Working from Home Versus the Office: Implications for Property Management

I was part of the World Commerce and Contracting (the new version of IACCM) Vibe Summit this past week, and had a great set of conversations with a number of executives about what the current work environment holds.  A number of comments from executives reflects the challenges that exist between people my age (e.g. the “old guys”) and the newer members of the workforce, in terms of the experience of working remotely vs the office.  I kicked off the call by sharing some of the insights from senior executives’ comments in a recent Wall Street Journal article, on their opinion on whether we will continue to work from home.  For instance, the Netflix CEO noted that “I don’t see any positives. Not being able to get together in person, particularly internationally, is a pure negative.”  Others like Larry Fink, Blackrock’s CEO, observed that “I don’t believe BlackRock will be ever 100% back in office. I actually believe maybe 60% or 70%, and maybe that’s a rotation of people, but I don’t believe we’ll ever have a full cadre of people in [the] office.”  Jamie Dimon from JP MorganChase noted that “I think going back to work is a good thing. I think there are negatives to working from home…We’ve seen productivity drop in certain jobs and alienation go up in certain things. So we want to get back to work in a safe way.”

Tim Cummins, founder of IACCM commented on the research to date.

“In the early surveys that IACCM ran with individuals, we saw that people were really missing the socialization of work, and many were struggling with the dynamic of working from home.  At first the issues that came up were whether they have a suitable working space, is their chair the right height, and those health and safety and personal well-being issues were deemed important.  But people are also discomfited in allowing people into their living room or bedroom, and it becomes intrusive. Over time as we went further into the pandemic, that sense diminished.   In the study we did at the end of June the majority of people did NOT want to go back to work full-time.  (There were about 850 people who responded).  Only a few wanted the opportunity to go back, and most wanted the opportunity to go split time or once or twice a week.   We also found that there is a high dependency on the quality of the technology when working from home, and of course the critical issues like data protection and security are more important in a domestic environment.  A major issue that arose is to make working from home an instrument of exclusion, where some of the big companies used extensive low cost labor destinations who have secure offices, but have not spent the funds to ensure safe working from home. 

People are dependent on talking with and extracting data from colleagues, and data access is a problem.  Business systems often require access based on where the data sits and remote access it is a problem.  People also struggled in dealing with the absence of body language, particularly in negotiations.  People also expressed a loss of those informal cycles of distraction we grow used to, such as going to the coffee machine in the afternoon, which is a critical component of getting to a negotiated settlement.  But faster communication which less formal has some plusses, and people have more empathy when the cat walks across the keyboard!  However negotiation and other areas of communication can be awkward.  This will require thought, guidance, and elements of policy design.”

Next, here are a few great quotes from the individuals on the call.

“I remember in my old corporate days- we used to do management by wandering around, and talking to the stakeholder directly.  That is a risk with the virtual environment –  you can’t become more integrated with the business.  And yet, in my world today, we have been a virtual organization for years, with people sitting where they need to be.  So I think giving people choices on where they want to work is a smart move.  I am part of a corporate headquarters staff – but I don’t sit in in Washington DC, I sit in the Mid West and moving to DC wasn’t required. However, I don’t work from home- I choose to work from a local office of our company, and I’m allowed to do that, and that is a personal choice for me.  I think  I there are benefits to having people there in person, but we should offer our people choices to do so if they want to.”

“What we are seeing today is an extension of what a lot of companies have been doing as more people work from home.  A lot of organizations have been cutting down on their office space for awhile now.  I recall that in our UK home office, we had large L shaped desks two meters across.  Then people began “hot desking”, and we went down to 1.2 meter desks.  Then we moved to central London, which was tighter quarters, and desks went down to 90 cm.  So there has been an on-gong pressure to reduce office space for some years.  The pandemic has accelerated this trend – and it is beyond what most people see working from home.  We now have entire organizations working from home and it has proved to work quite well.  The implications are a complete shift in the market.  We will see rent coming down, and people will continue to want office space, but it will be different, and will involve primarily collaborative working  spaces.  You will want go to the office to work with others, because you can’t do what you need to accomplish by working alone.  But if you are traveling to the office, it could be a short commute, and instead of office spaces being in the city, they will be located outside the big city centers, near the motorways and make it easy to get to.  Will that mean companies will go to short-term leases?  There s certainly a lot of uncertainty,  but if we know now that this seems to be working quite well, we ought to be taking advantage of the property market and restructuring our commercial property for a longer time when rents are down.  We don’t have to wait to see how this will pan out –  there is a good case to look at the future, and we can already anticipate what the future office space will look like.”

“I believe that every individual will need a laptop and their computer will allow them access to everything they need to work. We opened up our office this week for those who needed conference room space, but with schools in flux (some reopening, others not), we naturally assumed that everybody was wanting to get back to the office.  We were surprised when less than 1% of our staff even showed up for a couple of hours!   We are in the relocation business, which is the stepsister of the travel industry, and we were highly impacted.  When companies see they don’t have to relocate employees, and when they think about the tax implications, it is likely that this will have huge implications for both commercial and residential real estate.”