As companies and employees try to figure out where and how work will take place in a hybrid environment, the costs being spent on existing office spaces already built around the 9-to-5, five-day workweek are closely monitored. is being investigated.
Flexibility has become the buzzword for both sides of the employee-employer power dynamic. Workers are reaping the empowerment benefits amid the pandemic and a tight labor market to sustain the personal time that comes with working from home. Companies, fearing the erosion of culture that could increase turnover as well as stifle innovation by having a mostly remote workforce, have tried to get workers back into the office by gently prodding, not pushing. Have tried to meet the workers in between.
The question becomes, how does that affect budgeting and spending on generally expensive workspaces when a substantial portion of your workforce won’t be there every day, if that’s all? Is there an opportunity to cut costs, or do those locations now require additional investment in an effort to attract office workers back to home?
Scott Dassault, CFO of HR tech company WorkHuman and himself a pandemic worker, is seeing change for the first time.
“I always quote Larry Fink” [2022] Letter [to CEOs] Where he said that nothing more than the relationship between employer and employee has been changed by the pandemic; “This is never going to change and we will never back down,” said Dassault, a member of the CNBC CFO Council. Have flexibility.”
For many companies, that means remodeling offices to meet this new normal and employee demands, while still investing in other tools to ensure things are being done efficiently – an effort that Squarely means. Adjusting footage or leases may also cost more money.
“I’m not sure it’s going to be a downside cost,” Dassault said. “I’m not sure people are going to take on less real estate; they’re just going to change the way real estate works.”
WorkHuman is currently nearing the end of its lease at its Boston-area headquarters, and Dassault said the company is looking at expanding its location, which is a “clean slate” to accommodate this new working environment. will provide.
He recalled his time in a job in the 1990s where it was a “football field of cubicles”—a situation where you could “go to work and sit in a cube all day and never interact with anyone.” Were – you could really lose that “connection.”
Dassault said he sees Office being part of what he calls a “collaboration destination,” a hybrid environment where you can work from home on days where you’re catching up on work or email, with Office one such Can serve as location which is “all about the connection.”
“You’re going to see a lot more open spaces, collaboration spaces, conference rooms, meeting rooms, break areas where people can sit and get together,” he said. “It’s going to be focused on connections which I think is clearly positive and that’s growth – it will be about making those connections more meaningful.”
That means investing more in things like gyms, where employees can take physical breaks, or other places that provide places to take emotional breaks or meditate, Dassault said, something he said resulted in “a From the bucket” the cost changes. another.”
“We need to understand and recognize that when employees are home and productive, they have those things, and we need to try to make sure those things are present in the office as well,” he said. .
This puts another strain on investment in digital tools, as there must still be ways for workers to connect with peers, even if they are not in person.
“Companies always talk about how important employees are and how employees are the most important investment – they haven’t always worked that way,” he said. “It’s a good thing that has come out of the pandemic.”
In 2019, people at the company visited offices in San Francisco, New York, Vancouver and Salt Lake City five days a week, said Neil Narayani, chief public officer of fintech company Brex. At that time, “no one used to work from home, as it was seen as negative,” Narayani said. But as the pandemic forced employees to work from home, where they successfully carried out several large projects, that scene changed.
“We recognized very quickly that we were actually able to work more productively and faster, and that video collaboration is a very productive tool when you don’t have to go anywhere looking for an office for a conference room, ” They said.
With the belief that a distance-first approach was the future of work, Brakes bowed. Of the company’s more than 1,200 employees, 45% are completely remote. The company still maintains four office location centers where employees can visit, but the company has changed its approach so that every process is designed for remote workers.
It also changed the way Brex planned its development in those places.
“When you factor out the cost of real estate, we were able to see how many people would come to the office if we made it completely optional, and it was about 10%,” Narayani said. “So, we were able to go 10%, maybe even less, into the real estate option, and then take the rest of those dollars and go toward travel, toward talent development, toward diversity and inclusion efforts, and any Rearranged toward the thing. Improves the employee experience.”
“It turned out to be a better experience for us because the cost of real estate was very high, and those markets are very expensive,” he said.
About a third of the cost of the company’s previous real estate strategy has been put into the company’s new off-site strategy, Narayani said, using other parts of it to pay for four office spaces and other co-working spaces. He is going.
Larry Gadia, CEO of workplace technology company Envoy, said he thinks many companies are looking at ways they can reduce costs right now, an area with office space spending potentially ripe for cuts.
However, Gadia cautions that “people need to be with each other, they need to get to know each other.”
“They need a sense of purpose that is integrated, and you need to bring people together for that,” he said. “How do you bring people together when they’re all over the country? I think a lot of people think they’re going to save money on real estate, but United and other airlines and Hilton and other hotels get it instead. are doing.”
Gadia said that as companies try to manage a tight labor environment as well as other market challenges, more time needs to be spent on “thinking about how to bring teams together”.
“The number one reason most people stick with a company is that they love the people they work with,” he said. “It can be very hard to love people if you never see them because they have turned off their video on Zoom or if they don’t know them at all.”