noOnce pioneers of workplace innovation, North American tech workplaces are still catching up to new work patterns, according to new research from Hassell and Density. Tech companies' offices experience average occupancy rates of no more than 34% during peak hours, wasting up to $40 million a year in rent on underutilized space.¹
The current state of the tech workplace The report, written by Dr. Daniel Davis, Head of Research at Hassell, and Annie Cosgrove, Director of Analytics at Density, examined 1.4 million square feet of workspace in the North American technology sector between May 2023 and May 2024, to understand the relationship between utilization, return to the workplace (RTO) policies and layout.
Key findings of the report include:
- Return to Work (RTO) policies are having less of an impact on office utilization than expected. Changing from a policy where employees can decide when they come into the office to a hybrid policy that requires employees to be in the office three days a week only increases peak daily utilization by 17% (from 29% to 46%), indicating that the hybrid RTO policy is not being fully enforced or respected.
- Employees who can decide where they work spend twice as much time in conference rooms when in the office compared to employees with a formal hybrid policy. For employees who have the choice, 48% of their time in the office is spent in conference rooms, compared to 29% for those who work three days a week and 23% for those who work two days a week. Given the choice, employees will come in to meet people.
- Tech companies are over-optimized for open-plan offices. All of the workplaces surveyed by Hassell and Density were open plan, with only a handful of private offices. These open spaces are not conducive to the video calling and hybrid meetings that are essential to new ways of working. As a result, conference rooms are forced to function not only as places for groups to collaborate, but also as quiet spaces for video calls and concentration. Conference rooms are used as private offices or phone booths 36% of the time.
“Tech companies have traditionally been leaders in the workplace,” says Dr. Davis. “Their amenity-rich offices have been the source of billion-dollar businesses and immense envy. Then the pandemic hit. Many companies quickly implemented hybrid or remote working. Now, some of those offices are underutilized and others are struggling to adapt to new work patterns.”
