Over Half of Large Global Companies Will Choose Hybrid and Cut Office Space

As reported by Reuters,  property consultancy Knight Frank found that half of large global companies plan to cut office space in the next three years as they adapt to hybrid work arrangements since the Covid pandemic. HR Policy Global conducted a survey regarding hybrid workplaces across global regions and the results will be shared later this year. 

A survey of executives in charge of real estate at 350 multinational companies found that half of the largest companies surveyed — those with more than 50,000 staff — expect to shrink their global portfolios by between 10% and 20% in the next three years. However, a majority of smaller companies are planning to expand their office space.

Companies are taking different approaches to working from home. According to the survey, roughly one-third of companies have opted for fully or mostly in-person work. The majority (56%) of companies have settled on a hybrid policy, while about 10% plan to be mostly or entirely remote. 

Hybrid working “will stay with us forever.”  Ronni Zehavi, chief executive of human resources tech firm HiBob, warns that companies demanding their workers spend five days in the office “will experience a very high level of attrition." Mr. Zehavi said hybrid working “is irreversible. It's not short-term hype; it's a change that will last for the next ten to fifteen years." He added that around 90% of HiBob's clients were committed to hybrid working and were "finding it very productive." On a shift in working patterns, he added: “It's no longer about counting hours, it's about productivity.” He also expects the five-day working week to become a thing of the past.

A Savills study predicted that U.S. cities like San Francisco and Washington, D.C. will have the most surplus office space in the next decade, while the Asian market will be tighter, and Europe will “sit in the middle of the pack.” Savills research associate Kelcie Sellers said, “This isn’t about offices just becoming empty due to some cities seeing lower return to work levels post-pandemic. It’s about how long-term economic, demographic and development trends interact with working patterns.”

Outlook: We have also seen a split in public policy on this issue. While the Netherlands made work from home a legal right for all employees last year, UK finance minister Jeremy Hunt has suggested that the "default" location for workers should be the office. For businesses, the one-size-fits-all policy might not be working any more. Leaders should have the ability to set the standards for their own group and put emphasis on flexible work fitting the business' needs.

HR Policy Global conducted a survey regarding hybrid workplaces across global regions and the results will be shared in the next few months.