Is Your Company Prepared For The Shifts Impacting The Workforce And Workplace?

Chief Executive Officer

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Covid-19 has transformed the dynamics between work, workforces, and the workplace. The early months of the pandemic (May-June 2020) saw many companies focused on reentry planning, determining how and when they could get office workers back into buildings. Having established playbooks for health and safety, floorplan modifications, lobby management, and new policies for reentry, many companies have since turned their attention to more strategic matters.

Along the way, several workforce and workplace truisms—long held dear by many organizations— have been cast aside: it turns out that many offices can keep functioning with large numbers working from home, some employees may actually prefer remote work, and providing an assigned workspace to employees might contribute to less office utilization, not more.

Discussions with hundreds of companies during this period have revealed several shifts in workforce and workplace dynamics. While many offices have returned with 10 percent, 25 percent, or even higher occupancy, target dates for more substantial reentry waves continue to slip. Management teams would be wise to use this time to assess each of these shifts to inform plans for how the company will emerge more smoothly from the pandemic.

Shift 1: Increased work from home is here to stay. Many employees have demonstrated they can be effective working from home. The sentiment on working remotely continues to evolve, with some workers expressing increased engagement while others are burning out. From our discussions with companies, the trend appears to be a significant uptick in the percentage of employees that would prefer to work from home long-term. A May 2020 Gallup survey revealed that half of remote workers indicated if it were up to them, they would continue to work from home because they prefer it.1

Shift 2: New talent markets await. If the enterprise embraces remote work, especially for hard-to-find positions, it may open up new sources of home-based talent locations not close to an existing office. Word to the wise, however: there may be potential tax and regulatory issues associated with hiring workers in states where the company doesn’t have a presence. Also, recruiting, on-boarding, and training all needs to be managed differently for remote workers, bringing us to…

Shift 3: Managing remote work requires work. Mastering a distributed workforce means being disciplined and purposeful about strengthening culture, improving learning and development, and monitoring the right performance indicators along the way. New sets of management behaviors must be developed and then taught to leaders across the enterprise to help teams focus on outcomes, not effort. One of the biggest challenges is to deploy tech-enabled enterprise collaboration that fosters spontaneous connections and spurs innovation.

Shift 4: The corporate footprint is probably suboptimal. The pandemic has accelerated reflection about the purpose of the office, including why and when employees will choose to spend a day commuting and working outside of home. This, in turn, has driven an evolution of how some companies are thinking about their footprint, such as concentrated versus distributed, high-rise versus low-rise, and suburban versus urban. Furthermore, many workers have relocated, some temporarily and others permanently. Redfin has noted that suburban and rural home sales are on the rise.2 Given all of these dynamics, the corporate footprint needs a location and talent access strategy that balances cost, accessibility, flexibility, and risk.

Shift 5: Post-pandemic, many companies will likely need fewer seats. Before COVID-19, the average daily office utilization was about 63 percent3 , with rates even lower in the consumer business, financial services, and utility industries. Postpandemic, if companies have more remote and hybrid workers, they will need even fewer seats. Untethering workers from assigned locations can further reduce how many seats are needed on an average and peak day. Savings in real estate requires investment and a little patience; most workplace strategies will require some reconfiguration and leases will often (but not always) limit how early savings can be captured. They key is developing the new strategy to improve the employee experience while also enabling cost reduction. If the company’s culture is ready for one of the several varieties of a tech-enabled flexible workplace, it can analyze how to optimize the post-pandemic use of space in order to re-densify and reduce the total cost of occupancy.

The impact of each of these shifts will be different and nuanced for every company; some firms will seek to return to a pre-COVID-19 world with little change to their workforce or workplace strategies. Others are speaking openly about the “Future of the Office” and questioning whether employees would ever need to return. For many companies, their reality will lie somewhere in-between, trying to balance what worker surveys are revealing about remote work and return-to-office while preparing to increase the staged return.

In the longer term, solving for the optimal and flexible set of workforce and workplace solutions requires commitment from the top, crossfunctional analytics, and collaboration between HR, Real Estate, IT, Finance, and the business functions. Getting it right can unlock an improved employee experience, access to new talent, and significant cost reduction opportunities that can help the enterprise thrive.

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