The state of tech industry workplaces

New research in partnership with workplace analytics leader Density reveals that North American tech workplaces, once the vanguard of workplace innovation, are still catching up to new work patterns. Download the report

With average peak utilisation not exceeding 34% in tech offices, up to US$40m in rent costs are wasted annually on underused space.*

The State of Tech Industry Workplaces research report examined a full year’s usage of tech workspaces to understand the relationships between utilisation, return-to-work (RTO) policies and layout in more than 130,000 sq metres. Among its key findings are:

  1. The impact of return to work (RTO) policy on office utilisation isn’t as significant as you’d expect. Going from a policy that lets employees decide when to come in, to a mandatory three-day, in-office hybrid policy only increases peak daily utilisation by 17% (from 29% to 46%). This suggests that hybrid RTO policies aren’t being fully enforced or respected.
  2. Employees who can decide where they work spend twice as much time in meeting rooms when they’re in the office compared to those with formal hybrid policies. 48% of in-office time for employees who get to choose is spent in meeting rooms vs. 29% of time for employees who have a three-day per week policy and 23% for those in-office two days per week. When given a choice, employees come in to meet people.
  3. Tech companies over-optimised for open-plan offices. Every workplace studied by Hassell and Density is open plan, with only a handful of enclosed offices. These open spaces don’t work for the video calls and hybrid meetings that are critical to new work patterns. As a result, meeting rooms aren’t just places for groups to collaborate, they’re also forced to function as quiet space for video calls and focus: 36% of the time meeting rooms are used as private offices or phone booths. 

The State of Tech Industry Workplaces research report by Hassell Head of Research Dr. Daniel Davis and Density Director of Analytics Annie Cosgrove uncovers that while tech companies have led the way in adopting new hybrid work policies, the industry’s workplace design has yet to catch up. 

Tech companies have traditionally been workplace leaders. Their amenity-rich offices nurtured billion-dollar businesses and untold envy. Then the pandemic happened. Many quickly adopted hybrid and remote work. Now, some of those offices sit underutilised while others struggle to accommodate new work patterns.”

Hassell Head of Research and report author Dr. Daniel Davis

This misalignment of space and work patterns doesn’t just result in empty chairs, it represents a significant drain on financial and environmental resources. Even in 2023, average annual rents for San Francisco-based tech companies exceeded $8,000 per employee (CBRE). And buildings account for 39% of global CO2 emissions. As thought leaders in workplace design and culture, tech companies are positioned to solve these challenges that are plaguing workplaces across the world,” says Density Director of Analytics and report author Annie Cosgrove.

The State of Tech Industry Workplaces offers actionable insights for businesses looking to optimize their workplace utilization and design. By leveraging its findings, companies can:

  • Implement innovative workplace designs that cater to the evolving needs of hybrid work models.
  • Maximise space utilisation to reduce costs and environmental impact.
  • Foster a culture of collaboration and adaptability by creating versatile work environments.

The State of Tech Industry Workplaces examines over 130,000 sq metres (1.4 million sq feet) of workspace in the tech sector in North America (we can’t share the names, but you probably know many of them). By combining office layout analysis with utilisation data collected from Density’s workplace sensors, the study paints an incredibly accurate picture of the modern tech workplace.

The report’s findings are founded in data accumulated between May 2023 to May 2024.

* up to US$40m in rent costs are wasted annually on underused space (based on a CBRE study of annual rents for tech companies in top U.S. metro areas).

Image credit, top: Computershare workplace, Melbourne, Australia, designed by Hassell is an innovative example of a new breed of tech workplace that maximises space utilisation. Photographer: Earl Carter.

For a copy of the full report, The State of Tech Industry Workplaces, register below to access now.