The State of the Workplace – Cresa Viewpoint
Spring 2022
How We
Got Here
It’s hard to overstate the transformation that work has
undergone during the pandemic. While some progressive organizations had
implemented remote work policies previously, the vast majority of professional
employees were in a routine of traditional commuting and in-office working, and
found their lives and schedules upturned in 2020.
The national shutdown in March 2020 was abrupt and
unsettling, and we’ve seen significant effects on both sides of the labor
market. Employers had to scramble to upgrade and distribute technology tools
and resources, learn how to manage remotely, and ensure business continuity in
an uncertain world, while employees had to adapt to ill-equipped “home offices”
with partners, children, family members, and roommates as their new coworkers.
Many U.S. workers were sorely unprepared for this
adjustment. Pew Research shows that, out of all employed adults with jobs that
can be done from home, only 20% worked remotely before the COVID-19 outbreak.
Now, after nearly two years of full-time or part-time remote work, over half of
those adults want to continue to work from home in the long term.
While the pandemic is still far from over – some major West
Coast players predict it will be another 2-3 years before the COVID-19 dust
definitively settles – we’ve seen meaningful shifts in the way work is done.
These emerging shifts and trends offer insights that we believe will have
long-lasting impacts on the state of the workplace.
Upping the Ante:
The War for Talent
Employees are leaving the workforce in droves. This reality, catchingly coined ‘The Great Resignation,’ is playing out across all sectors and markets with no apparent end in sight. There are a number of drivers behind the widespread attrition, from shifting personal priorities to toxic work cultures. With 4.5 million people having quit their jobs by the end of 2021, the job market is on fire.
Although the quit rate continues to rise, hiring remains on
an upswing, shifting the balance of power in favor of the employee. Workers are
taking advantage, leveraging organizations’ hiring woes to negotiate for higher
compensation, increased flexibility or permanent remote work, and expanded
benefits beyond the traditional 401K or PTO. With international political unrest
and economic instability looming large, it is unclear when the power balance
will be restored. But for now, workers are in the driver’s seat and they know
it.
As of
January 2022, there were 11.3 million vacant jobs in the United States. ~Us Bureau of Labor Statistics
Fits & Starts: Coordinating Workplace Re-Entry
As the impact of the latest variant subsides, organizations are ready to put COVID-19 in the rearview and re-open their workplaces, either with hybrid work policies in place or on a fully voluntary basis. While many leaders have been eagerly awaiting this turn in the tide, employees are skeptical of the value of the workplace given the high level of productivity and increased work-life balance they’ve experienced working remotely. Through surveys, focus groups, interviews, and other data analysis, we have identified six barriers that are driving the resistance to return to the office.
Without question, commuting to the office is the primary
deterrent in the return to the workplace. Many workers do not see the value in
spending precious time at the beginning and end of the day on a long and often
unpleasant commute when that time could be used productively for work or
personal tasks. These factors, among others, are leading employees to ask: Why?
Why do I need to return to the office when I am more productive, happier, and
healthier at home?
Where We’re Going
What’s So Great About the Office, Anyway?
As employees question the role of the workplace, organizations are struggling to respond. And in a highly competitive market, ambiguity will not suffice. Now that their employees have come to appreciate the convenience of working from home, companies need to select the right real estate partners and make decisions to transform their workplaces into purpose-built destinations that promote engagement, collaboration, socialization and a reconnection to the organization, its people and culture. Based on their teams and work preferences, organizations should create compelling spaces that rival at-home offices in comfort and convenience, but also offer intangible features that cannot be found at home, like colleague camaraderie, culture, mentorship and more.
What Does a Hybrid
Workplace Look Like?
Workplace leaders have realized that the office may never be at 100% capacity again, leading them to question the need for the physical workplace and the role it plays within the organization We know that hybrid schedules – most of which entail employees working in the office Tuesday, Wednesday, and Thursday– account for 30% less onsite attendance. This does not necessarily equate to a 30% reduction in space. Less dense floorplans are making a comeback and layouts that foster collaboration with living room style lounges and increased meeting areas may negate potential square footage savings from a reduction in individual workstations.
New Priorities Are Driving Decision Making
We have learned a lot from the pandemic. The overwhelming outcome in the corporate real estate realm is a renewed commitment to talent. With organizations scrambling to attract and retain the right people to fuel their businesses, three priorities have come to define the future of the workplace:
Flexibility in Focus
As we all wait for market conditions to stabilize, hold off
on making significant changes around downsizing or heavily reconfiguring your
office space until you have a better sense of your workforce and workplace
strategy in the long-term. Knowing that a hybrid workforce doesn’t always
translate to a reduction in square footage, experiment with collaboration and
conferences spaces to understand how your teams will work. Use modular
furniture as short-term space solutions and as a pilot program to assess
utilization and determine future needs. Finally, consider a short-term renewal
if necessary to avoid getting into a situation that won’t serve your
organization in the long run.
Frictionless Technology
Most organizations have not perfected a hybrid work
arrangement, and the answers are unique for every organization. Survey
employees to find out their pain points while working in the office, at home,
or with distributed coworkers and leverage technology tools to help reduce some
of the hiccups. You can pilot tools to streamline and improve communication,
track ideal commute times, help find lunch spots, and reserve your favorite
seat in the office. Some tools are equipped to improve communication and
distribute impact surveys that help with assessing and improving your workplace
culture and the employee experience. Communication is key and providing
solutions to daily challenges, both professional and personal, is paramount.
Exceptional Experience
Now more than ever, organizations need to invest in the
employee experience. The employee experience goes beyond a candy bowl or a beer
fridge – it encompasses all touchpoints with the organization. Enhance your
services and amenity offerings to bridge the gap between onsite, hybrid and remote
employees. Try blocking out calendars during the lunch hour, establishing
regularly scheduled check-ins with managers, and expanding communication
channels to connect with leadership and create a culture of inclusivity and
wellness. Most importantly, provide comprehensive training sessions to help
your teams adapt to a distributed workforce environment. These sessions might
include an overview of communication tools and protocols, remote management
best practices, or tips for hybrid mentorship. Change can be complicated, but a
thoughtful transition and communication approach can minimize friction.
Employees who feel informed tend to feel less anxious about the hybrid
experience, which leads to greater employee satisfaction and productivity.
The future of work has received unprecedented media
attention in the past two years, and there is a lot of noise in the market. The
silver lining is that this has afforded us access to more commercial real
estate data than ever before. Organizations across industries and markets are
assessing their space utilization, workstyles, collaboration metrics, and user
types. Let the data work for you. Real estate decisions should no longer be
purely financial transactions but should look holistically at how space will
not only support the business goals and objectives but also its culture and
people.
End of Article
I specialize in providing comprehensive real estate services,
exclusively representing corporate tenants on all commercial real estate needs.
Commercial Tenant Broker
2 Bethesda Metro Center, Suite 900
Bethesda, MD 20814
301-842-6542
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