The future of office space can create financial opportunities

For many organizations, the results of the pandemic-driven shift to remote work have been better than expected. Respondents to the January 2021 Fortune/Deloitte CEO Survey confirmed their October 2020 findings, indicating that remote working is here to stay: More than one-third of their employees will continue to work from home even a year from now. This has prompted leaders across industries to rethink where their employees work for the longer term—and how this could change their need for office space.

The October 2020 Fortune/Deloitte CEO Survey found that 76% of CEOs indicated that their organizations would need less space moving forward. This could drive significant cost savings in both operating costs and capital expenditures. Real estate and facilities are often one of an organization’s top three expenses; as a rule of thumb, they can represent 2% to 5% of organizational revenue.

The extent of the potential savings depends on several factors, including:

• Employers that continue to permit remote work will need to decide on the frequency with which employees need to be in the office, which will shape leadership decisions on how much space the organization needs.
• Historically, many organizations would open a physical location to attract new employees in a particular market. With the greater acceptance of remote working, organizations are now increasingly looking to attract talent in markets where they do not have physical space. The extent to which leaders seek talent in such markets will likely also influence the amount of space an organization must maintain.