The global shift in work dynamics has transformed how people operate and redesigned workplace environments. It has reshaped the office landscape, compelling both employees and businesses to adapt to new challenges and opportunities. As employees reconfigured their lives around working remotely, they fully embraced the hybrid working models. Similarly, businesses learnt to leverage technology for enhanced productivity and gave an opportunity to revamp the remote workplace policies. And subsequently, as the devastation and dread of pandemic withered, and as people returned to traveling and mingling, this newfound ‘remote-working’ has further undergone recalibrations. It is creating a hybrid work model in this process – one that continues to develop in the corporate world. The model is relatively heterogenous with varying attitudes in different sectors and countries. Our internal research showed that the fully remote and hybrid models were dominant in countries like Japan, UK & USA, whereas in-office models were more visible in China, Hongkong, Taiwan and Thailand. Meanwhile, India and Singapore presented a more even mix. As new jobs are being offered with increased flexibility in most countries, hybridized work is likely to see a gradual increase in the coming years. Source: Savills Research & Consultancy Hybrid work models have undergone a major shift since early 2023 as companies started rolling out new policies for employees. As per The Flex Report – Q4 2023 by Scoop, the adoption of flexible/hybrid work has seen a steady growth in US companies from 51% at the start of 2023 to 62% by end of the year. As the importance of flexibility gets more traction with job seekers, this is likely to increase in other countries too, where the tech workforce resides. Interestingly, hybrid adoption levels are also observed to be divergent across the companies based on their founding years with higher acceptance for flexible working in younger companies. Also Read: Want to become a CROREPATI at a young age? Just follow these 5 tips In a landmark study conducted last year by Savills and Awfis, there are clear differences between employer mandates and employee preferences, towards returning to office fully – in most Indian cities. As per the said report, titled GenFlex Workspaces, while 44% of workers preferred hybrid work (both office & remote dominant), only 29% of companies were offering the same. ‘Return to work’ appears to be playing out slower in the technology industry, compared to other sectors, as only 57% in the tech industry are mandated to work in- office as compared to 71% in other sectors. It is evident that the models are still in flux. The evolution of the work model and mainstreaming of hybrid work in the last two to three years had a significant impact on commercial real estate. While the companies continue to look for the evasive balance between remote and in-office work, some trends have come to the fore. * Flight to quality and sustainability Over the last 10 years, commercial real estate has become extremely amenable to ESG adoption. Companies are now adding quality assets that offer full-suite amenities as a major pull-factor for employees. Also, the office properties that have retained highest occupancies are those where the developers have undertaken timely renovations and incorporated the sustainability parameters in the buildings. The rental premium in such properties does reflect, in some measure, the flight to quality in leasing decisions of tenants. * Consolidations by bigger companies As hybrid work is gaining currency across corporates, many companies started the process of improved desk use. As staggered physical attendance across workdays has begun playing a vital role in office planning, many bigger companies are looking to resize their real estate portfolio, while focusing on improving the quality of spaces. It creates opportunites for bettter managing real estate costs with greater space efficiency. Also, the current cycle gave an opportunity for most of the mid & smaller companies to embrace flight to quality as they expanded their office footprint, largely into the quality assets at lower rents. Eg: Wellsfargo and Qualcomm leased more than 1 million sq ft spaces each in Hyderabad post covid. Similarly, Google signed 3 million sq ft office space in early 2023 in Bengaluru. * New approches in office space planning With the emergence of new working models, pre-covid workplace planning strategies have increasingly been losing relevance. Recently, some global office markets have seen companies avoiding long-term leases that restrict their ability to respond swiftly to changes in the business environment. However, in India, we did witness large deals even after covid. Furthermore, the need for in-person interactions led companies to prioritise flexible office spaces, which offer necessary amenities and shorter lease terms. This trend is extending to tier II cities as businesses seek to optimise costs, stay near employees, and retain talent through a reverse migration trend away from major mentros. India Charting Its Own Path As traditional offices undergo transformation worldwide, India too is witnessing that transition and navigating the evolving world of work places. Disrputions that followed post covid have made irreversible changes to work places across the globe and commercial market has progressed through these changes over the years. However, these changes are manifesting differently in more mature markets, compared to those in growth-stages like India which display a more evenly balanced work models. Office leasing, which suffered dramatically at the height of the pandemic, has seen a substantial jump as MNCs are expanding in India, often through large deals. There is noticeable pattern of establishing GCCs in India, as is the ascendancy in flight to quality. The discernible shifts in work places post-covid have reshaped office markets across the globe, as employees are apprehensive about returning back to pre-covid office practices. This has created a solid foundation for hybrid work – one which has received endorsement at global scale. Its greatest value-proposition is that it apparently, finally, solves the riddle of work-life balance; it ends the search for the proverbial ‘holy grail’ of that evasive meeting-ground between productivity and employee wellness. Pragmatically though, we need to remain aware that its adoption is varied across geographies. While the chances of fully returning to traditional work model are low, the new models are still unwinding. Prioritizing talent retention and experimenting with a mix of work models will likely create further transformations. (By Megha Maan, Director – Research & Consulting, Savills India) Disclaimer: Views expressed are personal and do not reflect the official position or policy of FinancialExpress.com. Reproducing this content without permission is prohibited.
