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7 in 10 businesses have permanently closed office space since the pandemic

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David Huckshttps://myrtlebeachsc.com
David Hucks is a 12th generation descendant of the area we now call Myrtle Beach, S.C. David attended Coastal Carolina University and like most of his family, has never left the area. David is the lead journalist at MyrtleBeachSC.com

Not long after the COVID-19 pandemic sent employees scattering to home offices and remote locations so companies could continue operating while minimizing exposure to the deadly virus, speculation exploded about what this temporary change would mean for the future of how Americans work.

Now, the future is here, and it appears that some things have changed for good.

In August, Digital.com surveyed 1,250 U.S. businesses that, prior to the pandemic, had at least some employees working in an on-site office. We found that a significant portion have permanently closed some or all of their office space, primarily as a result of employees wanting to continue working remotely.

Key findings:

  • 69% of businesses in the U.S. have permanently closed some or all of their office spaces, since March 2020
  • 37% permanently closed all office space
  • 39% of businesses anticipate closing some or all office space within the next 6 months
  • Majority of employees wanting to work from home is the top reason why businesses have permanently closed office spaces
  • 41% of businesses have downsized their existing office space, since March 2020
  • 51% of businesses planning to keep office space will allow employees to choose to work fully remotely indefinitely

69% of businesses have permanently closed office space

Prior to the pandemic, a shift to more remote work was already in motion, thanks to improvements in telecommunications. However, before March 2020, only about 6% of U.S. workers did their jobs primarily from home. That number jumped to one-third of all workers after the pandemic hit.

Now, what once may have seemed like a temporary way of operating has become permanent. Among businesses that, prior to the COVID-19 pandemic, had office space, 37% permanently closed all of their physical office locations.

An additional 32% of businesses closed some, but not all, of their office spaces since the start of the pandemic.

And the transformation isn’t over yet. Eleven percent of businesses that still have office space say they plan on permanently closing all of their locations within the next 6 months, while 28% will close some of their offices within the same time frame.

Nearly half of businesses with 500+ employees have closed all office space

Our survey found that 45% of businesses with more than 500 employees permanently closed all of their office space, while 36% closed some of their offices, and 64% downsized office spaces that they have kept.

Businesses with 10 or less employees were the most likely to not have closed any office space with nearly half keeping their doors open.

Top reason for closing all offices: employees want to permanently work from home

Much of the speculation about whether the temporary shift to remote work would become permanent revolved around how employees felt about working from home.

According to the businesses we surveyed that closed all office space, working from home is very popular among their employees. When asked why they permanently closed their offices, the number one reason is that employees want to permanently work from home (69%).

Employers may have been willing to make the shift to remote work permanent because it did not affect worker productivity, with 51% saying their decision was influenced by employees being equally or more productive while working remotely.

The bottom line was also a factor; 53% of companies who permanently closed office space say they did so to save money. Forty-five percent also closed their offices to protect employees’ health.

All of these factors played a role in Andrew Ehlert’s decision to close the office for his Raleigh-based digital marketing consulting company. “My team proved that they could maintain their workload while working from home,” says Ehlert, who surveyed his company on the question of shutting down their office space before making his decision.

Eight of my team members said they would rather work from home because they are happier, healthier, and even get more work done,” says Ehlert. “As long as my employees get their work done in an efficient, effective manner, I’m happy to let them work remotely.’

58% of businesses downsized office space

The shift to having more employees work remotely has also resulted in a significant number of companies downsizing their office space, as a concession to having fewer employees on-site.

Fifty-eight percent of all businesses that still have office space say they downsized since March 2020.

That percentage is higher for businesses that have closed some of their office space, with 75% of businesses in that category saying they reduced the office space that remains.

Among businesses that did not permanently close any office space, 41% chose to downsize..

According to Teresha Aird, Chief Marketing Officer of Offices.net, her company decided to downsize their office space because more employees are working from home part-time.

Aird says, “We closed our former office space in favor of a smaller, more open-concept workspace that serves as more of a social and collaborative hub for employees to meet and discuss important projects.”

Despite closing all office space, most employers see benefits to in-person work

Even as they are giving up office space and allowing employees to work fully remotely, many employers still believe that having workers on-site is beneficial–but those benefits don’t necessarily outweigh the cost savings and employee satisfaction of remote operations.

Only 16% of business owners who have permanently closed all of their office space say there are no benefits to having employees in the office.

The rest still see benefits, including:

  • Improved productivity (68%)
  • Improved creativity (55%)
  • Improved communications (52%)
  • Improved company culture (41%)
  • Improved employee oversight (39%)

Those with no plans to close office space value in-person communication

Only 8% of businesses that have not closed, and do not plan to close any office space say there are no benefits to working on-site.

The majority believe benefits to working on-site include:

  • Improved communication (62%)
  • Improved productivity (59%)
  • Improved employee oversight (45%)
  • Improved company culture (44%)
  • Improved creativity (43%)

According to Michael Ell, founder and CEO of Wise Dollar Insurance, improved communication is the primary reason he is retaining office space, and allowing employees to return to in-person work on a flexible basis.

“People learn more when collaborating in-person,” Ell says. “Questions can be asked before, during, and after meetings. Quick sidebar conversations in the hallway become major initiatives. And that doesn’t happen through Zoom. When you share an office space with colleagues and customers, you can create trust and relationships that might not be possible without the face to face interaction.”

Half of employers with office space allowing employees to keep working remotely

Our survey also found that just because a company is maintaining some or all of their physical locations, they are not necessarily requiring that all employees return to the office full time.

Fifty-one percent of businesses that have kept and plan to keep at least some office space are allowing employees to choose to work fully remotely indefinitely. Another 17% say that they will have a hybrid model, with employees working in the office part-time, and from home part-time.

Only 14% are requiring employees to work in the office full-time.

Some businesses, like decontamination service Mold Busters, must maintain a physical location to house equipment and vehicles, which allows the company to have the best of both worlds.

“Since we are a home services business, even if we wanted to close our offices and go completely remote we would still need a facility to supply our teams in the field,” says Mold Busters’ Chief Operations Officer Charles Leduc. “During the lockdown, some of our employees thrived working remotely, but many others needed the energy that can only be derived from a team working toward a common goal in the same space. Once we knew how to re-open safely, we started running a hybrid workplace to accommodate both sides.”

Methodology

All data found within this report derives from a survey commissioned by Digital.com and conducted online by survey platform Pollfish. In total, 1,250 U.S. business owners who had a staff working from an on-site office space prior to the COVID-19 pandemic were surveyed. The appropriate respondents were found via a screener question. We conducted this survey over a two-day period starting on August 12, 2021 and ending on August 13, 2021. All respondents were asked to answer all questions truthfully and to the best of their abilities.

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