Ken Ashley’s a Cushman & Wakefield tenant rep practicing globally for over 25 years. He lives in ATL and thinks about real estate. A lot.
I get asked two questions a lot: When do you think people will go back to the office, and do you think we will need less space now that everyone is accustom to working from home in their athleisure wear? My answers: It depends on where you live but likely between summer to early fall, and yes, we will need less space in the short-term. I would, however, counsel you against returning to the office in that leotard.
After a year of figuring this work from home thing out, many executives are convinced that most of their workforce needs to come to the office at least some of the time. It is true that American workers in 2021 will have the flexibility they could have only dreamed of in early 2020. That being said, it is widely understood that 100% remote won’t work for most job types. Being together in person is a deeply embedded need and part of the human experience. Plus, it’s just good business.
As a friend of mine said recently, “Some companies will get really excited about dumping all their office space until they see their employees fleeing to competitors and their profits acting as if they have Covid-19. Then the sticks and bricks will get a little more focus from management.”
What Is Everyone Else Doing?
As part of my job, I’ve worked in the world of site selection for over 20 years. Site selectors have a saying: “The corporates are like sheep following each other around.” We know that locating a company in Industry A near other like-minded employers is a tried and true success strategy. There is safety in numbers.
This phenomenon is very true in the return to the office as well. “Did you see what Google just announced? What is Apple doing? What about XYZ company in our town?” In this vein, I saw where Twitter announced the results of a survey of their (very smart and highly compensated) employees wherein they asked employees about their preferred method of working. Not surprisingly, the vast majority wanted the flexibility to work from home and the office.
I predict that we will continue to see announcements that reinforce a hybrid approach to knowledge work. “Yes, Mr./Ms. Employee, you can work from anywhere,” they will say, “but I need you to be in the office 12 days a month for meetings. And please at least wear jeans.”
This brings me to the headline of this article. How do companies now provision office space when the work habits of Americans are so uncertain? Executives have complained about underutilized office space well before the pandemic. Employees were out on vacation, business travel or sick leave and as a result, there was usually an ocean of empty desks during certain days of the week. I’ve walked through spaces with CEOs and watched them fume at the money wasted on empty desks.
It turns out there is a very helpful parallel to this kind of demand problem: restaurants. Most eateries — in normal times — deal with at least two surges a day. They have a lunch and a dinner rush. Some even deal with breakfast as well. Consumers, however, have adapted to the reality that the restaurant real estate will be more crowded at certain times and we plan accordingly.
Apps allow us to reserve a table, our own habits and experience help us to know that slipping in early or late are options, and sometimes we have to choose another location because our favorite spot is simply too full. What if we managed office space in the same way? Corporate leadership could schedule teams on certain days of the week to help manage demand. For example, the sales teams and consultants that will be on the road again soon could come in Monday and Friday. HR, real estate and finance could work from home those days. Flip this on the other days, then rinse and repeat.
For years, the large accounting firms and many consultants have allowed workers to schedule locations like you would make a restaurant reservation. When you show up in the Phoenix office, the rest of your team knows where you are, and the office services team sets everything up just to your liking. You have access to inspiring dedicated desk options, bookable meeting rooms, outdoor spaces and nooks for short, small meetings. Big smile.
Zoom out on this scenario and we can gather metadata to see very clearly what demand is and when it will be highest. This will allow real estate planners to build what we need and not anymore. Workers will also literally vote with their feet; the awesome suburban Phoenix office may get lots of traffic, but the older downtown location may feel a little lonely.
Employees will also start to shape behavior similar to planning for dinner on Valentine’s Day. We know when offices are going to be busy and that we may not be able to get in on high-demand days unless we plan in advance. Real estate teams that use demand management in their planning are able to tightly manage real estate costs and keep utilization of space very high.
The thinking that a company has to provide a desk for every worker all the time is so 2019. Going forward, smart corporates can right-size the office, and their workers can learn how to adapt to this new ecosystem. Companies get to reduce their footprint over time, and employees at home get to keep wearing gym clothes under their “Zoom shirts.” Everyone wins.
Speaking of, if I’m going to beat the crowd, I better get on that outdoor dinner reservation for Friday night with my lovely bride. I promise I will wear my nicest jeans.