A report by Hassell and Density reveals the challenges and opportunities for tech offices in the post-pandemic era.
Tech workplaces have long been seen as the pioneers of workplace innovation, but new research by Hassell and Density shows that they still have a lot of room for improvement. The report analysed a year’s worth of data from tech offices across North America and found that they are underutilised, over-optimised for open-plan layouts, and not aligned with the hybrid work preferences of employees.
Density Director of Analytics and report author Annie Cosgrove says: “This misalignment of space and work patterns doesn’t just result in empty chairs; it represents a significant drain on financial and environmental resources. Even in 2023, average annual rents for San Francisco-based tech companies exceeded US$8,000 per employee (CBRE). And buildings account for 39% of global CO2 emissions. As thought leaders in workplace design and culture, tech companies are positioned to solve these challenges that are plaguing workplaces across the world.”
The State of Tech Industry Workplaces offers actionable insights for businesses looking to optimize their workplace utilisation and design. By leveraging its findings, companies can:
- Implement innovative workplace designs that cater to the evolving needs of hybrid work models.
- Maximize space utilisation to reduce costs and environmental impact.
- Foster a culture of collaboration and adaptability by creating versatile work environments.
“Our aim with the publication of The State of Tech Industry Workplaces report is to trigger a shift in workplace design and utilization. Tech companies can thrive in the era of hybrid work through better design that minimizes workplace friction that frustrates employees and negatively impacts culture,” says Dr. Davis.
Key findings from the report
- The report found that the average peak utilisation of tech offices is only 34%, which means that up to US$40m in rent costs are wasted annually on unused space.
- The report also found that the return-to-office (RTO) policy of tech companies has a minimal impact on office utilisation. Switching from a policy that lets employees choose when to come in, to a mandatory three-day hybrid policy only increases peak daily utilisation by 17% (from 29% to 46%). This suggests that hybrid RTO policies are not being enforced or followed by employees.
- The report revealed that employees who have the choice of where to work spend twice as much time in meeting rooms when they are in the office compared to those with formal hybrid policies. 48% of in-office time for employees who have the choice is spent in meeting rooms vs. 29% of time for employees who have a three-day per week policy and 23% for those in-office two days per week. This indicates that employees come to the office mainly to meet people.
- The report also showed that tech offices are over-optimised for open-plan layouts, with only a few enclosed offices. These open spaces are not suitable for the video calls and hybrid meetings that are essential for the new work patterns. As a result, meeting rooms are not only used for group collaboration, but also as quiet spaces for video calls and focus work: 36% of the time meeting rooms are used as private offices or phone booths.
How tech workplaces can adapt to the new work patterns
The report suggests that tech workplaces need to rethink their design and strategy to better support the hybrid work preferences of their employees. Some of the recommendations from the report are:
- Provide more flexibility and choice for employees to decide when and where to work and communicate the benefits and expectations of the hybrid RTO policy.
- Design more diverse and adaptable spaces that can accommodate different types of work, such as video calls, hybrid meetings, focus work, and social interactions.
- Use data and analytics to understand the actual usage and performance of the office space and adjust the layout and amenities accordingly.
- Create a sense of community and culture in the office, and foster collaboration and innovation among employees.
By following these recommendations, tech workplaces can create more cool and effective office environments that can attract and retain talent, enhance productivity and creativity, and support the well-being and satisfaction of their employees.
