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Leading carriers shed office space to make room for remote work

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As employers look to find ways to retain and recruit employees amidst the Great Resignation and Great Reshuffle, creating robust remote work and hybrid work opportunities might be the answer.

  • According to a survey conducted by The Jacobson Group, nearly nine out of ten employers expect to offer a hybrid work-from-home or office approach when they reopen their offices this year. 
  • ADP Payroll Services conducted a survey and found that two-thirds of workers would consider looking for a new job if forced unnecessarily to return to the office full time. 
  • A Harvard study found that full-time in-office workers have more work-related stress and anxiety than their hybrid and remote counterparts. 
  • A study conducted by Future Forum and published in the Wall Street Journal found that employee overall satisfaction with the workplace declined by 1.6 times for those having to go into the office five days compared to other groups. 

The prioritization of ensuring a true work-life balance suggests that companies should be empathetic and meet employees in the middle with their needs and wants in the workplace. Willis Towers Watson’s Tracey Malcolm stated that one of the biggest disconnects between workers and employers is around remote work, where employees want more than their current employer allows. 

In response, larger companies look to downsize and consolidate their office space to put hybrid work models first. Trends like hot desks and designated interaction hubs mean fewer assigned seats and more dynamic spaces dedicated to collaborating and working with colleagues in real-time. Here are a few insurance carriers who have recently announced downsizing plans: 

  • Farmers announced that it would be shrinking its office space in Kansas City. The carrier sublet spaces in Delaware, Arizona and California as well. 
  • American Family is also considering subletting real estate nationwide, as well as consolidating some offices. The carrier stated that employees working from home will almost certainly surpass 25%. 
  • Allstate announced in November 2021 that it planned to sell its suburban Chicago headquarters to trim company expenses and continue its hybrid work transformation. 
  • Nationwide announced plans to redesign its office space for the “hybrid worker of the future,” and is looking to lease its Des Moines office space. 

While the increase in remote and hybrid work opportunities seems beneficial to most, the record amount of office space hitting the market this year is putting property and office building owners at risk. Leases for 243 million square feet of office space are set to expire in 2022, the most office space to hit the market in a single year since 2015. Companies have started to prefer shorter-term leasing terms as well, bringing more uncertainty for landlords.

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Jasmine KimB2B Content Manager

Jasmine is The Zebra’s newsroom content writer. With a background in journalism, she reports on breaking news, trends, mergers and acquisitions, and financial reports related to the insurance industry.