As choice returns to the office equation, which workplace options will make a difference in attracting talent, and what are the consequences for the flexible office market, asks Nicolas Kozubek.
Perhaps the outcome we were least expecting from the global pandemic was a great, social experiment in remote working.
Nevertheless, the place that we call work has shifted so radically in the last few months that the outlook for offices has become an open debate.
Prior to the pandemic, just 3.4% of Americans worked from home. At the peak of the shutdown, an Upwork report in partnership with MIT found that nearly half of the workforce was working remotely.[i]
Similarly, in the EU, nearly four in 10 people began working from home as a result of the pandemic, according to Eurofound.[ii] More than half of respondents from Finland, Belgium, Luxembourg and the Netherlands said they had made the switch.
As lockdown protocols are eased, and physical offices equipped for the return of personnel, choice is returning to the workplace equation. Yet how companies pursue that choice and extend it to the talent they employ is likely to shape the world of technology, recruitment and real estate for years to come.
With technology powering home-working, it is perhaps unsurprising that the world of work has been taking its cue in part from the globe’s digital giants as it assesses how to move forward. While the likes of Microsoft and Amazon have extended work-at-home protocols until October for corporate staff, Facebook recently joined Twitter in stating that employees could work from home forever. [iii]Facebook will also be taking job applications for remote roles later in the year, as it continues to prize the needs of its present and future talent.
Google, one of the pioneers of the talent-friendly office, is pursuing a hybrid model, welcoming key employees back to its premises while encouraging home-working for others.
But the debate is arguably more interesting when we look beyond digital native businesses to the vast and varied range of tenants occupying premises across our towns and cities. Forced remote working has been a struggle for those that lack the technical infrastructure, or even the appropriate management culture; digital affinity and geography also play their part.
In 2019, 5.4% of employed persons in the European Union aged 15-64 usually worked from home; a figure which has remained constant at around 5% throughout the last decade. However, over the same period, the percentage of people that sometimes work from home has been rising, from 6.0% in 2009 to 9.0% in 2019. Across different geographies, the differences are starker. In 2019, just 0.5% of workers in Bulgaria, and 0.8% in Romania practised teleworking; in The Netherlands and Finland, it was over 14%.[iv] It is clear that when the border-agnostic pandemic rolled around, not all workforces were equally prepared.
Companies reviewing the benefits of teleworking might have hoped to count savings on utility bills and office cleaning, while averting the material risks of viral transmission. However, rents and fixed costs, plus the obligation to fit-out home offices or provide suitable tech, have largely eroded these benefits in practice. Not least because IT and data security don’t become less significant with remote working: they become more crucial than ever.
Meanwhile, the actual experience of remote working has revealed an emerging divide between wealthier upper management and everyone else, while utterly demystifying the novelty of videoconferencing, the sofa-as-office or cancelled school runs. In crowded capital cities, home-working in small apartments often collides with childcare obligations or simply spatial challenges. At the other end of the spectrum, professionals seeking to take advantage of remote working to move out of the city and pursue a dream life in the country or the coast may encounter another quandary: how remote is too remote? Good local amenities, fast trains, a nearby airport and even a social life remain non-negotiables for many.
Social animals as we are, the office presents an opportunity for human and creative collaboration which is impossible to replicate over video calls. Conference-room debates or even corridor interactions incubate small and big ideas. Now, as corporates explore and implement hygiene and distancing protocols for their office footprints, they are also looking to reboot the comfort factor for a pandemic-savvy workforce to promote productivity again.
Yet commuting has never looked more unattractive: the environmental, time-management and practical issues of worker travel over the last decade have collided with virus transmission fears today in packed public transport. One solution is what Hamilton Place Strategies calls a hub-and-spoke model, where company premises are physically dispersed with office locations spread across cities to meet people closer to home, ideally allowing users to walk and cycle to work.[v] Flexible offices can fill this need, both in experimental, transitional phases and longer term.
Taken to the extreme, the idea can be used to create multiple provincial options for workers, potentially improving quality of life, reigniting regional real estate markets, or simply supporting retail and service businesses in neighbourhoods and towns for greater economic equality nationwide.
The other argument for flexible office growth over the next 18 months lies in the necessity to create socially distanced models in current premises; vacating regular offices for pandemic-friendly fit-outs or permanently spreading staff members across bigger footprints. Companies in an experimental growth phase or exploring new markets may also want to do so on temporary leases. Business sectors which never flirted with flexible offices in the past may now discover their utility in a risk-averse world.
Furthermore, while office logic and layout were once purely about productivity, today’s innovation drill is particularly about ensuring space can meet the requirements of hard-won talent.
Offices aren’t dead; they are in evolution. Technology and innovation will continue to have a central role in driving talent-centric business plans; the pandemic’s peculiarities are merely accelerating their growth phases. At the end of the day, the real solution for building exceptional teams may well lie in maintaining multiple options that support the needs of the individual.
Nicolas Kozubek is director of Propel by MIPIM