Why Businesses are Rethinking Office Space Requirements Now

Company perspective when it comes to office space has changed drastically in the past few years. What once was a simple calculation of employees x desks x square footage now has become incredibly complex. It’s not just a matter of “how much space do we need?” anymore. It’s become more question of “what space do we need, and why?”

Sure, this pertains to remote work – and no remote work – but it also pertains to how people work and what people expect out of a work experience.

That’s Why the Basic Formula Doesn’t Work

For decades, the formula was simple. Estimate the number of employees over the next few years, add a few thousand square feet for growth and a conference room or two and sign a lease for the desired space. Everyone gets their own desks and everything is hunky dory.

But most people work 9 to 5, Monday through Friday, in their assigned offices and at their assigned desks. Except that’s not true – it’s not true yet most people sign 5-10 year leases. So now companies are stuck trying to find a happy medium to not be paying for space that they’re not using – and others are stuck with so much space, paying for square footage they cannot fill.

What’s Important Now

Research shows that companies use spaces differently than intended more often than not. A corner office with a window goes mostly unused as the occupant is at meetings, on calls or traveling most of the week. A row of desks gets an occupant one day a week while their colleague sits a few cubicles down 4 days a week yet neither is ever in at the same time.

What’s valued is collaborative space for collaborative efforts, private space for focused work/calls and rooms for actual meetings (not where everyone’s staring on Zoom). Square footage now accounts for types of activities needing physical space, not just seats per person.

Companies looking at markets like commercial real estate Singapore are finding that modern office buildings increasingly cater to this flexibility, with layouts that can adapt to different work styles rather than rigid floor plans filled with cubicles.

It’s Expensive

Real estate is expensive. For any company budget, it’s one of the biggest line items. Thus, when companies realize that they are better off keeping productivity down with less defined physical space and functioning seamlessly from home, office space becomes easier to understand.

But it’s not just the costs; companies are spending more money per square foot of usable space per person. They’re spending less on generic space up front that is only utilized at max capacity 20 percent of the time for 80 percent of the cost and they’re spending more per foot for quality spaces for specific reasons.

This creates a problem when planning because a smaller space in a trendy area ends up costing the same price (or less) than a larger space in an offbeat area. Yet the smaller space could better function if made for purpose.

What People Expect

When everyone was forced to go into an office, there was little to no employee suggestion for what was expected out of the space. When it was required, it just needed to be functional.

Now that it’s optional, and perceived optional (at times), employees want more access to an office than just an office door.

Natural light, quality coffee options, spaces that don’t smell like 1997 but also are not more expensive than homes per office because “offices don’t have to be cubical at all.” It’s not unreasonable – anyone would want their space to be comfortable – but gone are the days where “a space is a space.”

More than ever, the commute matters. If someone’s only coming in two or three days a week, they may be tolerant of commuting multiple hours if their chosen employer is that good. But if it’s not worth the effort to come into a space a couple of days per week it’s going to be difficult to get someone in at all – and if the living arrangement is far away from where they work or suckers them into a bad deal, it’s going to complicate matters.

Flexibility is Critical

What companies want most from spaces today is flexibility – not “we might grow by 20% next year” but “we may change day-to-day.”

Some companies have turned to shorter leases for excess per month – even though it’s more exorbitant per month – while others rent additional squares when necessary. Serviced offices – which once were for companies looking for cheap spaces while on their way up – have now become legitimate options for established companies who need offices on an as-needed basis.

If businesses aren’t entirely certain they will need something permanent two years down the line, why commit? If businesses are expanding into other markets where they aren’t sure what they need, they need some semblance of flexibility – especially without breaking leases.

Where You Put It Matters

No longer does it just matter where spaces go based on vicinity to clients, hot spots or genre locations; it now matters where actual employees live and how they want to work.

Some companies have started smaller, secondary offices in suburban locations instead of one large block downtown headquarters. Others have retrofitted downtown locations because only three days a week of on-site work need people to come into exciting locations that are worth traveling for given that they’re only going 1-3 times a week.

Now variables come into play based on needing to take public transport more often because employees actually HAVE to make the decision to come in; walking distance from restaurants and services mean more because the office isn’t just an office but needs to serve as a destination worth traveling toward.

It Doesn’t Have To Be Fancy

It’s not about having fancy spaces – glitzy offices and crazy remote policies – and it’s not about pretending this will get everyone through appealing aesthetics. It’s about looking at what’s actually functional – and how teams work – and what requires physical activity versus what’s required through hybrid approaches.

It’s possible footprints will be smaller across the board or it’s possible footprints may stay the same but configured differently altogether. It’s definitely clear that far more will go into design and now more will be taken into consideration when things change along the way.

At the end of the day, companies that do this right understand office space as a tool for specific purposed rather than as a requirement because that’s how they’ve shifted their mentality away from “we need an office” to “we need space” as the biggest change of all.