Most global cities are taking a long time to recover their pre-pandemic vibrancy, and that’s in large part to ongoing low utilization of corporate office space. As shared in ManpowerGroup’s Age of Adaptability research, organizations are experiencing a culture revolution in which the traditional office environment takes a back seat to more dynamic, flexible places of work.
Leaders accustomed to rigid, in-person workplaces and schedules may wish for the world to return to the way it was (hence the return-to-office or RTO wars), but workforce futurists believe that ongoing societal disruptions and employee pushback are likely to change the model permanently.
Let’s examine what’s happening and why, and how the question of the future of workspace is likely to be answered in the end.
The State of Office Space in 2025
Pervasive corporate office vacancies speak for themselves. And according to CBRE’s Office Occupier Sentiment survey, more than half of executives anticipate further reductions of their office footprints to trim unoccupied space, with most executing this upon lease expirations that will occur within the next few years. Similarly, Altus Group found that the cumulative volume of 2023 office transactions was 43% below 2020 levels, and 57% below the 10-year average over the same period.
In a conversation I had with Brad Serot, vice chairman at commercial real estate consultancy CBRE, I learned that many organizations are still committed to an office-centric approach. But a majority of CBRE’s survey respondents are seeking flexibility in lease agreements, including more latitude to expand or contract their total space, and shared building services and amenities.
The research picked up on a trend toward “flight to quality,” in which organizations are relocating to newer and more desirable buildings – of which there’s a limited supply. The highest-performing options today combine walkability as well as housing and high-end experiential retail.
Serot said that rather than just telling their workforces how things will be, smart leaders work alongside employees to design spaces that provide the appropriate structure and technology support based on geographic, industry, and company-specific norms as well as employee choice.
This model works best when each corporate-sponsored physical office has a designated purpose – such as hosting in-person meetings, offering individual employee hoteling space, or placing team members on the same schedule in a neighborhood-type environment.
International Workplace Group CEO & Founder Mark Dixon himself described modern office space planning as a “hub and spoke model, with smaller central offices, more regional hubs, and growing numbers of local satellite offices.” He said that the concept of the 15-minute city – the idea that any place a person would need to go would be within a 15-minute walk or bike ride of one’s home – saves time, is good for individuals’ health, and fosters community.
The Rise of Third Places
I’ve been working in coffee shops since 2005. Once upon a time, I was the only person with a laptop in the store. Now, the preference to work at coffee places is so pervasive that some have had to implement “no laptop” policies to keep their establishments from being turned into mini-offices.
In sociology, the third place refers to social surroundings that are separate from the two usual social environments of home and the workplace. Third places require either direct or indirect social interaction with other people and are also defined by the fact that no one is forcing you to be there. Besides coffee shops, popular third places for remote and hybrid workers include libraries, clubhouses, and conference centers. Coworking spaces like WeWork and Regus are good examples of businesses built on the premise of the third place.
Some employees find third places desirable because they boost motivation and productivity, may have fewer distractions, and may also encourage them to get out of the house and look presentable. And given their popularity, leaders need to weigh whether it’s better for remote and hybrid employees to work in an independent third place or in the aforementioned regional hubs or local satellite offices.
Certainly, thorny issues like skill-building, confidentiality, privacy, and data security are easier to solve when an employee is working under a company-sponsored roof. Company-sponsored workspaces that are close to home may also boost connection and relationship building because one can see coworkers in person while working at the same location.
For the rest of the piece, check out the ManpowerGroup full blog series.
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