With Moving Forward: Workplace 2.0 in the books, we can now take a collective sigh of relief and reflect on a great virtual summit. First, let me start by saying thank you to all the industry leaders who contributed to a very successful summit, which proved to be extremely valuable to everyone involved, especially attendees.
The event surpassed even our wildest expectations ̶covering two days with more than 6 hours of presentations, roundtables, and thought leadership–and attended by hundreds of participants. Clearly, the challenges facing our industry as we return to work and plan the office of the future are real and companies need help. We’re glad to do our part.
Alright, let’s dig into the key takeaways from Moving Forward: Workplace 2.0.
ONE: Working from Home is Not for Everyone
Pranav Tyagi, Tango’s CEO & President, cited a number of conflicting stats regarding the unprecedented experiment of working from home. According to the Gallop poll, 25% of respondents worked from home, at least some of the time, pre-crisis. That number jumped to 62% during the crisis. No surprise there. A McKinsey research study found that 80% of people have enjoyed working from home, 28% felt as productive as being in the office, and a full 41% said they were more productive. To put this in context, nearly 70% of the respondents felt they were at least as productive as they were in the office while working from home. Does this mean the death of the office environment in the future?
While those stats are interesting, a recent U.S. Work from Home Survey conducted by Gensler found some underlying trends that suggest the office is certainly not dead. In their 2020 Work From Home (WFH) Survey, only 12% of U.S. workers want to work from home full-time, and a full 70% wanted to work from the office the majority of their week, even though 70% felt they were at least as productive at home. Also, somewhat surprisingly, younger generations feel less productive at home–these are the people who are better equipped with technical skills. And what is also clear across generations of workers is that they expect, and want, a much different workplace when they do return to the office.
Watch Pranav Tyagi discuss the current state of working from home here.
TWO: Recent Real Estate Strategies are Not Well Suited for a COVID-19 Workplace
Prior to the pandemic, conventional wisdom believed that offices were critical to productivity, culture and winning the war for talent. Under this line of thinking, companies wrestled for prime real estate in the central business districts of New York City, San Francisco, Chicago, Seattle and many other urban centers. And these offices were dense by design, packing people into open floor plans, hoteling or free addressing and were leveraged as co-working sites. In conjunction, we saw a meteoric rise of companies like WeWork and others offering shared/collocated workspaces.
Unfortunately, these strategies may very well assist in a more rapid spread of the virus and must change, at least in the short run. Here’s the swift change from pre-COVID to post-COVID real estate strategies in a few areas:
Watch Pranav Tyagi discuss real estate strategies for a COVID-19 workplace here.
THREE: One Thing is Clear – Our Response to COVID-19 Requires a New Breed of Technology Solutions
To respond to this unparalleled change we are all facing, one thing is crystal clear: the traditional technology tools many companies still use today are woefully outmatched for the challenge ahead. These legacy tools are not up to the challenge the pandemic has posed. They are often incomplete, only covering some of the location lifecycle. They are complicated, hard to use, and have shown little ability to introduce new functionality or innovate. They are shortsighted in the sense they lack the ability to facilitate strategic planning and provide poor visibility into what is happening day-to-day or forecast what may happen in the future.
Surviving, and ultimately thriving, in a COVID-19 environment requires technology that:
- Is complete in the sense it covers the entire real estate and facilities lifecycle
- Is straightforward and easy to use
- Uses advanced technology such as AI and Machine Learning, that not only executes the plan, but helps create it
- Is built on a modern technology infrastructure
FOUR: When Planning the Return to the Office, Keep it Safe, Simple and Supportive…Kind Of
According to research from Verdantix, planning the return to the office is clearly about safety first, and facility managers have a lot to learn from some of their health and safety colleagues. They should be spending time with them, learning about some of the hazard frameworks that those types of people are regularly using, particularly the hierarchy of controls framework, which encourages people to think about the best ways of controlling hazards at the workplace.
“What we have seen from some of the early reopening strategies, both in the retail and office sector, is that some of the programs just feel really complex with lots of moving parts”, commented Susan Clarke from Verdantix. “We’ve already seen some of the large big-box retailers scale back some of their complex appointment setting initiatives, because they weren’t effective, and they were just adding too much complexity.” Adding to Susan’s point, Joshua Cushner from Arup said, “I agree the wayfinding, the simplicity, the ability to easily understand what you should be doing is going to be critical to get the risk-averse people more comfortable. There’s a laundry list of things that our return to office committee is dealing with right now. That’s the complex side of it. A firm like ours that has offices all over the place, the community prevalence of the virus is completely different in each location. And in some locations is decreasing and in some locations increasing.”
Watch Susan Clarke and Joshua Cushner discuss the return to the office here.
FIVE: Landlord vs. Tenant Responsibility – It’s All About Trust and Communication
The respective responsibilities incumbent upon landlords and tenants were touched on in multiple sessions, and based on the dialogue, it is clear that the line of responsibility is opaque at best. According to Joshua Cushner at Arup, the required level of collaboration is high, and often difficult to reach. “We share our building with 15 companies. The capacity to organize what 15 tenants are thinking is an impossible task for a landlord. You get these situations where they throw their first draft at us. We throw things back to them with questions. We actually have a couple of architects and engineers in our building. I’m sure we’re especially annoying to the landlords. We want to know about their plans. We want to see their plans. We want to vet their plans.”
And tenants, depending on size, are largely at the mercy of landlords. Joshua continued with, “But the tenants are hugely dependent on landlord’s getting their lobbies right and they’re building HVAC systems right. And there’s a huge amount of trust. Most firms are not engineering firms and won’t know to tell them the fraction of outside air and filtration and things of that nature. So there’s a massive amount of trust that landlords are going to have to come through with this. But then, how they respond when reality happens. The best-laid plans are really just a starting point to learn here. But tenants are, maybe even more so than historically, really putting blind faith and trust into their landlords that they’re doing the right thing in many ways.”
Watch Susan Clarke and Joshua Cushner discuss the return to the office here.
SIX: Employee Safety, Wellbeing and Communication is Job One
One of the most consistent sentiments, both in our research and echoed by the panelists throughout Moving Forward: Workplace 2.0, is the clear priority on employee safety, wellbeing and trust. Kevin Fossee from PwC hit on this point when discussing the initial return to the office. “I think there’s a preliminary piece to this that’s really around checking in with the employees, and understanding where they’re at, how they’re feeling, can they come in. This is in part health and safety, and in part planning and employee morale.”
Fossee also highlighted the planning challenges of the return to work. “I’ve read a lot of stories about folks allowing 20% – 25% of their staff back into the office. We’re only actually seeing, on average, about half of those folks take advantage of that and come in. It’s hard to plan what you can do in your space if you actually don’t know who can come in and when they’re coming in.” He highlighted why having tools can help you assess how employees are adjusting to the return to work. “A simple thing like employee check-in apps, surveys to see how they’re doing, how they’re feeling, if they’re feeling like they’re productive or they can’t come in because they have childcare and other considerations like that.”
Brett Sample from Tango offered a potential solution to the question, “will you be in the office?”. “Reservation functionality is something that might become ubiquitous. Any time you want to come into the office, you do it via a reservation, whether it’s to a designated space or any specific space that’s been opened up with the correct social distancing and other considerations. I think it can accomplish two things. One, it can tell you how many people are actually planning on coming into the office to keep a little bit better eye on what that maximum threshold is, and two. everything that goes along with that, even the cleaning thereafter.”
Watch Kevin Fossee discuss employee safety and wellbeing in the workplace here.
SEVEN: We Don’t Know What We Don’t Know, So Focus on Learning
Let’s be honest, we really do not know what we’re dealing with when it comes to COVID-19 and the work environment. Experts have weighed in and are providing guidance that we should all listen to, but the reality is we need to use the initial return to the office as a learning opportunity. We need to learn office choke points, learn what activities or practices promote the spread of the virus and which ones dampen the spread, learn how to work in a constrained environment, learn, learn, learn. If we don’t learn we will be less successful at protecting our employees and we won’t be able to design the workplace of the future.
During the Workplace of the Future roundtable, Francisco Acoba from Deloitte highlighted this reality. “As we’ve been talking to clients, and we’re working through this very topic with a lot of organizations, what we’re finding is that there are more unknowns than knowns. There’s a lot that we need to figure out over the next 3, 6, 9, 12 months to really understand what the workplace of the future or that new normal is going to look like. How are people going to use the office, what’s the purpose of being in the office going forward? To what extent are people going to be comfortable coming back to the office? Many questions around potential demand.”
He also talked about learning in the form of capturing data so companies can make data-driven decisions. “Thinking about all these things and putting them together into a plan over the next, again, 3, 6, 9, 12 months and capturing the data, leveraging the analytics and really analyzing, so you have a data-driven response a year from now. But right now, there is a lot that we just don’t know. I think that right now, being able to put a program in place that is looking at leading practices, loading the information and materials that have been provided by government agencies and industry associations, and putting together the various scenarios for what that may look like for your organization going forward is going to be key, so that you can learn from that over the next year.”
Watch Francisco Acoba discuss capturing data to make more informed decisions here.
EIGHT: Work Going Forward Will Require Flexibility at the Role and Individual Level
In a lot of cases, returning to the office will be a personal or individual decision, and to some degree, a company decision. At a role level, there will be a prototypical or ideal mix of office work and non-office work. The challenges come when the ideal mix of office and non-office work does not align with the individual in the role. Maybe the ideal mix for a role is 80% office and 20% non-office, but the individual in the role is in his early 60’s and has underlying health issues that put him in a high-risk group. Something must give. Either the company needs to be flexible and allow the individual to predominantly work from home or the individual needs to find a new role that is better suited for their reality.
Simon Davis from Newmark Knight Frank said it best. “There are going to be different perspectives on how employees can best work, and we can’t necessarily project how companies are going to determine their own rules around the office at a macro level. I think what it has shown is just the need, holistically, for more flexibility in terms of where we work. I think the office attendance part for companies will be looking at specific needs and times. I don’t necessarily need to be in the office every day or every part of every day, but I might want to go there for specific reasons. I think technology will help make those decisions. I also think technology will help in terms of who physically needs to be in the office more than other people. If I’m a trader, I’m probably not too happy sitting at home with an old laptop and a junky monitor because I’m used to having six screens.”
Francisco Acoba expanded on the point by stating, “The other one point I’d mention is that companies are saying that 25% – 30%, maybe 35% of the folks who used to go to the office on a regular basis will likely continue working from home. In the future, the important question is “who?”. Out of the employee population, who should continue working from home and who really does need to come back to the office? The paradigms and reasons and rationales around why and when people need to be in the office have definitely changed because we’ve proven that most people can work from home, at least, from the knowledge worker perspective. The question is now is, where’s the most effective place for those individuals to actually get their work done going forward?”
Watch Simon Davis discuss flexibility in work going forward here.
NINE: Operating Models Will Necessarily Change
Xavier Menendez from Accenture posed a provocative question, “What if we woke up tomorrow and there was an effective therapeutic and a vaccine? Would we go right back to the operating models and the offices, if you will, that we were experiencing in January and February of this year? I think there’s mixed information about that. I think there’s a lot of muscle memory that would suggest we would.”
Xavier went on to describe how the need to return to the status quo in the office has been debunked. “I think number one, we’ve been on this journey to digitize the workplace for over 15, almost 20 years. I don’t suspect that’s going to slow down. In fact, this is only accelerating it. So number one, I think COVID is accelerating the move to digital and debunking the notion that we have to all be physically located together, notwithstanding the realities that we’re social creatures, we like going into offices, we like interacting with people. We get a lot of energy from that. I think the physical environment becomes more optional than it is required in order to be productive at work.
Secondly, I think COVID is accelerating another trend that we’ve been seeing. One around the centralization of real estate and facilities functions. I don’t think that the vast majority of our clients and organizations out there have consolidated their real estate functions to the extent that they will be going forward. Number one, because of the maturity of that function, things like lease accounting changes, things like just having better technologies out there like Tango. The demand for data and data-driven analytics is also facilitated by the notion that we need centralized real estate functions to operate this second largest P&L item more effectively.
I think thirdly, the watchword is agility. We have been seeing a continuous progression and trend towards trying to bake in more flexibility, more agility to not only portfolios, but also operating models, cost structures, visibility to costs, and more importantly, the controls around those costs. We’ll see this trend accelerate as well. While I know this is not all about COVID, the impacts of COVID will be long-lasting in the ways in which we operate occupied real estate in particular, and how landlords deal with their office real estate portfolios as well.”
An important data point that has shown up in a lot of places is the fact that workers want to come back to the office, and that working from home all the time is not the desired state, as outlined by Brett Abrams from Cushman & Wakefield, “For the most part, people felt as though they could be productive at home. We have 75% of people saying that they’re effectively focusing and able to collaborate at home. Where we’re seeing the gap, and Xavier talked about being social creatures, is that we’re seeing 50% to 55% people saying they’re missing out on personal connections and on company culture. They don’t necessarily feel the same sense of well being that they felt in January and February.
We see a lot of CFO’s and a lot of CEO’s talking about cutting commercial real estate spend because people have been able to be productive at home. I think what they might be missing is the long-term effect on talent. People still do want those boundaries to be able to go into work, to be able to limit their day to 8:00am to 5:00pm. Some people enjoy having a commute and having downtime or time to catch up on work. I think those are really important data points, and we don’t know the long-term effects if all of a sudden you’re starting to slash real estate by 20%-30%. One of the things I do know is that over the past 10 to 15 years, the workplace landscape has completely changed.
The last stat I’ll share as we think about the long-term implications on real estate is that 70% of the younger generations are having work from home challenges. Many live in the city. They might have roommates, they may not have access to the same technology and/or private space. They might have kids running around, caregiver responsibilities. Well, it still might be the dream of CEO’s, COO’s to cut costs on real estate, it may not be the best in the war for talent long-term.”
Watch Xavier Menendez discuss how operation models must change here.
TEN: Welcome to the Omni-Channel Workplace
One thing that is undeniable is the parallel impacts the pandemic has brought to the retail industry and the corporate office environment. As the crisis snowballed, there was a need to shut down all places of business to reduce contact and prevent the spread of COVID-19. In the retail world, that meant all non-essential stores were closed and consumers were forced to order everything online for curbside pick-up or delivery. Overnight retail commerce shifted from 90% in-store and 10% online to 100% online. The same phenomenon happened to the office environment. According to a Gallop poll, 25% of employees worked from home, at least some of the time, pre-crisis. Here again, the pendulum swung completely in the other direction and people have been working from home 100% of the time. Of course, both trends will recede and settle into their next normal levels, but the parallels are obvious.
Pranav Tyagi from Tango expanded on this concept. “I think that’s a really interesting angle to this. Not a lot of people think about this in this manner. The retail and corporate worlds are very different, but there are some parallels because retail has had to adapt to an online consumer behavior change. That has had a lasting impact on the attitudes of those consumers on the retail side. Similarly, I think once people have the taste of working from home, there’s going to be a lasting impact on their choices and decisions. There are some people who’ve never worked from home before, and now having been forced to for three months may never want to go back to an office. Yet there are others who, after having experienced work from home, have decided this is not for them for a variety of reasons. Similar to experiences that consumers have had in retail, employees have formed some opinions as a result of this.”
As shopping behaviors have changed over the last 20 years, successful retailers have adapted by delivering a seamless consumer experience across all channels – in-store, delivery, pick-up, etc. Traditional companies are now facing the same challenge – they need to deliver a seamless working experience for employees across the office and non-office channels. In order to do so, they need to invest in technology and physical infrastructure to make it happen.
Watch Pranav Tyagi discuss the rise of the omni-channel workplace here.
We here at Tango are thrilled with how Moving Forward: Workplace 2.0 turned out. Attendees gained incredible insight from our various panels of experts across all three phases of Workplace 2.0 – from planning the return to work, to the initial return to work and on to the workplace of the future. Thank you again to all of our thought leaders who participated in our panel roundtables and all of those who attended.