Since the pandemic has changed our lives, businesses and their employees have shifted to remote work. But as we move forward and try to recover, does this shift herald a permanent change? Are employers better off canceling their leases for commercial space and going all-in on the virtual route? Or is there a better alternative that should give you pause before deciding on where to move your office space?
A mixed outlook for real estate
The effects of the pandemic on real estate have been uneven. In the residential market, the scenario has tightened up in favor of the sellers. Property owners are under no pressure to sell. Amid the threat of Covid-19, they may even be reluctant for now to let strangers view their homes.
This effectively takes listings off the market and narrows the inventory. Meanwhile, favorable interest rates from the mortgage companies are encouraging buyers to snap up a good property as soon as they see one.a
On the other hand, commercial real estate is subject to far more uncertainty. Occupants are under no pressure to renew. Many small businesses have downsized or temporarily ceased operations, with no definite timeline for resumption or recovery.
Meanwhile, developers can continue to hold out on the current prices, knowing that larger companies with more liquidity will continue to seek out prime office space. They are banking on a return to normal, which will minimize the effects of current vacancies.
Not all work can be remote
All of this is tied up with the long-term impact of the current collective shift to remote work. If you’re a business owner, it makes no sense to pay a premium to lease commercial office space when most of your workforce is getting things done from their homes.
In theory, remote working arrangements are beneficial to both employers and their workers. Businesses get to save money on floor space and energy consumption. Employees save on the time and cost of traveling to work each day. They enjoy greater flexibility, which boosts morale, improves productivity, and ultimately drives better results for their employers.
And yet the results in practice haven’t painted such a rosy picture. Apart from the fact that not all jobs can be done remotely, teams might encounter several issues when working outside the office environment. These can limit effective productivity and have adverse effects on individual well-being.
A study conducted by Gensler’s Research Institute reflected that many workers are struggling in a home office setting; only 12% wish to retain such arrangements moving forward. Over half of the employees surveyed have experienced difficulty collaborating. Younger cohorts report feeling lower levels of productivity and overall satisfaction.
Catering to a hybrid workforce
Of course, when it comes to the pandemic, we’re all treading new ground. People aren’t just learning to comply with new measures for health and safety; we’ve all begun to grasp just how much everything has become networked in the modern era.
Businesses are realizing that small changes aren’t enough. They have started to pay closer attention to the changes in consumer behaviors as we enter this recession. Their organizations are being overhauled in order to match the speed of response required to stay afloat in this chaotic new normal.
Employees might not be happy to carry out their jobs by working from home full-time. They are discovering the practical difficulties of separating family time from work hours. They realize that it’s harder to communicate effectively when you’re restricted to online channels. Increasingly, they feel the impact of losing the spontaneous social interactions that take place in the traditional office setting.
Remote work might be here to stay, but it doesn’t have to be an all-or-nothing arrangement. The future workforce could follow a hybrid model. People might not be willing to give up all the benefits of remote work. They might want to work from home on some days, but still report to the office two or three times a week.
In order for your business to stay competitive, attract and retain talent, you’ll have to offer that sort of flexible office environment with diverse options. But you also have to ensure that your office space conforms to new norms of health and safety. That includes strict disinfection procedures and sufficient floor area to allow observance of physical distancing throughout the day.
This could accelerate the pre-pandemic trend towards shared workspaces if such providers can ensure their facilities meet the demands of the new workforce. Or it could give rise to a new sort of commercial office in which colleagues live and work in the same building, making it easier to work safely. Watch out for such emerging trends, and in the short term, keep your options open; avoid making any commitment to expensive office space.