The Return To Office Has Stalled. Here's What Is Next

Office building access and commuter ridership data suggest the return to the office has plateaued at about 50% of pre-pandemic levels. With 80% of employers offering hybrid work, employees are taking advantage of the newfound flexibility to choose where to work most days. 

The U.S. knowledge workforce is now visiting the office just three days a week, mostly driven by the need to collaborate and connect in person. As a result, the purpose of the office is being redefined, allowing employers to reinvent, reduce and outsource their workplace needs to support a distributed, digitally connected workforce.

“Trusted knowledge workers have fully embraced online collaboration tools that go well beyond just video meetings,” said John Arenas, chairman and CEO of Serendipity Labs, which serves as an outsourced flexible workplace provider to companies of all sizes across the U.S. and UK. “Managers can keep their teams continuously connected and projects measured and managed no matter where people are working.” 

Arenas said the office will remain important for in-person collaboration, shared experiences, mentoring and training, even if the daily ritual of commuting to the office is a thing of the past for most. He shared his observations with Bisnow on the changing nature of work and the workplace, as well as what’s next for tenants, knowledge workers and office building owners.

“The myth of needing to be in a central office every day to be productive has been busted,” Arenas said.

Access card data from Kastle Systems shows that office occupancy topped out at an average of 50% across 10 major U.S. metro areas in 2023. But that doesn’t tell the whole story, Arenas said. 

“What people often get wrong is that the Kastle visit data is stated as a percentage of January 2020 office visit levels,” he said. “According to a new CBRE report, The Math Behind Hybrid Work, pre-pandemic office show-up rates averaged only 70% due to travel, off-site meetings, vacations, sick leave and even occasional remote work days.” 

That means that office visits are actually at 50% of the 70% pre-pandemic level, resulting in utilization of only 35%, Arenas said, adding that the 35% figure might still be too high. 

“Given that office visits have become more focused on attending specific meetings and events — or just badging in to satisfy return-to-office mandates —  many office visits have become shorter, meaning actual utilization of the office each day is likely to be even lower,” he said.

The old office paradigm relied on proximity, paper and presence: Proximity was needed to enable the flow of any kind of information, paper documentation was the dominant means of communicating, and people tended to believe that workers’ presence in the office was a proxy for productivity. 

“The workforce is choosing to move away from total dependency on the infrastructure provided by the office, and now people actually choose to visit the office not as a default but when the office can provide specific value,” Arenas said. 

Businesses are looking for flexible solutions to address this trend that is changing the look of work. Arenas pointed to data from LiquidSpace’s Hybrid Workplace Index that corroborates the growth in the bookings of on-demand workspace from providers like Serendipity Labs. 

“Office space itself is not obsolete, but people’s expectations of how it should be used have changed profoundly,” Mark Gilbreath, CEO of global workplace sourcing platform LiquidSpace, told Bisnow. “Our data shows that companies and their employees are aligning on workplace flexibility and expect to be able to consume real estate services on demand, just as they do with other services like Airbnb and Uber.”

Businesses are taking advantage of the hybrid workplace paradigm to reduce office occupancy costs at headquarters facilities and outsource regional workplace requirements. When renewing their leases, tenants often reduce their footprints by 30% to 60%, Arenas said. 

CBRE reports that adopting a fully flexible hybrid schedule can reduce office space requirements by 20% compared to a policy of mandatory attendance three days a week, due to lower peak office utilization levels. 

However, giving employees autonomy requires high availability of tech-enabled meeting spaces, vibrant collaboration spaces and specially trained staff who can provide high service levels, Arenas said.

For most large company facilities, optimizing the workplace will mean reducing and reanimating spaces with new settings and service levels, he said. For smaller, regional facilities, tenants will be drawn to office buildings with “highly hosted” shared tenant amenities and flexible office and event space to augment their own premises. 

“It can also mean companies outsource part of their workplace needs to a trusted flexible office provider who can deliver the next-generation office across a network of locations, on demand and at a lower cost per worker than conventional office space,” Arenas said. “Augmenting a regional headquarters with access to a third-party network of flexible workplaces can also add agility and be a competitive advantage in attracting top talent.”

Office building owners faced with increasing competition to attract and retain tenants will also want to adapt to a world where many employers need to demonstrate what Gartner called “radical flexibility” in how they allow employees to work. This will drive the resurgence of flexible office and coworking offerings in partnership with flexible office providers that are equipped to deliver high service levels, compliant outsourced workplace standards, and welcoming and inspiring workplace experiences, Arenas said.

“The return to the office is complete, albeit at 50% of previous levels, but it’s not a return to the past,” he said. “The role of the office has been completely redefined, and the ways it will need to support the workforce have changed forever.”

This article was produced in collaboration between Serendipity Labs and Studio B. Bisnow news staff was not involved in the production of this content.

Studio B is Bisnow’s in-house content and design studio. To learn more about how Studio B can help your team, reach out to studio@bisnow.com.