Don't believe the hype: offices are here to stay

Like many CEOs I have been impressed and a little surprised at how well people around the world have adapted to working from home amid the COVID-19 pandemic. At JLL, we too have realised how effective we can be while not in the office. At one point in recent weeks, 90% of our office-based employees globally were working remotely. As a real estate services company, however, a significant proportion of colleagues work on-site, managing essential buildings.

As governments begin to loosen restrictions and return life to some level of normality, the immediate concern for CEOs today is how to keep employees safe and healthy. In the short-term that means finding solutions that allow social distancing and reduce density in the workplace. In the longer term, the forced mass experiment in home working has many considering the future of the office.

Given how adaptable and productive employees have proved to be, is it now time to shed square footage, as a number of business leaders have suggested? Some have been quoted as saying they envisage much of their employee base working from home permanently, and thus will look to reduce their real estate footprint in future.

While this is tempting, I would caution against drawing swift conclusions before digging deeper into the issue.

Prior to taking medium or long-term decisions about office space requirements, it’s important to find out from employees how and where they want to work. While some of us have the benefit of a functional home office, this is not the case for most. In particular, for those who live in big cities such as London, New York, Tokyo or Hong Kong, many do not have the space or a conducive environment at home to work as productively as they can from an office. Not all remote working is created equal.

At JLL, since the pandemic struck, we have been surveying our employees regularly to understand how they are coping. What we have learned is that there is no single answer or solution to the current workplace conundrum: some are concerned about returning to a shared space, even more said they can’t wait to get back to the office, and many more fall somewhere in between. That tells us our employees want flexibility and choice, and it’s up to us to provide it.

As we navigate the ‘next normal’ it’s worth considering that, in practical terms, unless employees are told to work exclusively from home, employers will need to review how their offices are organized. Despite the open, flexible spaces popular with tech companies, the vast majority of office workers still have assigned desks. If those employees are regularly working from home, it will mean their assigned desks stay empty and that doesn’t reduce space. Therefore, the first step for those companies will be to change to flexible desk arrangements, before cutting their office footprint on the back of increased home working.

We are also witnessing an interesting trend as companies begin their re-entry process. Some are realising they actually need more space given the realities of social distancing. For example, many of the JLL offices now being reopened accommodate less than 50% of their original capacity, significantly below the number of our colleagues surveyed who told us they want to work from a JLL office. This is why a number of our clients are requesting our help in securing additional space.

In this context, the flexible space and co-working sector may stand to benefit in the short-term as it presents a way to tap into temporary additional space and in distributed locations that could potentially reduce commuting for employees.

Finally, as much as business leaders are encouraged by the success of working from home, let’s not underestimate the importance of the office in our business and social lives. Its role in maintaining a vibrant company culture, fostering collaboration, and inspiring innovation and creativity, is not so easily abandoned. These features help a business stay competitive, and attract and retain the best talent. Having the option to work from home is one thing, but only working from home is a completely different proposition.

COVID-19 is forcing us all to change and re-evaluate how we do things. I’m certain there will be more people working from home in the future compared to before the pandemic. This will lead to smaller office footprints for some companies. However, there will also be a need for more space in many office settings, which will lead to an increased demand for space.

While it is too early to make bold predictions in terms of a shift in the quantum of space required by corporates coming out of this crisis, I’m confident the physical office will take centre stage in facilitating interaction, collaboration and, ultimately, employee health, wellbeing and productivity.

The office is here to stay, but its form and function will evolve as it has always done.