More workers get crammed into less space

Dan Weissmann Jul 1, 2014
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More workers get crammed into less space

Dan Weissmann Jul 1, 2014
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More people have jobs than before the Great Recession started, but office workers are cramped into less space than before. A lot of office space went empty during the recession, but a report from the real-estate information company Reis shows that only about half of that space has filled back up. 

It’s normal for office space to come back more slowly than employment, partly because offices often shrink more slowly than the workforce too.

“As you go into a recesssion and companies start to lay off employees, often-times the size of their physical footprint can’t shrink in accordance with that,” says Ryan Severino, an economist at Reis. “So there tends to be a little bit of a mismatch.”    

In other words, when companies bring back workers, a lot of them already have a bunch of extra space to put those people.  

Even when companies don’t have extra space — say, they were able to get out of their old lease and take a smaller space — increasing the footprint comes after hiring the people, and not until the old space gets tight.

“When you start doubling-up that office space, and start hearing complaints, you’re going to start planning,” says  Susan Wachter, a professor at the Wharton School of business. “But you need to know the people are on board, and that you’re gonna need that space. And then, that too takes time.” Budgeting for a move, for example, doesn’t happen overnight.

This recovery has seen even less pickup of office space than previous cycles. Wachter also notes that open layouts, which require less space per employee, have become more popular.

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