Office occupancy rates reach post-pandemic highs in Europe and the USA

In the last week of January 2023 - and for the first time since Covid broke out - average occupancy rates in office spaces in 10 major U.S. cities reached 50.4% of their pre-pandemic levels.

This recovery was the first time office occupancy hit more than 50% since March 2020, according to a survey of 10 of the largest U.S. cities, including N.Y. City, Washington DC, L.A., San Francisco and Chicago.

In Europe, UK office occupancy in January reached a new high, recording a national average occupancy of 34.3% - the highest figure since May 2021. In London, the Dockland experienced a weekly average occupancy rate of 49.4.

In Spain, the occupancy of rental offices in Madrid and Barcelona got out in 2022 by an average of 45%. However, on Tuesdays, Wednesdays and Thursdays, the average occupancy amounted to 75%, with office spaces practically empty on Mondays and Fridays. 

Back to normal

In January, Disney employees received a memo from CEO Bob Iger clarifying that now, the company was reversing course, mandating a four-day return to office beginning in March.

“Creativity is the heart and soul of who we are and what we do at Disney. In a creative business like ours, nothing can replace the ability to connect, observe, and create with peers from being physically together, nor the opportunity to grow professionally by learning from leaders and mentors.”

As countries have returned to normalcy due to declining Covid-19 rates, companies have instituted requirements for employees to work in their offices for the workweek entirely or most of the working hours.                                                          Photos: iStock

At the pandemic onset, office employees overwhelmingly shifted to working virtually in early 2020 but have gradually shifted back toward in-person work as normal activities resumed and the effects of the pandemic lessened.

As countries have returned to normalcy due to declining Covid-19 rates, several large companies have instituted strict requirements for employees to work in an office for the entire workweek or most of the working hours.

An empty party

"The recent year, I have visited quite a few offices due to my network, and it strikes me how sickening it is with half-empty premises. Large offices geared for growth, and then there are people sitting in every fourth seat trying to create an atmosphere.

It is just so hard to create an atmosphere for the party when you have rented a large hall, and only your closest friends have turned up," a Danish senior executive, Kasper Heumann Kristensen, says.

"It is not exactly something that contributes to company culture or attracts employees other than those who also want to work isolated from home. If I got an interview at such an office, I would immediately lose all desire for employment."

It is hard to create an atmosphere for the party when you've rented a large hall, and only your closest friends have turned up.

"The informal and unplanned interactions between employees often create the relationships that later develop into actual sparring and development. In our eagerness for flexibility and better balance, we focus too much on the short-term benefits of homeworking.

We have to take care of the long-term disadvantages and ensure that our offices are attractive and developing places to come. Or we risk creating cultureless and relationship-poor companies without culture and DNA," the manager warns.

Not a priority

According to a recent survey of more than 1,100 executives conducted by the business think tank the Conference Board, only a smaller fraction of CEOs say asking their workers to return to a physical office is a priority in 2023.

Only 5% of US CEOs listed a return to in-person work as a priority for this year, instead focusing on other employee-related initiatives like strengthening internal culture. In Europe, only 2% of CEOs said the same.

According to a recent study, almost three-quarters of the Scandinavian respondents believe their company runs more innovative with the employees working from their physical offices.

A new study from the international software giant VMware shows that almost three-quarters (72%) of the Scandinavian respondents believe that their company is more innovative when the employees work from their physical offices.

But at the same time, 79% state that they feel more satisfied if they can choose where to work. Where employees feel most innovative is not necessarily where they prefer to work ...  ●
 

Read more:
BBC.com: The companies backtracking on flexible work
Nypost.com: Manhattan’s office occupancy shows signs of recovery
Money.com: Returning workers to the office isn't a 2023 priority for most CEOs
Vmware.com: When innovation and job satisfaction compete