IWG Research Shows Gen Z Will Dominate and Change the Workplace, Consequently Shifting Office Occupancy
- The study revealed that Gen Z will comprise a quarter of the workforce in the near future
The world of work is undergoing changes, with a new generation of professionals and demands driving market evolution. According to the "The Future of Work: a trends forecast for 2023" survey conducted by IWG, trends indicate that Gen Z, which will soon represent over a quarter of the global workforce, prefers a hybrid model.
The study shows that 85% of individuals wish to have the office close to home. As a result, companies are responding to this demand by adapting to the 'hub and spoke' model. This approach involves reducing the size of main offices and implementing offices closer to employees' residences.
The "Workation" report, also from IWG, showed that 71% of respondents would consider changing jobs only if they had the flexibility to work remotely part of the time. As for benefits, 30% of individuals want longer vacations, 52% want to spend more time with friends and family, and 76% highlight that the greatest benefit is the balance between personal life and work.
Beyond the workforce and its impact on the real estate market
Looking ahead, IWG's "The Future of Work Trends Forecast 2024" revealed that 75% of CEOs expect their companies to continue operating on a hybrid model over the next five years. For Tiago Alves, CEO of IWG in Brazil, hybrid work is one of the main work megatrends for 2024, bringing benefits such as increased employee happiness, improved productivity, and greater talent retention and attraction.
"Hybrid work professionals can adjust their work to their lives, including reducing the need for long daily commutes. Offering the option of hybrid work is an important and simple way for companies to show they care about their employees. This allows them to have more control over their schedules and more free time. Companies that adopt hybrid work not only perceive a healthier team but also a more committed and productive one," points out Alves.
In addition to the presented data, IWG projects that by 2030, 30% of the entire commercial real estate market will consist of flexible workspace. SiiLA data reveal that in A+, A, and B class developments, the national vacancy rate stands at 24.5%, and pre-pandemic levels are still far off. The average vacancy rate was 19.4% in the first quarter of 2020.
In São Paulo’s CBDs, the same pattern can be seen. The year 2023 ended with a vacancy rate of 20.5%, which is 5.8 percentage points above the 14% of the first quarter of 2020.
