For many of us, the COVID-19 pandemic fundamentally reshaped our working lives, and some of the most dramatic changes occurred within the walls of commercial offices.
Our team at Meyer works with companies across the country and delivers workplace solutions in dozens of offices every day. Through this daily work, we’ve been in a unique position to observe this transformation firsthand.
In this article, we’ll explore three key trends that are defining the post-COVID office landscape, all fueled by the rise of hybrid work, and share some insights from companies who are thriving in this new world.
Trend 1: Hybrid Was Here Pre-COVID, But Now It’s Here to Stay
Hybrid work wasn’t a new concept pre-pandemic. However, COVID-19 served as a powerful accelerant. With lockdowns and social distancing mandates, companies were forced to pivot quickly. Fortunately for the U.S. economy and most domestic companies, the infrastructure for hybrid work – cloud computing, high-speed internet, and collaborative software – was already in place and had become much more cost-effective in recent years. In fact, even before the pandemic, many companies were moving towards hybrid for key functions, like call centers and software development, already operated with a degree of hybridity.
In a recent conversation, Eric Stang, President of the Integrated Relocation Management division of the Office Moving Alliance (OMA) shared his experience which exemplified this shift during his 20+ years at commercial real estate giant CBRE. “Seven years ago, when one of our leases was up, we updated our space and transitioned from hierarchical offices to ‘industry neighborhoods’ with unassigned seating” he stated. “This fostered collaboration when we were physically in the office.”
And like CBRE, many other leading companies were making substantial moves toward hybrid work pre-COVID, too. Leading health insurer Aetna was experimenting with a hybrid work model 10+ years ago, and an entire wing of its headquarters building in Hartford had “gone dark” as hundreds of employees worked remotely.
When COVID hit, it forced many companies to pivot quickly, accelerating a transformation that likely would have taken years to be realized into just a few days, and revealing the effectiveness of remote work models.
In fact, as a recent McKinsey report suggests, some version of hybrid work is here for good. Similarly, as Bill Clegg, Project Manager at JLC Interiors and former VP of Operations at Diversified Project Management succinctly put it, “There will always be a hybrid model moving forward – I don’t see this ever going away.”
The benefits are undeniable. Hybrid work reduces unnecessary business travel and gives employees more control over their work-life schedule.
Trend 2: Hybrid Requires Less Space – Nearly Universal Downsizing
The rise of hybrid work translates directly into a need for less physical office space. As Stang shared, “We haven’t moved a client to more square footage in the last 5-7 years.”
In fact, Meyer’s decommissioning services, have never been busier than the past few years.
This trend wasn’t entirely COVID-driven. Even before the pandemic, workspaces were underutilized – some studies show desks were only occupied for 38.4 minutes out of an 8-hour workday!
ConnectiCare, a health insurer based in Farmington, CT exemplifies this downsizing. They recently consolidated from two buildings to one, returning a substantial 65,000 square foot space to the landlord.
But downsizing doesn’t necessarily translate to linear savings. While reducing the square footage of an office obviously lowers the rent, many forward-thinking organizations are reinvesting some of these savings in updated furniture and technology to support increased flexibility within their remaining office space. As Stang added, “Leading companies aren’t just looking at this as a real estate reduction play, they’re looking to create offices that will help people become more productive and enhance peer-to-peer learning.”
Landlords, too, are feeling the pressure. Foreclosure rates in Connecticut and other regions have increased, and some tenants, like Shipman & Goodwin (Connecticut’s largest law firm and a long-term Meyer client) are even suing their landlord over lingering maintenance issues brought on by the landlord’s cashflow challenges.
Trend 3: Hybrid Model Impacts Facility Layout & Incentivizes
Return-To-Office
To support hybrid teams and, at the same time, incentivize employees to come into the workplace, next-generation offices are being substantially redesigned. Hoteling, where employees don’t have dedicated desks, has become increasingly popular. One law firm recently reduced their dedicated offices from 60+ to 20 upon lease renewal by utilizing the hoteling concept.
Flexible spaces, including huddle rooms ideal for hybrid meetings, are also on the rise. “We’re moving away from rigid layouts,” shared design expert Bill Clegg, “opting for multi-functional spaces that can be easily reconfigured for various needs.”
Offices are also adding amenities to entice employees back to the office. Food service, gyms, and comfortable social spaces are becoming commonplace, creating a more
“resi-mercial” (residential and commercial) atmosphere. Very close to home, Meyer recently renovated and refreshed their own headquarters design to create a more welcoming, energizing and modern environment for both employees and visitors.
Similarly, as Doug Hollingshead, President of OMA, observed, the labor market remains tight and competing for talent is critical to business success. Employees want to work “in fun, vibrant offices, with collaboration spaces integrated into their design,” so making the workplace attractive also enhances recruiting and retention efforts.
The Future is Unwritten, But Hybrid is Here
The future of the office remains uncertain. The work world continues to navigate an unprecedented situation with an unpredictable trajectory. With a weakening labor market, particularly in the tech sector, there are indications of change on the horizon. Amazon’s recent return to office mandate, which will be implemented on January 1st, 2025, may be a harbinger of a broader move by some employers to bring employees back. However, we don’t foresee the market heading towards a fully in-office world again. One thing is clear, hybrid work is here to stay.
Companies with long-term leases or owned facilities need to get creative with design and space utilization. For those with expiring leases, organizations like Meyer can help you navigate your next steps.
By embracing the hybrid model and transforming your office space, you can create a work environment that thrives in the post-COVID era.
