Pandemic Impact on the Workplace of the Future
October 28, 2020
Darren Griffith, a Director at EisnerAmper and Jennifer Samel, Tri-State Regional Workplace Manager for Newmark Knight Frank, discuss the evolving impact of the pandemic on the workplace, as well as implications for the future of the office market.
DG: So prior to mid-March, 2020, it was a common belief that having employees working from home would be much less productive. I think a lot of employers were worried about people doing their laundry instead of doing the work they were supposed to. But now that we've had a chance to be forced into the experience of working from home, some of these employers are seeing that working remotely due to COVID may work out. Have you seen organizations see an increase or decrease as far as productivity?
JS: You know, I think most organizations have found that they are really surprised by how productive they've been, especially those who were not really familiar with working remotely or from home before and felt like it couldn't be done. So it's been overall a positive experience. But really, I think it's influenced by two things. One is an individual's function or position and how much their job lends itself to being able to work remotely. I think it's been less about those management concerns that you brought up.
And then the other thing is, it's really important to remember that right now, we're not in a typical mode or model of remote working or working from home. We've sort of been pushed into this situation where we all have personal elements that we're dealing with at the same time. And so that has created two extremes of experiences for employees, a lot of the times. Where they either really struggle or really thrive. And so I think it's going to be important for organizations now that they've seen largely that it can work to find the right balance going forward. In general I think most of the concern at this point again, is not about focus or productivity, but about loneliness and mentorship, affecting productivity. And what it means for career advancement as a young professional, if you're not in the office. And so those are things that we're going to have to broach carefully as we go forward.
DG: That makes a lot of sense, just piggybacking on what you were discussing as far as employers to connect with some of their younger employees, it's hard to kind of get close to some of your colleagues when you're separated. What measures have you seen organizations take to instill a sense of community among their employees that they would usually get from being in the workplace together?
JS: Yeah, so I think across the board folks have found that the video component really helps. Especially for those organizations that have in the past also been more or global in the folks that they work with across their portfolio. Because it really brings people into the room. You sort of, don't have to worry about that dynamic of who's sitting in the conference room and who's just on the phone and never gets to speak. So I think there's some real connection that's happening there as you've mentioned.
And also I think a lot of it's coming from, as you said, the experience that we're going through together. It's a wild one for everyone. We get to see different parts of people's lives and we're craving that connection. So people are connecting, but I think overall the culture question is a big one. And some groups are trying things like group meditation or led gym sessions, happy hours, et cetera.
But this is where video really sort of breaks down from that social aspect, to have so many people on at once who may not all have those connections and experiences. And so we think that while culture will be a huge challenge going forward. The firms that are succeeding are the ones that are focusing on those middle manager relationships with their employees, keeping teams integrated and really finding ways to be ad hoc in their collaboration together. Not just scheduled one Zoom call after the other. And then clear leadership messaging and approachability. If you're not in the office to pass by that director's office and let them see you, it's really important that the senior leadership make themselves available and make themselves seem approachable and human throughout this to really bolster the culture as we all go through this together.
DG: Now, where do you see the future of the workplace when it comes to both office and remote working? And I think it's going to have to be some balance in between those. I don't think it's going to be all work from home. And I don't think it's going to be necessarily office, but I'd like to get your take on what your thoughts are.
JS: Yeah. So quite honestly, this is a huge question to tackle. And we could have a whole podcast on just this part of the conversation. But I think what we're seeing is that as I said in the answer to the first question that you asked me, it's going to net out somewhere in the middle for most organizations. It's going to be about finding that right balance. There's a lot of talk right now about shift work and those types of things. And, and that has some place for some functions in some groups. But the majority of folks aren't going to be able to schedule their work that cleanly. That on Tuesday, Thursdays, I'm going to do all my collaborative work so we're going to repurpose the office. And on Wednesday, Friday, I'm going to stay home and do all of my heads down work. It's not usually that clean.
So I think flexibility and balance are going to be important. I think what's really going to help us with this is sort of the tech integration that we're all seeing, expectation changes, and just a little bit more of a fluidity across the board in terms of when you're in the office and when you're out. But one of the most important things that folks are grappling with is how do we still make the office appealing. If people don't need to be there for a desk and an internet connection anymore, what really is the purpose of our real estate along the way? And where is that balance come into our policies around remote work?
DG: As you talk about, are we going to need all that space, are they going to make it more attractive for people to come in? But where do you see that next step in a new workplace model, will employers take less space or will they add space in the suburbs just to be closer to employees? And what are your thoughts on the lease space or the office space in general and how much?
JS: So the suburb question in particular is a really interesting one. And is sort of a subset of your question, right? It will still vary by organization. Some will disperse more into a more distributed model. But I think a lot of this is going to be driven by how long unemployment continues and drives labor into different places than it might be right now. How long it is until we have a vaccine and people feel comfortable using major modes of transport, et cetera.
And so, because all of those are really long-term leverage points. And because as you said, the life cycle of real estate is pretty long we're not currently encouraging our clients to make long-term impact decisions. Unless they're really looking to change their business model. So some people are signing short-term leases to get folks together right now. And a lot of conversation is coming up about this new idea of a hub and spoke model of your portfolio.
But it's really important to remember this is not actually a new idea. Hub and spoke has been a portfolio strategy for a long time. And if organizations are going to implement it, whether it be because they're following labor or what have you.
It still has to be right for their business operations. You can't just sort of disperse just for the sake of dispersal. And so I think, and again, it's going to land somewhere in the middle. Most organizations are not just going to dump all their space or grow exponentially in one place.
DG: Yeah. And it's hard to do that. Now, the workplace policies, I think there's going to be some things that are going to be significantly changed forever, whether it's hygiene or the amount of travel. What do you predict that are going to be the most significant ones?
JS: Yeah, I mean, I think certainly travel will be impacted maybe more in terms of a business essential component. But assuming we go back to some sense of normalcy or being able to make those experiences safe for folks, I think travel will still have a place in business. Though, we're seeing virtual connection works really well now in a lot of circumstances. I think hygiene will continue to be a focus. As you mentioned, people aren't really going to abandon that even if there is a vaccine. It will affect behavior and navigation of the office. But I actually think the most significant changes we're going to see are around flexibility and mobility, management policies and what employers are expected to provide to their employees if they're going to have remote work set ups. And what the expectation of employees and of employers is in that situation.
DG: Now, is that going to people to do more work closer to home, or kind of be more niche in what they do. Or now that we have the remote capabilities now that we have video conferencing, that is just more akin to how people do their business these days, do people expand out, do people look, do they look to other parts of the country? Do you see a change in strategy for some of these businesses?
JS: So I think that the organizations that are currently global will likely stay that way. They might have some more redundancies locally in their processes. But they'll still have global reach. I think the organizations that are not global in any way right now, this won't be the thing that necessarily pushes them over the edge from a business positioning standpoint. But what we are seeing is people are thinking about their employment models and their talent acquisition models really differently. And how they can get the best labor, no matter where it is.
I think some folks are pivoting their business strategy in response to COVID, but it's not long-term. And instead it's really about understanding the role of a business purpose in the larger world and the role that real estate plays. And I guess the last thing I'd like to say about that, Darren, is all of this has really brought back into focus, a concept that strategists like me have talked about for a long time. And that's the importance of agility for a business. Whether that's in your real estate, in your business models, et cetera, right? This has put the focus on needing to be able to pivot, expand, and contract and work in all kinds of different ways no matter what comes next.
DG: No, that's fantastic. Jennifer, thank you for taking the time to share this valuable information with us. And thanks to our listeners for tuning in to Breaking Ground. Join us for our next podcast. Visit EisnerAmper.com/RE for more real estate news.