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News & Insights

What does hybrid and flex work look like and how does it impact office space?

  • August 17, 2021
News & Insights

What does hybrid and flex work look like and how does it impact office space?

  • August 17, 2021
Pandemic imperatives ultimately led to increased empowerment for office employees, with hybrid and flex work giving them more choices — and companies more to consider.

The pandemic in 2020 brought sudden revolution, followed by extended reevaluation of how people use the office workplace and, in general, conduct business together. The resulting work from home (WFH) movement was called “the largest social experiment of all time” by one commercial real estate professional.

While flex space and time were already business realities before COVID-19, flex work has come to the forefront as companies not only strive to retain personnel and provide them the best opportunity to succeed, but also ensure they’ll have the safest environment in which to work.

What Employees Want

Americans’ embrace of personal autonomy translates into the desire for convenience and flexibility in their day-to-day lives. Those values carry even greater importance when it comes to people’s health and work, which have driven the office paradigm shift of the last year. The pandemic has added substantial gravitas to a U.S. economy where hiring employers already spend an average of $4,129 per job, according to the Society for Human Resource Management, and billions annually in recruitment.

Employers will do what it takes to keep employees; office owners will do the same to retain tenants. Hybrid, flex work, and flexible office space have the potential to serve those ends.

More than four-fifths of workers said they either don’t want to return to the office or prefer a hybrid or flex work schedule, one where they commute into the office for part of the week and spend the rest of it at home, according to a Harvard Business School survey of nearly 1,500 professionals who worked remotely during the COVID-19 shutdown from March 2020 to March 2021. A recently released LinkedIn study found that 56 percent of workers prefer a hybrid working model, while 31 percent favor the fully remote approach and 13 percent wish to be fully onsite.

As Premier Office Magazine reported, office space is far from the frontier, but in 2020 it seemed like new territory all over again, with COVID-19 forcing property owners to reconsider and overhaul everything from work and common areas to traffic and air flow. Half of global companies plan major redesigns to their office space this year, according to Steelcase, a Michigan-based office furniture company.

Say goodbye to cubicle farms: the traditional 70-percent allocation of space to desks and offices “needs to be fundamentally challenged,” according to McKinsey. They’ll be replaced by spacious, interactive areas, more natural lighting and increased access to the outdoors.

While workers prefer flex-scheduling, they still want private, dedicated work spaces when they’re in the office. Privacy booths and small offices that can be booked by the hour could serve that purpose, according to a Perkins&Will interior designer, who added that the open floor plan should stick around. Comfort is key – after all, offices are now competing with people’s homes – so expect companies to take a page out of the hospitality sector’s book, including even mood music and “scent technology.” 

The Benefits of Flex Workspace and Schedules

What about companies and operations that require more collaboration? And, how about professionals that benefit and grow from the personal engagement of individual coaching and teamwork? The hybrid, flex work approach may offer the best of both worlds. Employees can feed their social needs with direct office interaction and team collaboration, but can also tend to health and wellness, caregiving and other priorities that often languish in inflexible work environments.

Flex working for employees could also mean more flexible costs for companies. Corporate leasing of flexible workspace increased 73 percent in the first half of 2021 on a year-over-year basis, according to Cushman and Wakefield. The 31,538 flex seats leased during that time equate to nearly 87 percent of the total seats reserved during all of 2020. Given the lingering uncertainties about COVID-19, including the Delta variant, flexibility with regard to cost optimization is critical for many companies.

While deciding who works in the office — and how often — will take some time, the above personal and organizational benefits explain why 72 percent of corporate leaders plan to offer a hybrid model and only 13 percent say they expect to decrease their real estate footprint in the next year. In addition to serving the needs and preferences of their personnel, organizations can use the hybrid model to lower costs and strengthen organizational performance.

The office sector is poised for a rebound as market drivers are pointing toward stabilization, JLL reported after the second quarter of 2021. “Although subdued and still challenged by delayed office re-entry and uncertain long-term space planning, office market indicators provided glimpses of the beginnings of a resurgence in Q2 2021: leasing improved meaningfully for the first time since the onset of the pandemic, while occupancy losses slowed and many tenants elected to withdraw space previously placed on the sublease market,” according to the global commercial real estate services company. At mid-year, CBRE reported that most office-using sectors are now on par with pre-pandemic employment levels with office jobs increasing by 71,000 in June.

Safety first, it’s often been said, as has the traditional line “our most important resource is our people.” Companies regularly demonstrate the latter with their major investment in talent recruitment and retention, and they certainly backed both beliefs up during the pandemic. Now with the increasing commitment to hybrid, flex work and workspace, they’re elevating both employees’ professional and physical space. It’s business as usual no more in 2021, and in many ways that’s significant progress.

Learn more about how KBS is helping tenants return to office, click here.

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Industry Trends

Underwriting the Perceived Instability of Short-Term Office Leases

  • February 16, 2021
The threat of shorter office lease terms has been looming over the commercial real estate industry for several years. Companies first braced for the potential impact of new standards from the International Accounting Standards Board (IASB) recognizing all leases on the balance sheet, which took effect in January 2019. Then, the office leasing world was hit with additional challenges from COVID-19 as many companies opted to work from home and re-evaluated the role of their physical office space.
Industry Trends Insights

Envisioning the Future of the Built Environment

  • January 29, 2021
Amidst the ongoing crisis, built environments are at the front lines of change and will play a huge role in creating a more resilient world going forward. Office architects are re-envisioning the future of the workplace—where and how we work. Unfortunately, there is no crystal ball to predict exactly what the new future-oriented office will look like, but what we do know is flexibility and adaptability will be key in resilient design.
Industry Trends

Why Texas is becoming a commercial real estate powerhouse

  • January 21, 2021
It looks like 2021 will be another big year for Texas, a year when a lot of major companies will make the jump and move to the Lone Star state. Just look at these transitions:
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