Hybrid Work Cost Savings – Up To 40% [Free Calculator]

I’m sure many of you were excited to see the end of 2022. It’s been a messy year. Office occupancy rates are still 40%, while work-from-home days are stable at about 30%.

Hybrid work is gaining momentum but is also very challenging to manage. Many employees feel very productive at home, while most managers believe their teams are less effective when working from there.

At the same time, interest rates are increasing, and the world is slowly slipping into the next big recession. Company valuations went from the highest ever rates to the lowest. These are some very challenging times for most businesses. Always remember that the most difficult times are hiding great opportunities too.

Now’s the perfect time to build a solid, efficient, and flexible workplace strategy! And think about the potential hybrid work cost savings that you can get.

Wait…what?!

It’s true.

Hybrid work can easily save you a stunning 40% of your office space costs. Furthermore, your teams will be very grateful too. With a proper hybrid workplace strategy and technology, you can save a ton of money and dramatically improve the workplace experience for your employees.

But let`s start from the beginning.

P.S. If you’d like to see the excel calculator in action right away, click on the button below.

The HQ Function

Before we dive into the joy of cost-cutting, and more specifically into the big hybrid work cost savings I mentioned above, let’s first define what’s the office and why we need one.

The purpose of the office has changed quite dramatically in the last few years. From spaces to work (workspaces), it turned into places to collaborate. We’ve covered it at length in different articles, and here’s a summary. In 2023, an office is a place to:

• meet your team, collaborate, and co-create;
• work and be productive;
• socialize with like-minded professionals;
• grow by osmosis learn from the experience of your colleagues;
• emphasize the company culture;
• stimulate inclusion, diversity, and fairness;
• offer various services and amenities.

The office still has a massively important role in the future of most organizations.

Yet, it’s different. It needs a new design, new concept, and new intention.

While that’s the most important reason to implement a hybrid work model, we can save a lot of precious resources by doing so.

Here’s how!

Hybrid Work Cost Savings: What To Expect

Implementing a hybrid work model can save you a stunning 40 or even 50% of your office costs once your office move is finished. Let’s zoom in.

Historically, pre-COVID, most companies used to maintain a 1:1 employee-to-desk ratio. Even worse, most fast-growing companies were leasing and fitting out a lot more space so that they had room to grow. Often, we’ve seen offices with 20-30% or more desks than the current number of employees.

Our data, based on more than 100,000 employees utilizing hybrid work models, suggest that the perfect ratio is actually between 0.3 to 0.7 desk-to-employees.

We see that offices with a 0.5 ratio are close to 90% occupied on Tuesday-Wednesday-Thursdays and close to 50% occupied on Mondays and Fridays. So, even with half the number of desks, you can still maintain a healthy office occupancy without too much pressure on empty seats. At the end of the day, you want to avoid creating barriers for people to use the office.

Note:* There’s a great option to go for a lower ratio and mitigate the risks by introducing more mixed-used, ad-hoc seating areas. Read more here.

🔍 Insight: The key to implementing a lower employee-to-desk ratio is desk hoteling or hot desking. Read more here.

The same applies to parking spaces, where you can use space hoteling models to reduce the number of spaces and increase utilization.

Using the assumption that we can reduce the office footprint by 40-60%, we can also reduce utility costs. The rising energy bills and the raging inflation further increase the burden, which is another reason to reduce the overall footprint. In total, we can save more than 35% of the utility bills if we implement a proper hybrid work model.

Last but not least, the most significant saving, or in fact, performance gain, is a result of the increased productivity of your employees due to reduced commuting.

A wide range of pre-pandemic studies showed that remote workers spend about half the time they would have otherwise spent commuting actually to work. The Global Work From Home Experience Survey results were similar.

Employees said they voluntarily worked an average of 47 percent of the time they would have otherwise spent commuting. Based on a typical commute, that adds up to another seven days of productivity per year for a halftime remote worker.

These two factors alone, fewer interruptions and commute time spent working, increase the annual productivity of each halftime remote worker by the equivalent of 16 workdays a year. You can check this report for more details.

Our estimation is that the average US company with 200 people can save more than one million dollars per year in productivity gains and commute-associated costs by implementing a hybrid work model. Furthermore, the time saved in commuting and the environmental benefits are immense.

Hybrid Work Savings Calculator

Based on our experience working with hundreds of hybrid work companies, thousands of hybrid employees, and a lot of research, we have built one of the most advanced hybrid work office optimization calculators.

Check out, copy or download our advanced Hybrid Work Savings Calculator through the button below.

The calculator is free and easy to use.

This easy excel calculator allows you to select a region first, the UK or the USA, for the time being. Then, based on a lot of benchmark data for the specific country and your specific organization data, we can calculate the following:

• Real Estate – that’s the reduction of your leased space’
• Utilities – that’s how much you can save on utilities;
• Absenteeism – that’s how much you can save based on optimizing the real Estate for various non-working days that employees will not use a desk anyway.
• Productivity – this is the net gain you can achieve by reducing your employees’ commute time and the office’s distractions.

The potential savings and gains for a midsize organization are staggering! You can go download and make a copy of the calculator and play it yourself here!

Please, note that the benefits of hybrid work go way beyond office reduction and cost savings. Before all, flexibility brings enormous value to all of us in our quest to find the balance between achieving professional success and spending more time with our loved ones.

Sure enough, implementing hybrid work requires using the right software. Click here to start with OfffceRnD Hybrid for free and see how it can improve your business.

FAQ

What are the most important hybrid work cost savings?

By implementing a hybrid work model, you can significantly reduce office costs by up to 40%. By allowing employees to work remotely some of the time, companies can downsize their office space and save on rent, utilities, and parking spaces.

How does hybrid work save on office space costs?

Data suggests that by implementing a hybrid work model, employers can save up to 40 and sometimes even %50 on office costs. That’s done mostly by lowering the employee-to-desk ratio, thus paying less in overhead costs.

What’s the ideal employee-to-desk ratio for hybrid work that allows for maximum cost savings?

The perfect employee-to-desk ratio for hybrid working is 0.3 to 0.7. What really helps in decreasing that ratio is by implementing office hoteling or hot desking. The goal of these organizational workplace systems is to optimize the floor plan so that there aren’t more desks than employees.

What are the benefits of a hybrid workforce?

The benefits of a hybrid workforce include:

• Reduced office space and overhead costs
• Increased flexibility and work-life balance for employees
• The ability to attract and retain top talent
• Access to a wider pool of talent
• Increased employee engagement and job satisfaction
• Potential for improved productivity and performance

How much does an employee save by working from home?

The amount an employee can save by working from home varies depending on individual circumstances. However, some common savings include:

• Commuting costs (e.g. gas, public transportation)
• Work wardrobe expenses
• Childcare costs
• Eating out for lunch less often

Recent data collected by FlexJobs shows that by working remotely full-time, an employee can save up to $12 000 annually.

And here’s a though-provoking video on hybrid work:

How does the hybrid work arrangement lead to increased productivity?

Hybrid work can lead to increased productivity in a few ways:

• By offering flexible working options, companies can attract and retain top talent who may not have been able to work for them otherwise.
• Allowing employees to work in an environment where they feel most comfortable and productive, can lead to increased engagement and job satisfaction which can translate to better performance and productivity.
• Providing the opportunity to work remotely, can allow employees to have more control over their time, which can lead to more efficient use of time and better productivity.
• Allowing employees to have more autonomy over their schedules and work environments, can lead to increased creativity and innovation.

References & Research: 

• Average utility costs USA
• Average utility costs UK
• Average lease prices USA
• Additional FM costs
• Average commute times USA
• Average commute times UK
• Average per desk area per person
• Reduction in absenteeism