More people are being told to come back to the office as COVID-19 fades into the rearview mirror, although occupancy levels are still half of what they were before the pandemic.
Occupancy rates in downtown areas across the country were at a pandemic high of 47.5% in the business days from Sept. 8 to Sept. 14, right after the return from Labor Day, according to Kastle Systems, which tracks security swipes into buildings in 10 large cities. The number represents a big leap, more than 4 percentage points, from the preceding week.
California cities like San Jose and San Francisco have the lowest rates of office occupancy compared to pre-pandemic levels, with 39.5% and 40.7% occupancy, respectively. Texas is the closest to returning to early 2020 levels, with Austin clocking in at 60.5% occupancy and Houston with 56.8% occupancy for the week after Labor Day.
Kastle’s 10-city average shows huge growth from the start of the pandemic, when many corporate offices opted to go entirely remote with no in-office work permitted.
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In mid-April 2020, after the pandemic took hold, office occupancy plummeted to just 14.6% of the total occupancy before the pandemic. Since then, occupancy has slowly regained traction, though it fell from more than 30% in late 2021 to 17.5% during last year’s holiday surge of the omicron variant.
Still, despite these gains, many companies have decided to allow an indefinite hybrid work model for workers. The three-two model is the most popular, with workers going into the office three days a week — for example, Tuesday, Wednesday, and Thursday — while working from home on Mondays and Fridays.
The hybrid model has gained plaudits from employees in that it allows flexibility and saves workers time and money on commuting, and it has been favored by many companies because it builds morale and is a good hiring incentive. That is a major reason why a return to pre-pandemic staffing levels is not likely anytime soon.
“The hybrid model is going to be it,” James Bailey, a professor of leadership at George Washington University’s School of Business, told the Washington Examiner. He said he doesn’t think the office and staffing landscape will ever return to the occupancy levels experienced before the pandemic.
Kastle’s data also bear out this shift toward hybrid work. While different employers choose different days on which they require workers to be in, many favor having in-office work at the core of the work week.
For example, for just the Thursday after Labor Day, the average level of occupancy was above 50%, higher than the average for the week. That number plummeted to a mere 33% occupancy on Friday, showing what a big difference one day can make. By the following Tuesday, occupancy rates had leaped to 55%.
Kastle Systems CEO Haniel Lynn told the Washington Examiner that he isn’t sure in-office occupancy and staffing will return to their pre-pandemic levels but predicted that it will continue to pick up as time goes on, as evidenced by the slow but steady increases seen by his company.
He said that as the pandemic fades away, employers likely want more time in the office but are asking, “What do I do to get the most out of our people and get the highest level of productivity from them?” And the answer to that might be a return to full in-office work or a continuation of hybrid work, he said.
There are also other indicators that more people have begun to return to offices. The Wall Street Journal reported that ridership on the Long Island Rail Road recently exceeded 200,000 for the first time since right before the pandemic began. Many of those who work in Manhattan live on Long Island and commute into the city, so the uptick is a sign of more in-office work.
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The overarching factor that initially drove remote and hybrid work, COVID-19, has waned to steady levels, and there haven’t been significant spikes, like the omicron surge, in months.
New cases of COVID-19 are down nearly 20% from two weeks ago, hospitalizations are down 14%, and deaths are up 8%. Even though deaths are up a bit, they are still averaging just over 400 per day — far below the more than 3,000 daily deaths being notched during the peak of the pandemic.
