There are a number of companies who began to use a hybrid model for work ‘before it was cool’.
However, the trend toward a more flexible way of working gained incredible traction with the advent of the Covid-19 pandemic. As companies and individual employees realized, work can be done productively at home. In fact, working from home mitigated a number of stressors, such as commuting. But, one thing was missing, real-life human interaction!
With the pandemic partially under control, many of us look forward to returning to work and connecting again with colleagues and friends. Hybrid work provides this opportunity, while also offering a list of benefits, such as saving costs.
A well-structured hybrid work model, one that is coordinated using workplace technology, can save organizations up to 30% on office costs! We will take a closer look at the costs of modern offices, how the pandemic has impacted the role of traditional workplaces, the opportunities arising from the new way of working, and how choosing a well-organized flexible work model can help you save on your office costs.
Hybrid work today
Flexible models significantly impact overall office space and design because they change how we view the office and its role. The office is no longer a place to simply get work done. It is now a place to build relationships and connect with colleagues socially. Research has shown that individuals are more productive when working remotely. This is because social distractions are kept at bay. However, while this isolation leads to productivity, it means that when employees come into the office they need the space to work with their teams for fruitful collaboration. This changes the way we look at office design because it means we want to build offices conducive to socialization, such as McKinsey’s new office in Mumbai, India.
Office design for the future of work needs to be intentional, as in-depth research by HSM advisory suggests. This means creating spaces that foster productivity and collaboration. Design has the power to bring people together.
The global pandemic accelerated our transition to the future of work. So, what is the current situation and what are employees’ expectations for upcoming years?
We are seeing trends away from traditional office environments. According to Gartner’s latest research, by 2023, less than one-third of digital workers will select the corporate office as their preferred workplace.While meeting with colleagues in person is a priority for many, the role of the office is shifting. Recently, it has become more than a place to get things done. Instead, it also serves a social function. The office is where people can meet, connect and collaborate. This also presents an opportunity to rethink what type of office spaces are needed, and in turn, reduce costs.
Additionally, due to the nature of hybrid work, with employees on different teams coming to the office on different days, desks can be alternated between people. By 2023, the percentage of employees in shared seating will increase to over 40%, according to Gartner.
Hypothetically, suppose only half of the workforce comes in each day. In that case, the same desks can be shared, reducing the need for larger office space as fewer people would need to be accommodated daily.
By 2030, 48% of employees will work remotely, compared to 30% before the COVID-19 pandemic (Gartner). The trend towards remote and hybrid work is ever growing, so it is crucial that we adapt by better understanding the needs of such an environment and how we can optimize it.
For example, efficient use of office space will require central coordination. While hybrid work presents this opportunity, it is in the hands of office leaders to organize efforts to produce the happiest, most productive employees.
By 2022, 60% of workers will prioritize a wellness-equipped smart office over a remote office (Gartner). To implement hybrid work trends, we need to equip offices with the right technology to coordinate remote and in-office employees.
Collaboration has always been at the center of work, but hybrid workforces require more sophisticated tools and spaces to foster it. Workplace innovations are popping up left and right to solve a host of hybrid work issues as well as optimize office space usage for the most cost efficient systems.
Save costs by implementing a hybrid work model
Along with a variety of different benefits, the hybrid model can help your business save costs.
First, let’s define the costs related to running an office pre-Covid, for a 1000sqm office space in Germany. Using research, we are assuming that each employee would need 8sqm, that each sqm costs 25€, and that the ideal desk ratio is 1. In other words, each person who comes to the office will have a desk, which is determined by the number of remote days the organization is providing. We applied a buffer for peak days, when more people come to the office. It is also important to note that in cities like New York and San Francisco, these sqm-prices are 5 to 6 times greater, meaning that savings would also be even more significant.
These numbers are based off the soon to be released deskbird hybrid office saving calculator.
Beginning with property costs, this includes leasing, rent & management costs, such as parking. These costs add up to an approximate average of €30,000:
€24,000 for leasing costs and
€6,000 for ancillary costs.
Historically, ancillary costs were around 15% but with rising energy prices, there has been a 50% increase in electricity and a 150% increase in gas, leading to an overall 20% increase in ancillary costs, as research by JLL reveals.
Ancillary costs can be broken down into 4 categories and the potential savings are as follows:
Using a hybrid model reduces these costs partly because fewer employees need to come in every day, so less space is needed. With workplace management software, data is collected to measure how many employees are actually coming into the office. By assessing space utilization, you can determine if certain areas can be repurposed or if desk areas can be turned into meeting rooms.
We can create smart cleaning offices using workplace technology, which allocates cleaning resources based on how many people actually use the office, along with paying for space and facility management costs, including cleaning.
Running an office also has energy costs such as HVAC and lighting which cost around 4,000 €/a. As fewer people come into the office, less space and energy are required, and these costs can be offset. Companies can also choose to temporarily shut off to save costs if they know more about future occupancy. For example, if not in use, facility managers can choose to shut down a floor in the office for that day. Therefore, using the right technology can provide a more immediate impact on cost savings.
Businesses also incur IT costs, such as cybersecurity and cloud services. However, these technologies help facilitate the hybrid model and save costs in the long run. The initial investment in productivity software has great returns over time.
Some companies also choose to subsidize commutes. If employees are working remotely, this cost no longer applies. And, if some employees choose to come into the office a few times per week, the companies will have fewer costs to subsidize.
There are also a number of costs that may be overlooked when running an office, such as having a cafeteria for your employees or stationary and utilities.
To manage all of these costs deskbird has collected data interviewing customers and hybrid work experts to help compute your potential office cost savings when switching to a hybrid model with deskbird.
For example, a multi-national company with 8,000 people introduced hybrid work, but continued running facilities at pre-pandemic levels. But, after data provided evidence of low occupancy across all facilities, they closed 4 of the 5 sites on Fridays. This led to 90,000€ in savings per month.
While cost data can be collected on spreadsheets, manually inputting all of this information will take time. deskbird is the perfect solution to increase efficiency and reduce costs by collecting office usage data, helping to automate the collection and analysis of cost data.
The benefits of well-organized hybrid work
So we mentioned that there are many benefits of well-organized hybrid work aside from helping save costs. Let’s explore some of them!
Hybrid work, by nature, is flexible: that is what makes it appealing to many people. Choosing where to work gives each individual the autonomy to design their workday in a way that best serves them. Whether this means working from their home office, from a new country, or from a traditional office, hybrid gives employees the choice to choose all or none of these!
While a flexible office saves costs for organizations, it also saves costs for employees, most pertinently transportation costs. With gas prices rising and public transportation costs adding up overtime, skipping the commute to the office can save a substantial amount of money. Additionally, avoiding a traffic jam or late train reduces the stress of daily commuting.
From a work culture standpoint, hybrid models are also great for ensuring work-life balance. The additional time saved from commuting and the ability to work from anywhere give individuals the opportunity to spend more time doing hobbies, exercising and fulfilling their family duties without additional stress.
With all of this said, it is easy to understand why hybrid work models would then lead to increased employee satisfaction and a reduction in attrition. Having a work-life balance, flexibility, and trust will make employees happier, more satisfied with their jobs, and less likely to leave their company.
Hybrid work models have also been shown to increase productivity. On average, fully remote workers are 47% more productive than their counterparts working from the office every day of the week. Our research shows that well-coordinated hybrid work, such as using a workplace management system, can win your employees up to a day of productivity, each week.
It is safe to say that the office's role is changing as we explore different models to structure work, such as hybrid. And these shifts also allow us to reassess workplace costs, helping to save on resources and space we might not have working from the office every day. From reducing the amount of energy usage and maintenance costs, hybrid offices can greatly benefit from workplace technology. With coordinated hybrid work, there is an immediate impact as data from a workplace management platform provides real-time feedback.
Optimize your office space and reduce costs today with deskbird: request a free demo and discover how you can easily manage a hybrid workspace without spending a fortune!