amazon’s Spheres[6]

The cumulative effect of these natural elements on worker mood can be substantial. In a 2020 study, participants in biophilic environments had consistently better recovery responses after experiencing stress compared to those in non-biophilic environments.[7]

Similar to ABW, just one in four companies in our survey had implemented elements of biophilic design into their offices before COVID-19. But we find that more than half (51%) either implemented biophilic design during the pandemic or have plans to implement biophilic design in the near future.

Pie chart showing that 76% of companies have already or plan to implement biophilic design into their offices.

A recession could bring office changes to a grinding halt

Instead of abandoning their offices, our data shows that companies are working hard to not only make offices more viable for the future of work, but also make them enticing destinations for employees that have grown accustomed to their home office. There’s just one problem: a potential recession could upend everything.

In fact, 65% of office DMs in our survey say the possibility of a recession has already altered their organization’s office plans. You may be putting off big office changes yourself until the financial windfall from a major recession is understood.

Whether you’re renovating it now or later, having an office retooled for the needs of hybrid work should be a critical priority for most employers. If you’re unsure where to start bringing your office up-to-date, Gartner finds that 70% of organizations start a smart office journey by deploying an integrated workplace management system or a resource scheduling application.[8]


Methodology

*Capterra’s 2022 Office Space Survey was conducted in August 2022 among 301 office space decision-makers at U.S. companies. Respondents were screened for three criteria: 1) They each had to be at the director level or above at their employer, 2) they each had to have extensive knowledge of workspace and real estate plans at their employer, and 3) employees at the respondent’s employer had to primarily work out of an office before the COVID-19 pandemic. The goal of this survey was to understand the office footprint and design choices that businesses have made or plan to make in the wake of COVID-19 and other significant shifts to the way we work.

Sources

  1. A Two-Year, 50-Million-Person Experiment in Changing How We Work, New York Times
  2. Job openings, hires, and separations levels, seasonally adjusted, Bureau of Labor Statistics
  3. How to Use Mobile Access for Your Business, Kisi
  4. RAW Design Consultants Facebook Page, Facebook
  5. The Impact of Activity Based Working (ABW) on Workplace Activity, Eating Behaviours, Productivity, and Satisfaction, International Journal of Environmental Research and Public Health
  6. Go inside the Amazon Spheres. Here’s how., The Seattle Times
  7. Effects of biophilic indoor environment on stress and anxiety recovery: A between-subjects experiment in virtual reality, Environment International
  8. Create Smart Offices That Optimize Employee Experience, Safety and Well-Being, Gartner

Looking for Scheduling software? Check out Capterra's list of the best Scheduling software solutions.

About the Author

Brian Westfall

Brian Westfall

Brian Westfall is an associate principal analyst at Capterra, covering human resources and talent management. His research on the intersection of talent and technology has been featured in Bloomberg, Fortune, SHRM, TIME, and The Wall Street Journal, among other publications. When he’s not playing with his two corgis, he can be found traveling the world.

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