Around half of all Facilities Managers plan to downsize their office space in the next three years. How, and why?
As more employees split their time between home and the office, maybe you’re thinking about whether all this open desk space is even necessary (we know senior managers are!). But will this trend lead to significant downsizing?
Our recent survey, conducted across the U.K., U.S., Singapore, India, New Zealand, and Hong Kong, interviewed over one thousand office workers and facilities managers to explore changing office habits and attitudes. Surprisingly, we discovered a big preference among employees for personal and hybrid-friendly spaces, a shift strongly reinforced by the pandemic, and seemingly, not going anywhere.
Half of facilities managers we spoke to expect their companies to reduce office space within the next three years. Their main motivation is creating innovative new environments, and of course potential cost savings. But how exactly will this affect day-to-day operations, and isn’t it already?
The shift towards hybrid working
Many eons ago, hybrid working was the rare exception, not the norm. The pandemic changed all of this. The taste of flexibility was infectious and understandably, employees now prefer splitting time between home and the office. Our research highlights that 47% of office workers prefer a hybrid working schedule, significantly higher than the 41% who prefer working full-time in the office.
It’s not surprising then that businesses are reconsidering their real estate. With fewer people in the office daily, traditional office layouts now feel outdated, sometimes even eerily empty. While there’s been some hesitancy to pull the trigger on big downsizing initiative among bigger multinationals, could downsizing become the new normal?
Why downsize? (Other than cost)
Facilities managers in our survey, as well as our clients more anecdotally, saw two main reasons for downsizing:
- Encouraging collaboration: Hybrid-friendly office designs allow for creative ways of playing with office space, not just the standard open plan catch-all. Interactive areas and spaces that foster creativity are seem as places for office designers to work their magic.
- Sustainability goals: Moreso in developed economies, downsizing aligns closely with sustainability objectives, reducing carbon footprints, lowering energy consumption, and cutting operational costs. Sustainability is already a high priority for 59% of businesses surveyed, reinforcing the drive toward smaller, greener spaces.
Practical implications: a primer
Downsizing office space isn’t just a financial decision; it significantly impacts the wellbeing of the people working in the organization undertaking it. Businesses planning to reduce their office footprint have to carefully consider balance. Do some of your employees want to work from the office five days a week? If so, it needs to accommodate them too. Is there some particular bugbear to your office culture everyone complains about? Now’s the time to solve it, and so on.
We call this out because our research highlights a gap between managers’ and employees’ perceptions of office wellbeing, with 75% of managers satisfied compared to just 67% of employees. Reducing office space without addressing employee concerns could widen this gap.
And the biggest challenges…
While downsizing offers clear benefits, it also presents challenges. One key issue is managing physical assets currently in storage. Our survey found 64% of companies store desk equipment, and 59% store small office equipment. Companies downsizing must effectively manage or recycle these assets. Not just for the sake of cost, but because let’s face it, it’s good for brand reputation too (it’s a nice story to tell).
Employee morale is another concern. Downsizing office space can create uncertainty and anxiety among staff. Make it clear from the outset this isn’t a job-cutting exercise, it’s explicitly designed to make the working environment more pleasant, and build something around this new normal of hybridity. It may seem obvious, but to more junior staff, it may not be so clear.
Are there any success stories to point to?
While it’s too early to speak of a downsizing rush, some tech giants like Meta and Microsoft have adjusted their office footprints significantly since adopting hybrid work models. Meta, for instance, actively reduced its leased office spaces to match fewer daily in-office workers, resulting in considerable cost savings. Remember leasehold lengths are holding up some of this change, so keep your eyes peeled from now until 2028
“I’m a Facilities Manager and I want to downsize, what now?”
To keep it simple, start with these five considerations in mind:
- Assess your current and projected office usage realistically. Do you have an idea of asset utilization as it relates to your offices?
- Engage employees early in the decision-making process. We really can’t emphasize this part of the process enough.
- Clearly communicate your reasons for downsizing, emphasizing benefits such as improved collaboration, flexibility, and sustainability.
- Develop clear plans for managing office equipment, either by recycling, selling, or donating to avoid waste.
If you’d like to get started with an office downsize, you can get in touch with one of our experts today and we can handle the whole process, from IT recycling to design and fit out.
You can also explore our previous articles about our survey findings:
- Are remote setups beating the office in terms of tech and comfort?
- Is it time for offices to get personal again?
For deeper insights into the future of office environments and what your employees are thinking, download the survey:
Read more: Is it time to kill the open office?
