Return-to-work mandates on the rise

Employers seem to be succeeding in encouraging a return to work, as office occupancy rates have seen a steady increase since last year. However, there’s still some pushback as they’re well below pre-COVID-19 levels.

The CBD occupancy rate in Australia is reportedly 71 per cent of what it was pre-pandemic in Q3 this year, according to research from CBRE. This is a decent increase from the 54 per cent level recorded in Q3 2022.

This indicates that return-to-office mandates are ramping up. CBRE’s Australian head of office research, Tom Broderick, believes many are seeing the benefit of being onsite for work.

“Companies and employees alike are acknowledging the importance of face-to-face collaboration and the synergy it brings to their operations. Every major CBD market in Australia has recorded increased occupancy rates over the past 12 months, with the smaller markets of Perth and Adelaide having rebounded impressively, nearing pre-pandemic levels on peak days,” said Mr Broderick.

According to the research, some states saw higher occupancy than others:

• Perth CBD (91 per cent)
• Adelaide CBD (85 per cent)
• Sydney CBD (75 per cent)
• Brisbane CBD (75 per cent)
• Melbourne CBD (56 per cent)

It’s unsurprising that Perth and Adelaide saw more employees in the office for work, considering the pandemic and lockdown periods were significantly reduced in Western and South Australia.

Melbourne, on the other hand, is still at almost half occupancy. A trend that CBRE said is due to the prolonged lockdowns experienced in Victoria.

Australia appears to be ahead of much of the world in enforcing return-to-work mandates. While some may argue this hinders flexibility and productivity, others will say the opposite.

CBRE’s Pacific head of investor leasing, Tim Courtnall, believes that these mandates are good for promoting productivity and company culture.

“CBRE’s 2023 Global Occupier Sentiment Survey found that 69 per cent of Asia-Pacific respondents – versus just 45 per cent from the US – have set a goal for employees to be mostly or fully in-office, and this has been reflected in recently introduced policies by some major corporates in Australia requiring a minimum 50 per cent attendance rate during the week or month,” Mr Courtnall said.

“It’s been encouraging to see global companies move away from global mandates on their work-from-home policies and give regional management autonomy to implement country-by-country policies. This approach will only have positive impact on productivity and company culture.”

He added: “Many employers are also looking to incentivise employees to return to the office, with KPMG’s 2023 CEO Outlook finding that 74 per cent of Australian CEOs surveyed plan to reward employees who make an extra effort to come into office with raises, promotions and more interesting work. This combination of push and pull factors driven by top-down policies from corporate leadership will be a key driver to sustained improvements in office attendance.”