In corporate real estate, we have a new truth

In The Matrix, Neo must choose between the life he knows and the unknown. He takes the red pill and awakens to a new reality. In corporate real estate, we are doing the same as we discover that some of our deepest beliefs are no longer true. The most powerful change, and what many people have not yet realized, is that employee experience and cost savings now complement each other. This alignment has not occurred in living memory. Cost takeout and employee satisfaction have always conflicted. Expense reduction has traditionally meant that something was taken away. Business leaders understood that workforce quality of life was not good for the bottom line.

But in the new paradigm, the need for in-person collaboration coupled with demand for flexible work has led us down an unfamiliar path. That path has revealed three truths that are now undeniable. But before you continue reading, you must decide whether to take the blue pill, stop here, and remain grounded in the world you know, or take the red pill and read on to discover our new reality.

The data have begun to reveal a different but compelling story.

The future office will be high density. We will not go to an office to socially distance, to work alone, or to avoid interaction. Nor should we. We gather to connect, to ideate, and to feel energized. A half-empty restaurant does not attract diners, and a barely occupied office will not attract workers.

Concern over safety and separation have waned. The data have begun to reveal a different but compelling story. What draws us to the workplace is not free doughnuts—it’s each other. In an Accenture survey from July, when asked, “Would you be more likely to go to the office if you knew many of your colleagues would be there too?” more than 65% of respondents said yes (1). In a Microsoft survey from September, 84% of employees said they would be motivated to go in by the promise of socializing with co-workers (2).

We know that most office work can be done remotely. We have done it for more than two years. But our seclusion has left a void. We miss the human interaction that we need to work effectively and to be fulfilled. Prior to the pandemic that connection was not hard to find. In the new world of work-from-anywhere, the high energy and interactive environment we crave does not exist.

Most people have resumed pre-pandemic life with one great exception, they no longer frequent their office.

Flexible work has crushed utilization. Even pre-pandemic, when most workers were expected to come in five days a week, the average U.S. office had less than 60% occupancy. If you wonder how hybrid work has changed that, stop by your workplace sometime. You will likely see a large, sparsely occupied expanse of cubicles. As of October, occupancy remains less than half what it was before March 2020 (3). For most companies that means their offices are less than 30% occupied.

Still, the data are clear: flexible work is here to stay. Most people have resumed pre-pandemic life with one great exception, they no longer frequent their office (4). In fact, we now know that much of what we believed in opposition to this type of work is simply not true—for example, the idea that in-office work is more effective. Productivity for those working from home is not only equal to onsite work but has actually risen 5% since the pandemic began, according to a study by the National Bureau of Economic Research (5). In a Cisco study from April, 82% of employees said the ability to work from anywhere made them happier, and more than 60% felt their productivity was enhanced (6).

Employers have heard the message. Their people want more freedom to choose where work is done. As of June, employer plans for hybrid work have stabilized at an average of 2.3 days a week in the office (7).

But the desire for a work-from-anywhere schedule coupled with a need for in-person interaction has created a challenge. To force people back to the office five days a week is not the answer and, at this point, is not even possible. To re-create the energy we once had requires a different solution.

Employers will not continue to fund buildings and spaces that are barely occupied.

Desk sharing will reign supreme. Workstation ownership is dead. Remove the Beanie Babies that hang from your monitor, collect your pictures, your tape dispenser, and the staple remover that you never use. Put them all in a box and take them home. Or if you work at a forward-thinking company, move them to an onsite locker.

Employers will not continue to fund buildings and spaces that are barely occupied. It is an enormous waste of resources to provide an assigned desk that will be used, on average, two days a week. Company leadership will insist on free-address workstations, and they will get them.

The resistance that many employees have long held against hot-desking has weakened. Their defiance has been replaced by their need for autonomy. In a recent Accenture survey of office workers, when asked, “Would you give up an assigned workspace in your office to work remotely at least two days per week?” more than 65% said yes (1).

Although many companies have modest desk sharing in some locations, current practice falls well short of what has become necessary. The headcount-to-workstation ratios must increase considerably, in many cases by triple or more, to reach an occupancy level that delivers the vibrant work environment so many of us desire.

This new degree of desk allocation will require substantially fewer seats, which means much less square footage. The transition will necessitate an increase in collaborative space, but the net result will be a downsized footprint and significantly reduced expense.

In The Matrix, Neo harnesses the power of his new world. Companies have a rare opportunity to do the same. The future office will be high energy and high efficiency. Work flexibility will enhance employee experience. Desk sharing will restore our lost office vitality, streamline the footprint, and reduce cost. Business leaders who embrace this new model will outpace their competitors with a real estate portfolio that increases worker productivity, strengthens collaboration, and improves the bottom line.

1. Accenture Workforce Sentiment Analysis?2. Microsoft Survey?3. Kastle Systems RTO Barometer ?4. Kastle Systems Work vs. Social Activity?5.National Bureau of Economic Research?6. Cisco Study?7. WFH Research??

(This column originally appeared in?The Registry.)