Every morning, business news channels are crowing about how employees return to the office. Is that what is happening, or is it just a convenient myth – or a good hook for page views? With the pandemic in our rear-view mirror, understanding the real trends behind Return to Office (RTO) is more important than ever. Drawing on the latest data from office buildings across the U.S., we can better understand the current landscape of workplace occupancy and strategies. Let’s uncover some surprising insights from Cohesion’s quarterly operations report for Q1 and see what they mean and what we can glean about the near future of your office.
Cohesion’s quarterly reports draw on data sources from smart buildings all over the country, giving us a live, real-time glance at what employees are doing. We can match that against historic trends for additional context and even use our OccupancyAI technology to forecast occupancy rates for the near future.
Occupancy Rates: The Heartbeat of RTO Trends
In the first quarter of 2024, the Cohesion Portfolio reported an average blended weekday occupancy rate of 31%. This figure, which considers both office vacancies and RTO policies, reflects the current state of workplace dynamics. While 31% might appear modest, it's crucial to note the context that shapes the broader trend patterns.
Weekday Patterns and Mid-Week Surge
A more granular look reveals that overall daily occupancy increased by 6% quarter-over-quarter (QoQ), with a noticeable peak in occupancy from Tuesday to Thursday. This mid-week surge suggests the growing preference of workers for hybrid work models, where employees split their time between the office and their homes or remote locations. The consistent increase in occupancy rates during these core days indicates a progressive return to physical office spaces, aligning with the hybrid work trend.
Industry-Specific Occupancy Insights
Diving deeper into industry-specific trends provides a more nuanced understanding:
Finance: This sector has maintained stable occupancy rates, signaling a steady commitment to office presence – and success executing it.
Consulting, Real Estate, and Healthcare: These industries have shown a downward trend in maximum occupancy, suggesting a more cautious or flexible approach to RTO.
These insights highlight that while RTO is on the rise in certain sectors of the workforce, it is not at all a uniform trend across all major industries.
Amenity Utilization: A Complement to RTO
Another critical aspect of the RTO discussion is amenity utilization. Our data shows an 11% QoQ increase in amenity utilization, with 21% of tenant companies actively using the amenities. This uptick underscores a growing demand for in-building services and facilities, which are key drivers for encouraging employees to return to the office.
Physical Amenities: Large event spaces lead in utilization rates, providing essential venues for team gatherings and corporate events, key to re-building relationships that languished as we worked from home.
Digital Amenities: Interestingly, 62% of tenants utilize digital amenities like smart building apps, indicating a strong preference for tech-enabled services that enhance the in-office experience with the same ease of use of the consumer apps they use every day.
Maintenance Requests: Reflecting Increased Activity
The 17% increase in maintenance requests, averaging 2.7 work orders per weekday per building, is another telling indicator. This rise in operational support needs reflects the increased activity and presence within the office buildings, further suggesting that more employees are returning to work on-site and just by their presence the needs for greater facilities management and maintenance increases.
Opportunities for Space Rationalization
The average weekday occupancy rate of 31% indicates that while a significant portion of employees are returning to their offices, there still remains a considerable amount of vacant space. This opens opportunities for strategic space rationalization—rethinking how office spaces can be designed and utilized to optimize efficiency and enhance the employee experience. By converting underutilized spaces into collaborative zones, wellness areas, or flexible workstations, building owners can better meet the evolving needs of tenants.
Capitalizing on Amenity Trends
The rise in amenity utilization by 11% QoQ signals a growing demand for in-building services. As 21% of tenant companies actively use these amenities, it becomes essential to enhance and diversify the services offered. From fitness centers & accessible parking to collaborative workspaces, creating environments that cater to evolving employee needs can boost satisfaction and retention. Investing in amenities that promote health, wellness, and collaboration will make the office a more attractive destination for employees and gets them back in the office.
Ensuring Operational Excellence
With an average of 2.7 work orders per weekday per building and a 17% increase in maintenance requests, it's evident that robust maintenance and operational support are crucial. By addressing maintenance needs promptly and efficiently, building owners can ensure smooth daily operations and high tenant satisfaction. This proactive approach to maintenance will also help in identifying potential issues before they escalate, ensuring a safe and comfortable environment for tenants while optimizing costs.
Conclusion
So, is RTO actually on the rise? The data from our 2024 Q1 analysis suggests a nuanced yes. While the overall occupancy rate stands at 31%, the 6% increase in daily occupancy, the mid-week surge, and the rise in amenity utilization and maintenance requests all point towards a gradual but noticeable return to the office. This trend is more pronounced in certain industries, particularly finance, while others are adopting a more flexible approach.
It's time to leverage these insights to make informed decisions to enhance tenant satisfaction, optimize space utilization, and foster a conducive environment that supports both in-office and hybrid work models. Read more in our Q1 2024 Portfolio Operations Report.
To learn more about how Cohesion leverages data-driven insights to enhance workplace experiences and support your return-to-office strategies, Book a Demo now!
