The demand for hybrid work is reshaping how companies utilize real estate
After the pandemic lockdown, HB Workplaces (formerly Henriksen Butler) welcomed employees back to its offices throughout Utah, Idaho and Nevada. The management team worked tirelessly to find answers to the big questions companies worldwide were facing: Do we come back five days a week, 8 a.m. to 5 p.m., or do we offer a remote/in-office hybrid? How do we configure our offices to accommodate remote and in-office collaboration? How can we ensure all these decisions contribute to a strong culture and customer satisfaction?
Even though a couple of years have passed since the world returned to the office, it seems the questions linger for many office-based businesses. Companies are testing what works best for them, with the Elon Musks of the world famously demanding Tesla employees adhere to full-time, in-office work, while others like Utah-based software company Kadince have opted to go fully remote.
While not everyone relished Zooming from the kitchen table, it’s clear the pandemic’s work-from-home experience sparked a conversation about how companies approach the workplace.
A recent ADP survey of 32,000 workers across 17 countries revealed that 74 percent of workers want flexibility and a good work-life balance. According to a Future Forum pulse survey, workers with full schedule flexibility report 29 percent higher productivity and 53 percent indicated an increase in their ability to focus versus workers with no autonomy over their schedules.
In a low unemployment landscape with increased competition for workers, more companies are giving the people what they want, offering a hybrid schedule with its attractive blend of remote and on-site work. And they’re taking a proactive look at the symbiotic relationship between the hybrid model and floor plan design, office furniture, remote conferencing, space management tech, square footage and more.
When making these decisions, office design companies like HB Workplaces have inadvertently become co-creators of the future of the workspace. “We’re learning from [our customers’] experience, and they’re learning from us,” says Tony DeHaan, HB Workplaces VP of operations and customer success. “There’s a lot of nuance to it, and a lot depends on the industry, the job, and the division within the company. We’re helping create these spaces, so people can come back in and succeed.”
DeHaan says most companies they work with throughout the Intermountain Region are reconfiguring their office space to make the most of the time employees spend there. He says the days of 72″ cubicles are out, and mixed-use space is in, with companies thinking in terms of “neighborhoods” for individual, team and interdepartmental work.
“The way you set up your space can really affect change in the culture,” DeHaan says. “It’s all about fostering engagement with each other.”
Rob Graham, president of Salt Lake City-based MBI Business Designs, agrees that everything from the floor plan to the furniture can elevate hybrid employees’ office experience. “Instead of 100 cubicles in a space, companies might go down to 70 and then create some hybrid areas for lounging and having laid-back conversations,” Graham says.
He notes that many companies are even moving away from assigned cubicles and are offering hoteling, benching and phone boothing instead. Graham explains that with hoteling, employees can reserve a workstation for the day that features a monitor and laptop docking station. For personal items and files, they might wheel over a dedicated pedestal, essentially a mobile filing cabinet they can call their own.
With benching, Graham notes that employees can access an area with a few rows of long tables where they pick a spot for the day and settle in with their laptop and mobile phone (picture the school cafeteria but with nicer tables, power outlets and no food fights). He also explains phone boothing provides small, private soundproof rooms for phone calls or Zoom meetings.
“One good thing that came from Covid is people realize they don’t need a lot of space,” Graham says. “People aren’t using 8-by-8 stations anymore. You can get a lot done on a 2-by-3 work surface.”
"As for office space, many companies are weighing whether to retain the same square footage or downsize. A recent study by JLL indicates that over 240 million square feet of leased office space in the country will expire in 2023 (an increase of 40 percent from 2018)."
As for office space, many companies are weighing whether to retain the same square footage or downsize. A recent study by JLL indicates that over 240 million square feet of leased office space in the country will expire in 2023 (an increase of 40 percent from 2018). In its “Emerging Trends in Real Estate 2023” report, PWC says, “10 to 20 percent of office space may need to be repurposed or removed.”
Fears of a possible recession are causing many to stall decisions on their commercial real estate. “This year, we’re definitely seeing people hesitate,” says Kyle Muir, PowerBx CEO. “It’s not that the spaces won’t be signed on; it’s just that business owners are waiting until their lease is due to decide what they do next. This is where hybrid work and what that means comes into play.”
Muir notes that space competition, for example, can be a challenge in hybrid workplaces. “You might have a situation where coworkers schedule a conference room, but when they show up, another group is in the space,” Muir says. “They can kick out the squatters, but this could cause a rift and kill the creativity that was already underway.”
But when companies have room booking and space management systems, employees can reserve space, check availability and avoid unnecessary grief. Management can also access comprehensive analytics to see where to improve space utilization, leading to informed decisions on right-sizing the square footage, reconfiguring floor plans or even monetizing space.
PowerBx is itself doing exactly that. At its new downtown Salt Lake headquarters, the company dedicated part of its office to coworking, where other companies can use the space much like a WeWork or Kiln. PowerBx is doing the same with its warehouse facility. “We’re going to be Salt Lake’s first co-warehousing space,” Muir says. “Companies can store and ship products from our warehouse, which is managed by our own software. It will be our headquarters, but we’re opening it up for others to work out of all in an effort to inspire culture through collaboration.”
Utah startup Stanza recently launched an online marketplace that offers companies another option for monetizing unused space. Matt Riley, Stanza CEO and founder, describes Stanza as “the Airbnb of office space.”
“We’re making it really easy for companies that may have empty space because employees are remote to list that space for however much they’d like,” Riley says. “People can come in and use it for a day, a week or a month. It turns out there’s this amazing inventory all over the place that has been locked up in lease agreements. We’re opening up this extra tier of office space.”
Riley says Stanza’s offerings are different from traditional coworking spaces. With coworking, there’s often an emphasis on community and amenities, things like a barista, a theater room and events. The typical listings on Stanza include single offices and conference rooms within a company’s larger space.
Riley says the idea sprang from his own pandemic woes when he needed a break from the work-from-home grind. As he looked for a temporary space, he found that companies had private offices available here and there. It sparked the idea, and he sees Stanza as part of the overall solution to how hybrid workplaces impact commercial real estate and how we work.
“Generally, we recognize that it’s hard to say that anyone knows the right answer [for the optimal workplace model],” Riley says. “That’s why we need options.”
DeHaan concurs, saying it’s not a one-size-fits-all situation. “It’s a fascinating time, really interesting to work through it with our customers as they find what works for them,” DeHaan says.