Top Priorities: Reducing Real Estate Costs, Investing In “Right” Workspace

Study finds business leaders consider reducing real estate expenses a top priority, along with investing in a workspace aligned with their organization's culture.

Of 456 business leaders surveyed, 43% say reducing real estate costs will be a top priority in the next one to three years, while 31% will prioritize investing in a workspace that aligns with their organization’s culture and mission, a new study reveals. Still, three out of four say they lack utilization and space data to make informed decisions about their workplace and real estate needs, according to FM:Systems’ 2022 Refocus and Rationalize the Workplace study, which surveyed U.S. business leaders in HR, finance, facilities and real estate.

workplace and real estate needs,
(Photo: Adobe Stock by Vasyl)

“The data tells us that while many organizations have successfully overcome the early return to work challenges following the pandemic, there is still much uncertainty about how their workplace is working for them – both as a company and for their employees,” said Kurt von Koch, CEO, FM:Systems. “Business leaders realize the new world of work continues to evolve quickly, so much so that what may have seemed like a convenient office location, smart floor plan, or attractive amenity not long ago, may not actually match how, when and why people are using these spaces today.”

What Are Today’s Workplace And Real Estate Needs?

workplace and real estate needs
QUESTION: What aspects about the future workplace are a priority for your organization?

After working remotely for so long without productivity suffering, organizations want the physical office to be a place employees want to come to work and can get the most out of working together in-person, like collaborative work, ideation, and culture building opportunities.

  • Half of all business leaders believe their future workplace needs to be centrally located to most employees.
  • Business leaders believe team meetings (54%), collaborative work (45%), client meetings (37%), and onboarding new hires (31%) are among some of the primary roles of today’s workplace.
  • Finding an office with nearby amenities, including access to fitness studios, restaurants, coffee shops, and outdoor opportunities for employees are also priorities for nearly 32% of business leaders.
  • Health and wellness spaces, like meditation rooms, access to outdoor spaces, and dedicated private spaces for employees breastfeeding to pump, also ranked high (28%) on the list of aspects business leaders want to offer their employees; as did indoor air quality (35%) as a top priority.

workplace and real estate needsDespite a majority (80%) of business leaders believing hybrid work will continue to dominate over the next 1-3 years, 61% would prefer employees back in the office full-time.

While many employers continue to struggle with embracing new ways of working, there’s consensus that hybrid work will continue to be the primary work model.

  • Business leaders who think it’s important for employees to work in the office full-time say it provides an opportunity to strengthen company culture when everyone’s in-person (64%) and supports the organization’s mission (60%) as top reasons. Nearly half (48%) believe people are less productive when remote. That sentiment was strongest among organizations in finance (35%) and healthcare (19%).
  • Even among those who favor full-time office work, 76% of all respondents acknowledge hybrid work will lead because it allows employees to achieve a better work-life balance. 56% also believe hybrid work will help them attract and retain talent.
  • More than half (56%) think hybrid work is here to stay because people can choose how they’d like to get different types of work done, when and where they’re most productive.
  • Nearly 36% of all business leader respondents believe hybrid work provides the opportunity for reduced amounts of real estate, and thus saving on real estate costs.

76% of business leaders say they lack utilization or space data to make informed strategic real estate decisions as they face the realities of changing work patterns, shifting employee attitudes and expectations, and a potential economic downturn.

Many business leaders are having to make important real estate decisions without reliable workplace data.

  • Part of the challenge is that 37% of organizations say they have been tracking their new hybrid work arrangement either manually or not at all, including 31% of organizations with over 1 million in square feet of office space and 32% of organizations with 10 or more offices.
  • Most business leaders would like to spend less time on manually tracking employee attendance (41%), manually tracking visitor traffic (38%) and space planning (34%), if they had a workplace management solution that could automate these tasks.
  • Out of all the survey respondents, access to accurate utilization (44%), followed by space (32%) data are considered to be most lacking to confidently inform real estate and workplace decisions in the next 1-3 years; surprisingly, organizations with over 8 million square feet of office space reported cost (37%) as being the most limited data source, also followed by space (34%).

Long View On Workplace Design

workplace trendsHybrid work is here to stay—here’s how facility managers can refresh their office spaces to reflect this new normal.

“…as organizations face ongoing pressures of a tight labor market and economic uncertainties, they know they can no longer make real estate decisions based on cost or availability alone,” said Brian Haines, Chief Strategy Officer, FM:Systems. “To deliver the right spaces and experiences for their teams, while also uncovering cost-reduction opportunities, will require using a multi-point data analysis approach. This’ll capture everything from workplace utilization, employee mobility, and more.”

Click here to read more facility management-related news about Workplace Culture.

LEAVE A REPLY