*This article first appeared in our Property360 digital magazine
Since the outbreak of the coronavirus pandemic, the corporate world has seen a huge move towards remote working or, at the very least, more people working from home more often.
And considering this trend has been in place across the world for almost two years, there is strong belief that it is here to stay, forever altering the office property market as we know it.
Some professionals are even refusing to return to the office or to accept new positions at companies which insist they work on site.
This presents corporates across the globe with a dilemma, and it is playing out differently from company to company. Some are luring top talent simply by allowing them to work remotely.
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The compromise appears to be a hybrid approach which allows employees to work from home a stipulated number of days a week.
International trends
PwC’s US Remote Work Survey, released in January, found that remote work had been an overwhelming success for both employees and employers, with 83% of employers saying the shift had been successful for their company, compared to 73% in its June 2020 survey.
Fewer than one in five executives say they want to return to the office as it was pre-pandemic. “The rest are grappling with how widely to extend remote work options, with just 13% of executives prepared to let go of the office for good.”
The survey also found that real estate portfolios are in transition, with 87% of executives expecting to make changes to their real estate strategy over the next 12 months. These plans include consolidating office space in premier locations and/or opening more satellite locations.
“Over the next three years, while some executives expect to reduce office space, 56% expect to need more. These mixed findings show that some companies are planning to reinvest the remote work dividend in new ways in order to create a special experience in the office.”
In the UK, recent research released by the CIPD, the professional body for HR and people development, similarly reveals that employers are now more likely to say that the shift to home working has boosted productivity than they were in June 2020.
The figures are, however, lower than their US counterparts, at 33% and 28% respectively. The findings are part of a new CIPD report exploring how organisations can learn from ways of working during the pandemic to make hybrid working – a mixture of working at home and on site – a success.
The CIPD stresses the need for employers to look at flexible options beyond home working, recognising that not all roles can be performed from home.
“The pandemic has shown that ways of working that previously seemed impossible are actually possible. “Organisations should take stock and carefully consider how to make hybrid working a success, rather than rushing people back to the office when there are clearly productivity benefits to home working,” says Claire McCartney, senior policy adviser for resourcing and inclusion at the CIPD.
Employee demands
Another survey, in the US by insurance company Breeze, found that the work-from-home trend as a response to the pandemic has turned into a revolution in how people want to work.
Results showed that:
• 65% would take a 5% pay cut.
• 38% would take a 10% pay cut.
• 24% would take a 15% pay cut.
• 15% would take a 25% pay cut.
• 39% would give up health insurance benefits.
• 23% would give up 50% of their paid time off. • 36% would give up their retirement plan.
• 47% would give up mental health benefits.
• 34% would give up “their right to vote in all future local and national elections for life”.
Weighing in on the remote working debate, FNB commercial property economist John Loos says remote working has been shown over many years to work well, and is getting better as technology improves. What is surprising is that some work-from-home opponents do not see the opportunity for cost reductions.
On his LinkedIn page, Loos writes: “Employees reduce costs through less commuting, time and transport. Companies reduce costs through less office space and related infrastructure.
“On top of this, surveys... suggest that the labour market may adjust in such a way that market-related salaries of remote workers may in future be lower than office-bound employees.”
The potential savings opportunities seem “huge”. “Many employees want better quality of life, and they are prepared to take a pay cut for it. The progressive companies will see opportunity and drive greater work from home. The denialists and resisters will pay higher salary bills and battle more to retain and attract top skills until the market has punished them enough. This will be the continuation of a multi-decade trend and the office property market is likely to battle and ultimately to shrink in relative size as a result.”
Corporate response
Recently, the BBC reported that, in June, Apple chief executive Tim Cook sent out a company-wide memo telling staff they would be required back in the office by early September, and workers would be expected to be present for three days a week, with two days of remote work.
But some employees pushed back with their own letter and some even quit their jobs. This trend has been unfolding in several big corporates in the US.
Others, however, have bucked the trend by offering a full or partial switch to permanent remote working. Some of these corporates, who will no doubt attract top skills looking for such working conditions, include:
Remote working looks to be the way of the future, with some on-site work part of the mix. • Siemens • Twitter • Facebook • Square • Dropbox • Novartis • Shopify • Zillow • Coinbase • Hitachi • Quora • Google • Ford • HubSpot • Microsoft • Reddit