This time last year, it felt as though we’d never go back to the office again. Even before the pandemic, a study revealed that 70% of employees believed they could do their jobs without going into an office.1 And, in many cases, once the adjustment to remote work was made, companies agreed. By June 2020, nearly three quarters of company CFOs said they expected to permanently transition a number of previously on-site employees to remote work once the pandemic was over—largely to reduce their commercial real estate expenditures including capital costs, rent, and facilities operations, management and upkeep.2
It seemed that some companies couldn’t get out of their real estate obligations fast enough. REI sold off its brand new, never-used, 8-acre corporate headquarters, which had been four years in the making, and opted for a number of smaller satellite offices. Other companies, such as CVS Health and Ralph Lauren, also announced cuts in their corporate real estate of up to 30%.3
Altogether, there was a 36% decrease in the signing of new leases and renewal of existing leases in 2020.4
But while other industries were selling off real estate, the tech industry was buying. Big name companies in that sector led the way in signing and renewing leases, and represented 24% of leasing as measured by square footage.5 They saw a buyer’s market, and, perhaps, the future of office space utilization.
Although the pandemic has changed the balance of work-from-home vs. work onsite for the foreseeable future, if not permanently, the rumors of the “death of the office” seem to have been greatly exaggerated.
Short-Term Reentry Plans
A January 2021 poll found that 9% of businesses had begun readmitting employees to the workplace, 12% planned begin reentry in the second quarter of the year, and 21% during the third quarter.6 Another survey found that 70% of CEOs, HR leaders and finance leaders plan to have employees back in the office by this autumn.7 As of March 2021, approximately 25% of employees nationwide were going back to work in offices.8
Increased Safety Protocols
Over the short term, the office is adapting to the pandemic itself, with new safety-related protocols. What is sometimes referred to as the “six feet office” involves reconfiguring existing spaces with features such as arrows and other floor and wall signage that directs traffic and helps enforce social distancing. It also involves reducing the number and proximity of desks and workstations, erecting plexiglass barriers where social distancing is not practical, mandatory mask wearing, restricting the number of persons who can be in confined spaces such as elevators, meeting rooms, employee kitchens, and lounges, and requiring employees to schedule specific day and time slots in the office to minimize the change of advertent overcrowding. Other changes include an increase in hand-sanitizers and touchless doors that open and close by use of sensors. Especially in more temperate climates, there has been an increase in outdoor work areas. Some companies are requiring employees to complete a health evaluation at the beginning of the workday and even have their temperature checked, and some are offering on-site COVID testing.
Moving forward, there will be new standards for workplace safety and cleanliness, especially concerning airflow and air purity. But with COVID vaccines reaching more and more Americans, many of the measures cited above will likely prove temporary. The more enduring change may be in the way we utilize our offices.
Repurposing the Office for Collaboration
Increasingly, companies are questioning whether large, centralized offices are necessary, as opposed to utilizing a number of smaller footprints—perhaps geographically distributed to better suit the needs of the workforce—where in-person collaboration can take place. Instead of skewing toward individual offices, cubicles, and work stations, the corporate office of the future might favor space designed for safe and productive collaboration and for the onboarding and training of new employees. Already in the pandemic there has been a 15% increase in the use of office space for collaboration.9
Repurposing office space to be more decentralized and collaborative can help complement remote work. It might also save money. The flexibility to utilize various kinds of real estate—owned space, leased space (both standard and flexible leases), flex space, and co-working space, together with office repurposing and reconfiguration, could help reduce real estate costs by as much as 30%.10 That alone might be reason enough to reexamine how your company looks at its utilization of office space.
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Sources:
- “3 Ways Covid-19 Will Permanently Change The Future Of Work,” Forbes, June 2020: https://www.forbes.com/sites/falonfatemi/2020/06/03/3-ways-covid-19-will-permanently-change-the-future-of-work/#28dcf7b065b1
- Ibid.
- “Covid changed how we think of offices. Now companies want their spaces….,” CNBC, March 2021: https://www.cnbc.com/2021/03/10/1-year-into-covid-employers-rethink-offices-and-function-matters-most.html
- “Tech companies gobble up office space,” Axios, January, 2021: https://www.axios.com/technology-companies-office-space-cb7ffed2-b611-4b51-9c7e-3acbe1b1f7a4.html
- “Covid changed how we think of offices. Now companies want their spaces….,” CNBC, March 2021: https://www.cnbc.com/2021/03/10/1-year-into-covid-employers-rethink-offices-and-function-matters-most.html
- Ibid.
- “Employees could be heading back to the office sooner than they think,” CNBC, April 2021: https://www.cnbc.com/2021/04/02/why-getting-back-to-work-may-happen-quickly-with-covid-vaccines.html
- “Covid changed how we think of offices. Now companies want their spaces….,” CNBC, March 2021:https://www.cnbc.com/2021/03/10/1-year-into-covid-employers-rethink-offices-and-function-matters-most.html
- “Everything We Thought We Knew About Office Space Use Before COVID Was Wrong,” GlobeSt.com, April 2021: https://www.globest.com/2021/04/07/everything-we-thought-we-knew-about-office-space-use-before-covid-was-wrong/
- “Reimagining the office and work life after COVID-19,” McKinsey & Company, June 2020: https://www.mckinsey.com/business-functions/organization/our-insights/reimagining-the-office-and-work-life-after-covid-19#
