New research from occupancy analytics provider Relogix finds that organizations are continuing to expand their hybrid work offerings and office occupancy rates remain low, giving organizations the ability to greatly cut real estate spending.
This comes despite some organizations strongly encouraging—and some mandating—a return to the office, representing further evidence that demand for flexible workplace policies remains strong.
According to the Ottawa-based firm, workplaces were already underutilized before the pandemic, with occupancy rates in North America sitting at about 64% in 2019, the equivalent of 3.2 days out of a five-day work week. In 2022 as a whole, occupancy rates are just below 30%, or 1.49 days per week.
In September, office occupancy rates remained at 34%, the same figure reported in April.
Sandra Panara, director of analytics, insights and innovation at Relogix, says in a statement that the data is proof that hybrid work is here to stay. The goal of the study is to illustrate that empirical data is available and fills the gaps that other data sources have exposed.
“Workplace technologies like sensors and people counters enable deep analytics that reveal actual workspace demand and changing employee preferences,” Panara says. “With these insights, organizations can make more confident decisions as they continue to make sense of hybrid work.”
The report also compares occupancy to utilization, saying occupancy is a conservative metric that ignores hours of use and instead only tracks presence. A space can be classified as occupied if it is used for any amount of time in a given day.
In a review of distinctions by space types, the report found that desks have a total average utilization of 8%, indicating that overall hours of user per day for the desk category is 38.4 minutes of an eight-hour day.
While desks and private office occupancies remained consistent with little change in the previous six months, overall usage was down. However, private office occupancies were slightly higher each month in 2022 compared to desk occupancy.
These shifts in employee behavior can result in significant cost savings for organizations, as the Relogix study claims that the existing 1.3 million square feet required for just desks and offices to support pre-pandemic work patterns in the study’s sampling could be reduced to just 358,000 square feet to support new hybrid work patterns.
That could result in the total current associated spend of $44 million being reduced to just $12.5 million, the study finds.
This could allow organizations to either exit existing leases or repurpose some of that space to support changing utilization preferences and behaviors and ensure that hybrid work space planning is successful.
Relogix CEO Andrew Millar says this data gives organizations a better idea of how varied occupancy levels can be depending on location.
“When considering occupancy analytics to unveil gaps and areas where organizations need to be more agile to support the work-from-anywhere world, it’s key for workspace assessments to go both wide observing trends and deep, to understand differences in-use by segmented data sets,” Millar says. “The nuances found within the data of this benchmarking report can help organizations better develop and align their workplace strategy programs.”