The Future Corporate Workspace

LW7 Presenter Graphics 1200x630 Sean Wargo

By Sean Wargo, Vice President of Market Intelligence, AVIXA

The pandemic will forever be a dividing line for the corporate office market. Remote and hybrid work were never talked about more than in the last three years. Now that we’ve emerged from the pandemic, what will the future corporate workspace look like?

It makes sense to predict a major drop in office space demand: huge percent of office work successfully moved to home + massive savings by renting less office space = good reason to make remote permanent. And yet, that’s not what the data show. Office rents have continued on the same upward trajectory as pre-pandemic — a very different experience than after the last recession when rents stagnated for four years.

Also, for the last four quarters, corporate end users have told a consistent story of strong capital investments compared to the prior year. For ProAV specifically, corporate remains the largest vertical market with $58.6 billion in global revenue in 2022. The largest solution area? Conferencing and collaboration with $52.4 billion across all markets in 2022.

Huddle Room AVI SPL

Pre-pandemic, Huddle Rooms like this one designed by AVI-SPL, were all the rage in the corporate sector of ProAV.

The sustained demand for office space and employer motivations do not mean we’re going
back to pre-pandemic norms, though. Instead, the data tell us the long-run equilibrium is that familiar buzzword: “hybrid.” Pre-pandemic, the vast majority of work was in-office. Just 5% of pre-pandemic workdays in the U.S. were from home. That changed immediately at the pandemic onset, with over 60% of workdays remote in May 2020. In addition, employers quickly warmed to the concept of remote work, with about 30% of post-pandemic workdays planned to be remote as of January 2023. (We note that these figures reflect all types of work — including fundamentally in-person roles such as cashier or chef — and thus are underestimates of the rates for corporate office work.)

AVIXA’s earliest research into the intersection of corporate and remote work suggested that moving away from the office would have limited day-to-day impacts compared to long-range characteristics such as company culture, creativity and teamwork. Creating spaces in the office that spark conversation, facilitate brainstorming and create a sense of camaraderie is key for employees to see the benefits of being together in person. Employees are also motivated to gather in the office to learn from their co-workers. There’s also a possibility that companies will want to have a flexible space that can be used for events, such as holiday parties or town halls.

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During the pandemic, employees proved they could work from home productively. And with a healthy job market, they are in the driver’s seat to demand flexible work arrangements. Also, the bar has been raised for collaboration. The pandemic required employees to embrace conferencing and collaboration technology in order to keep business moving forward. Now employees are comfortable with online engagement, and their expectations are higher for these communication tools. They want to have the same, high-level communication and collaboration from any space — the home office, meeting room at headquarters, etc. They also demand equity of experience for all participants in their day-to-day meetings and collaboration efforts.

ProAV can facilitate this hybrid workplace of the future. With those high expectations from employees, it puts an emphasis on the skill level needed for AV integration expertise. Even more criteria are being placed on a very complex solution for making sure that hybrid meetings work well. You need to have well-thought-out design and excellent equipment that’s well installed and well supported.

At the pandemic’s start, AVIXA data suggested change was in store for the corporate vertical. Time has proven this true, as AV’s largest and most important buying market has entered a brave new hybrid world. Between the office environment’s importance and evolution, the time has come for AV business leaders to rebuild their understanding. Returning to the office does not mean returning to previous norms, with video conferencing showing surprisingly sustained value. The at-home environment is a tough nut to crack for providers, but the sheer volume of remote work and at-home investment make it a worthwhile goal. And despite fears to the contrary, all data points to a continued strong revenue stream from corporate. The pandemic has shaken the snow globe and the flakes are still settling, but the corporate market continues offering business success to whoever can keep up.

Want to hear more from Sean Wargo? Join his LAVNCH WEEK 7 session, The Office: Flexibility Today, on Monday, March 6 at 3:30 p.m. ET. Click here to learn more.