About one in five businesses (21%) plans to shrink or eliminate office space in the coming year as the COVID-19 pandemic continues to reshape business priorities. That’s a slight increase compared with the 18% figure reported in the third quarter of last year, a new AICPA survey of finance decision-makers shows.
Most business executives say they expect their companies to be back to pre-pandemic levels of operation within the year or say their companies are at that level already, but 27% said it would take a year or more to climb back.
“As the recovery progresses and we move towards the next normal, more and more people will return to their traditional places of work,” Ash Noah, CPA, CGMA, FCMA, vice president and managing director of learning, education, and development for the Association of International Certified Professional Accountants, said in a statement. “But this doesn’t change the fundamental shifts we’re seeing toward more virtual and remote operations, which have been greatly accelerated during the past year. Some functions can’t be performed effectively remotely, of course, and we expect to see more office sharing, ‘hoteling’ of office space, and more decentralized operations in general. The nature of office space and how it is utilized will continue to evolve towards a more flexible and hybrid operating model.”
Ninety-one percent of companies continue to use a hybrid model of remote and office work, and 72% of CPA decision-makers said their organizations had no plans to change their office footprint during the next year. That’s down from 77% who said they wouldn’t add or subtract their space in the third quarter of 2020, the first time the question was asked.
Here’s a breakdown of the numbers the two times the question was asked about office space changes projected for the coming 12 months:
A lower number of respondents said that the pandemic was having a negative impact on their business. Seventy-six percent cited the pandemic as having at least a slight negative impact, down from 92% in the second quarter of 2020.
The questions about office space and pandemic impact were part of the first-quarter Business and Industry Economic Outlook Survey, a quarterly measure of forward-looking sentiment. The survey polls CPA decision-makers in business and industry. The first-quarter results showed more optimism regarding the domestic economy and the respondents’ own businesses. Second-quarter results will be released in June.
— Neil Amato (Neil.Amato@aicpa-cima.com) is a JofA senior editor.