Few Businesses Actually Cut Space, New Study Finds, As Pandemic Enters Third Year
Only 5.5% of businesses have reduced their office space since the beginning of the coronavirus pandemic, according to new U.S. Bureau of Labor Statistics data.
Despite fears that businesses might dramatically decrease their office space or get rid of them entirely, the report stated that 90% haven't changed their square footage, instead electing to redesign their spaces. Two-thirds of employers said that their companies planned to redesign their spaces for hybrid working, according to a January 2021 Work Trend Index survey cited by Business Insider.
That is a stark turnaround from predictions earlier in the pandemic that companies would substantially slash square footage. A September 2021 report from Gensler suggested 44% of companies surveyed expected to downsize their office after the pandemic ends.
Information companies were the private industry most likely to downsize, according to BLS numbers, with 10% decreasing their space since Covid-19 began. Conversely, those industries based around in-person work, such as mining, construction and retail, were much less likely to cut space. Only 2% of natural resources and mining companies downsized, for instance.
Business owners have stated that a physical office is necessary for team collaboration and to maintain workplace culture throughout the pandemic.
"We simply don't really know that when the fear of virus goes away whether people's feelings around coming back into the office will change," Michael White, a managing director of architecture at Gensler, told the LA Times last year. "But there is still a fairly significant need that most employees, and certainly most companies, see for the office in a very profound way."
As businesses play with their office arrangements, flex space for hybrid workers has been a consideration. About 38% of large enterprise occupiers are using flex space to test out alternate forms of offices, according to new data from CBRE. Roughly 31% are using it to enter new markets. Flex office improved in general through 2021, CBRE stated, with small and midsized businesses carrying the growth in sales and occupancy.