The 5 Biggest Reasons Fortune 500 Companies Are Going Hybrid

Christophe Garnier

The stigma of remote work at enterprise companies is disappearing before our eyes. It’s not only about office safety and the pandemic: We’re seeing corporate powerhouses making the leap to flexible, hybrid office models because while it’s always been more affordable and more productive, now it’s finally getting easier

Sure, flex space has long been popular with small companies and start-ups as a way offering employees a modern perk while reducing their overhead. But increasingly, enterprise companies are taking the leap, too. Already this year, Schneider Electric launched a hub-and-spoke solution with Upflex; Colliers International is leveraging our White Label feature to offer the benefits of our network to their largest occupiers. “It’s going to be a hybrid model if and when we come back to the office,” Schneider Electric Head of Real Estate Karen McClellan recently told our team. More such announcements are soon to follow.

Flex office revenue was already expected to more than triple before the end of the decade, growing from $29 billion in 2020 to $111 billion by 2027 according to a 2019 report by Zion Market Research. But then, of course, COVID-19 has boosted global adoption. Now, 82% of employers — including Microsoft, Spotify, Facebook, Twitter, Shopify, Square, Zillow, Salesforce, Slack and Nationwide, to name a few — are expected to increase permanent remote-work policies and distributed work arrangements post-pandemic.

This adoption is driving the innovation and solutions our industry has long been waiting for: Here’s why enterprise companies are turning to hybrid workspace — and not looking back.

1. They want to make employees happy, and attract new talent.

Companies want to keep their teams safer and also make them happier. In the long run, this means better chances of attracting — and retaining — the best new talent. Sure, it’s perceived as a safer option than commuting into a shared space in a pandemic, but even before that, the demand for flexible workspace from younger workers was already on the rise because many employees simply prefer it.

Research from Colliers International shows that 52% of employees want to work from a nearby coworking space or other alternative to the traditional office headquarters; More than two thirds of employees in a recent WeWork/Workplace Intelligence survey said they are willing to pay out of pocket for amenity-rich, focus-conducive workspace, while three quarters said they’d give up at least one perk from their existing benefits package in exchange for the freedom to choose where they work.

“Over time, the competition for talent could shift to places that offer the best combination of quality of life, affordability and state-of-the-art ecosystems to support remote work,” urban theorist Richard Florida and Upwork chief economist Adam Ozimek wrote in a recent op-ed for the Wall Street Journal.  “Losing talent can cost $30,000 per employee. But when your employees have the flexibility to work close to home when they need to, it’s easier to retain them.”

2. They want to help their teams be more productive.

For years, employees have been telling us they feel more productive working remotely. Lots of factors go into this; let’s look at just one: At Upflex, we’re well aware that the most productive part of a person’s day is often wasted on the commute, and we’ve been building solutions to help companies address this challenge since long before 2020’s work-from-home wave. Providing employees productive office options away from the potential mayhem of a living space yet still close to home means helping teams focus and get work done while also allowing them to skip waiting around on train platforms, getting stuck in traffic jams, and spending big on gas.

Whatever the reason employees feel more productive out of the office — the commute, diminished distractions, fewer meetings, better natural light — potential increase in productivity this shift brings is so real, recent research by Stanford University economist Nick Bloom and colleagues indicate the remote work trend could boost the U.S. economy by as much as 2.5%.

3. They want to put sustainability first.

Speaking of traffic jams and filling up the gas tank, commuting has big ecological implications, too. We’ve seen this in action in the past year: Reducing commutes by half could reduce the U.S.’s greenhouse gas emissions by more than 100 million tons per year.

And when it comes to office buildings, hybrid space helps reduce environmental impact there too — In the U.S., the energy spend of a large office building accounts for nearly a fifth of its operation costs. Meanwhile, the commercial buildings sector consumes more than three quarters of electricity usage and two fifths of all primary energy usage and associated greenhouse gas emissions in the country. Research has shown that working from outside the office just one day a week could decrease an employee’s carbon footprint by ⅙. At a global enterprise level, that impact multiplied is worth noting!

4. They want to save money on space.

It’s no secret that compared to long-term large office leases, hybrid workspace solutions save companies money. In a traditional model, about 40% of desks sit unused at any given time — or more — and we’ve built ways for companies to pay for just what they use, so in the simplest sense, hybrid solutions cost less. 

Plus, they’re flexible, so space and spend can be adjusted according to need as companies scale. Further, they’re morale-boosting, so companies save when it comes to employee retention. As I just mentioned, they’re energy efficient, and they boost worker productivity, and on top of all that, Upflex’s toolset is designed to reduce the lift, allowing companies to manage all their third-party space under one MSA, with one bill, so they save HR departments and RE facilities managers energy and bandwidth — where time is money.

5. Tools and solutions are getting better, easier, cheaper and more convenient.

I’ve talked to the heads of real estate at large companies that have wanted for years to implement hybrid workspace. But at Upflex, we know from our experience of guiding companies large and small through the realities of implementing these strategies that the transition can be intimidating.  The good news is that as adoption increases, finally there is demand for better products to enable hybrid work, and it’s getting easier to do these models right — even for global companies with 100,000 or more employees.

For example, speaking with our largest users — enterprise companies that employ tens of thousands of employees around the world — I’ve seen that the more workers a company employees, the less inclined they are to want to rely on outside real estate solutions and services as a replacement for their pre-pandemic offices, to which they had pinned so much of their company identity.

White Label is our new feature that allows companies to brand the Upflex app as their own, making a hybrid workspace solution part of their cohesive, branded employee experience. Meanwhile, Unify allows companies that still own or lease real estate to fold those properties into Upflex’s network, making their own spaces available for employees to book through the app, right alongside our larger network of thousands of offices around the world.  These are just two examples of the vast toolset we’ve created to help make sure companies can make their hybrid workplace model not only energy efficient, cost effective and appealing for teams, but also, seamless and cohesive, as opposed to real estate departments juggling multiple moving parts.

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Employees can’t work from home forever. Some can barely work from home at all. But no matter what happens after the threat of COVID-19 is behind us, companies will continue to need to offer remote work solutions in order to stay competitive. I believe that will involve the ability to conveniently, seamlessly book third-party workspace. At Upflex, we’ll keep finding ways to improve the flex workspace experience, from booking to collaboration and more.