Small businesses are abandoning office space at a faster rate than larger rivals, and, in preferring the work at home business model, larger companies may soon follow suit.
These were the findings of two recent studies, which explored trends involving office space and workers’ preferences. One study was conducted by the business lending company, Clarify Capital. The study asked 663 small business owners about renting office space and what impacts such decisions. It found that as many as three in four business owners do not currently rent office space. Of those who do rent office space, one in four finance it with a business loan. 16% of small business owners who currently rent office space, plan to decrease or eliminate it in the next year. 24% plan to do the same within the next five years, the study found.
The survey found that cost was the top factor influencing office space rental decisions, with 52% of small business owners citing cost as the primary influencer. 41% said location was a key factor. This was followed by the need for office space to make company decisions, with 23% of the small business owners surveyed citing this reason.
Clarify Capital’s research follows earlier analysis by the New York Times, which found that the majority of larger companies are still renting office space. According to the study, in 2023 80% of the 143 workers in the US aged 16 to 24 were working full-time in offices. The remaining 20% were split almost evenly between working entirely at home and working in hybrid arrangements.
However, as statistics recently published by USA Today shows, 42% of office workers would be willing to take a 10% pay cut in order to have the flexibility of working remotely.
With such a large proportion of employees still preferring work at home arrangements, bigger companies may follow in the footsteps of their smaller competitors in reducing office space.
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