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The prospect of remote work beyond the pandemic has state officials seeking ways to cut real estate, while reimagining how government workspaces look and function.
State governments are looking at slashing their real estate portfolios and dramatically redesigning agency office space, with the expectation that the Covid-era shift toward remote work is here to stay for many public employees.
Research the National Association of State Chief Administrators and real estate services firm JLL released Tuesday sheds light on how significant the transformation could be. The study, based on interviews with leading administrative officials in 23 states, found that 87%, or about 20, said their state is rethinking its real estate strategy.
Of the states weighing changes, 40%, or about eight states, anticipate reductions in their real estate footprints of up to 30%. The other 60% are undecided on how far to go. For states looking to downsize, the report notes that state-owned buildings tend to be less expensive than leased space. At least some states plan to let go of leased property first.
Officials also indicated that they’re hearing workers voice support for “hybrid” arrangements where employees work remotely two or three days a week and in the office on the other days.
“I’m a firm believer that hybrid is here to stay, just as a general rule, and had you asked me 18 months ago, I was not a fan of remote work,” said Brom Stibitz, director of Michigan’s Department of Technology, Management & Budget. “I didn’t like it. I liked people to be on-site.”
“This pandemic has proved me wrong, so now I’m a big advocate for it,” he added.
(Route Fifty will take a closer look in the coming days at how the trends described in the report are playing out in Michigan, as well as Nebraska and Colorado.)
A key downsizing strategy for agencies embracing hybrid work models is desk sharing, or “hoteling,” which involves moving away from traditional assigned desks, cubicles and offices.
“It’s anticipated that many states will shrink their overall real estate portfolios, and the space allocations in the remaining offices will feature less space dedicated to individuals and more space dedicated to supporting collaborative activities,” the report says.
“Determining the ‘right’ ratio of desk sharing requires first understanding the nature of the work performed by various jobs and the level of remote work anticipated,” it adds.
JLL has found that remote work can reduce square footage and occupancy costs by 15% to 30%, depending on the ratio of desk sharing and amount of collaborative space needed.
And the report highlights how Utah has a blueprint for saving upwards of $13.6 million annually as it moves to a new hybrid workplace model, with the state anticipating that it will exit 67 leases and reduce its statewide office footprint by nearly 850,000 square feet.
Giving up a familiar desk or cubicle might be an uncomfortable idea, especially for long-time employees—gone are stashed belongings within easy reach, family photos on display, a desk drawer of snacks. But, in exchange, workers gain the flexibility that comes with hybrid work and perks like less time and money spent on commuting.
The report outlines some best practices for agencies considering desk sharing. A few examples include: Adopting “clean desk policies,” which mean people clear off workspaces when they leave for the day; providing cubbies or lockers for storing equipment or personal items; and ensuring shared workstations are adaptable for different technology and people with disabilities.
On the tech front, some tools the report says states may consider include software to book workspace, collecting data on where people spend time in offices, and having ways to detect “ghost meetings” where a meeting is called off but the space isn’t released.
Other benefits of desk sharing
In addition to cost savings, there are other benefits states can unlock by moving toward hybrid work and smaller amounts of real estate.
For instance, it allows agencies to cast a wider net for talent around a state, rather than just looking in and around a city or town where offices are located. Flexible work arrangements are attractive to many workers and can help with recruiting. And less office space can contribute to climate and sustainability goals, cutting energy use in buildings and emissions from commuting.
In Michigan, Stibitz’s department handles most real estate for the state—including about 40 state office buildings and leased facilities. He said he found the survey results validating because they mirror initiatives the department is focused on to downsize real estate, cut leased space and adopt hybrid work arrangements.
“Our plans actually are pretty mainstream,” he said.
But he also emphasized that agencies need to answer questions about how remote work and other workplace changes fit with the services they provide to state residents. “Real estate optimization is important, it’s certainly one of my key objectives,” Stibitz said. “But I’m never going to push that on an agency and risk their business operations.”
A full copy of NASCA's report can be found here.
Is your agency planning to cut office space or adopt a hybrid work program post-pandemic? Do you want to share how you’re going about it so others can learn from your approach? You can send us a note and tell us your story at firstname.lastname@example.org.
Bill Lucia is a senior reporter for Route Fifty and is based in Olympia, Washington.