Alive and Well
The compelling insights of New Zealand’s global lead in hybrid working.
October 12, 2023
The detailed and quantitative survey data of purely New Zealand companies provides insights from 66 corporate real estate executives whose organisations represent 13 sectors and occupy 221,000sqm of office space across Auckland, Wellington and Christchurch. It has delivered many insights showing that the office is not an endangered species, but over recent years New Zealand businesses have defied global trends and embarked on their own unique path.
The contrast of the New Zealand experience with the United States and Asia is notable.
Among New Zealand office occupiers, 94% of organisations support hybrid working and 65% have adopted a balanced hybrid model that is office-based, with a regular remote element. By contrast, 22% of occupiers in the United States are working to a predominantly remote model and a more balanced hybrid model only applies to a third of office occupiers.
Across Asia, the balanced hybrid approach is even less prevalent, with predominantly office-based employment modes being adopted by two-thirds of occupiers according to CBRE’s 2023 APAC occupier survey.
Office Attendance and Adopted Workplace Models
Office attendance varies widely based on industry, organisational size, and where decision-making sits.
Average office attendance is 3.2 days a week, although this varies widely. Industry differences are marked, with attendance ranging from 2.5 days a week for the public sector to 3.9 days a week for the legal sector. Smaller occupiers are also more likely to be predominantly office-based compared to large occupiers.
We learned that who makes the decision on office attendance also has an influence on time spent in the office. In organisations where individual employees are the primary determinants of when they go to the office, average attendance is 2.9 days a week, although there was a widespread of responses around this average. In private sector organisations where senior leadership/HR are the main decision-makers, attendance is higher at 3.4 days per week.
Decisions on the nature and extent of hybrid working are typically made at the middle management/individual team level in nearly half of organisations, with typical weekly attendance in this organisational model averaging 3.1 days per week. Individual employees determine office attendance in only 11% of organisations.
Senior leadership influence on decisions around hybrid working practices is expected to increase, leading to more time spent in the office.
The influence of senior leadership on hybrid working and office attendance is expected to increase in the next few years. The net result will likely be a reduction in remote working, with 21% of organisations looking to decrease the extent of hybrid working during the next two to three years, compared to 2% expecting to increase it.
This does not mean that the prevalence of hybrid working practices will fundamentally change. Nearly two-thirds of respondents think that current hybrid practices won’t, or are unlikely to, change. This indicates that we will likely see current practices being refined at the margins rather than a wholesale change back to a full-time office-based workforce.
A move to greater presence in the office reflects leadership concern about hybrid working’s cost/benefit trade-offs, and the optimal balance of office vs remote work.
It is noteworthy that although hybrid working is considered to have had a positive impact on organisational culture, with 73% of respondents believing that the experience has been at least “somewhat positive” or better, the top challenge arising from hybrid working is keeping and building a strong culture when people are in the office less.
This indicates that significant effort is required to build a strong organisational culture in hybrid workplaces. However, the results also point to concerns that lower levels of face-to-face contact may have adverse longer-term consequences.
52% of New Zealand organisations have changed their workplace design as a result of new ways of working.
Nearly 90% of survey respondents have reduced, or are looking to reduce desk/workstation numbers and space allocated to traditional generic meeting rooms is also on the decline. Offsetting these changes there is increased focus on providing more communal and collaborative spaces alongside more private quiet spaces and focus rooms.
Occupiers are relocating to better quality office space to respond to the increasing importance of building amenities, and primarily public transport. 83% of respondents have indicated that being close to public transport is the most important building/location-level amenity for their organisations.
Kirstin Cooper, Senior Workplace Consultant, New Zealand, says that the survey is answering questions she hears most often from occupiers: ‘What is everyone else doing?’.
“The survey has validated many things we were hearing anecdotally, but has also offered some surprising insights into what is actually happening and where the future of work is heading. Keeping and building a strong company culture is emerging as the greatest challenge, and we are having conversations with organisations about what that means to them in an evolving hybrid era. What is clear is that the onus is now on employers to provide high quality workplaces and amenities: the better the work environment, the more likely people are to work from there."
“Defining a hybrid working strategy is crucial to getting this right. We recommend occupiers take the time to understand how their people work, how they use their space, and what workplace elements are most important, so they can make well-informed real estate decisions and create dynamic and engaging work environments that really ‘earn the commute’.”
Zoltan Moricz, Executive Director Research for CBRE New Zealand, says: “This survey provides a valuable counter argument to the ‘office is dead’ mantra that is so often rolled out. The office is not an endangered species, and we are watching carefully the influence of senior leadership on hybrid working and office attendance, which is expected to increase in the next few years, leading to more time spent in the office.”