69% of Businesses Have Permanently Closed Office Spaces During the COVID-19 Pandemic

69% of Businesses Have Permanently Closed Office Spaces During the COVID-19 Pandemic

Others have decided to shut down some of their offices or downsize their space instead
empty office space

With millions of American workers now pushing for permanent remote work arrangements, many employers have acquiesced to these demands. This decision, in turn, will have far-reaching effects on office real estate.

According to the latest report from small business resource review site Digital.com, 69% of American businesses have permanently closed some or all of their office spaces since the onset of the coronavirus crisis, with another 39% planning to do so in the next six months.

The survey also revealed that businesses of different sizes approached office closures differently: Nearly half (45%) of businesses with over 500 employees reported a permanent shutdown of all their office space, while over one-third (36%) closed down a portion of their offices.

In comparison, 48% of companies with 10 employees or less didn't close any of their office spaces at all.

Majority of respondents will adopt hybrid work schedules

Only about 6% of American employees worked remotely before the COVID-19 outbreak started — a number that increased to about a third of the entire U.S. workforce once the health crisis started. And with a recent GoodHire survey finding that 45% of workers would rather quit or search for a new job than return to the office, it's little surprise that many employers made this work arrangement permanent.

Digital.com discovered that 51% of respondents that have kept or plan to keep at least some of their office space have allowed their employees to continue working remotely. Almost 1 in 5 (17%) will utilize a hybrid work model, while 14% mandate a full-time return to the office.

And with fewer employees working on-site due to remote work policies, other businesses have decided to downsize their office space instead. Specifically:

  • 58% of respondents who still have office space downsized
  • 75% of respondents who closed some of their office space downsized the space that remains
  • 41% of respondents who didn't permanently close any office space downsized their space

Still, COVID-19 remains a concern for workers and their employers alike, which is why 52% of considering implementing workplace vaccine mandates by the end of the year.

Business owners still see benefits of in-person work

The widespread adoption of remote work in the U.S. was one of the biggest factors that pushed business owners to close down their office space, as respondents said that their top reason for their decision was the fact that employees want to work from home permanently (69%). Other popular reasons included:

  • Saving money (53%)
  • Knowing employees are equally or more productive when working remotely (51%)
  • Protecting the health of their employees (45%)

Interestingly, though, the Digital.com survey showed that most business owners have decided to close down their office space in spite of the many perceived benefits that on-site operations offer. Respondents that permanently closed down all of their office spaces said that in-person work presented improvements in:

  • Productivity (68%)
  • Creativity (55%)
  • Communications (52%)
  • Company culture (41%)
  • Employee oversight (39%)

Less than one-fifth (16%) of those who have stopped all on-site work saw no benefits in it. In comparison, 8% of businesses who have kept their doors open and plan to do so indefinitely cite no benefits to working in person.

Methodology: On behalf of Digital.com, Pollfish conducted an online survey of 1,250 U.S. business owners with a staff working from an on-site location before the start of the COVID-19 pandemic. The survey took place between Aug. 12-13, 2021.