Remote working in 2021
11th January 2020
In previous years, conventional wisdom was that corporations need offices to ensure productivity, culture and attracting talent. A war on prime office space ensued, with companies focusing on three key pillars: collaborations, hoteling, co-working. But Covid-19 has forced employees to adopt new ways of working – leading to the realization that one doesn’t need office space to satisfy those three key pillars.
Although flexible space solutions have been growing annually at a rate of 25%, this section still comprises just less than 2% of all office space in primary markets, according to McKinsey. The Instant Group predicts that within three years, 35% of corporates will use flexible real estate as a solution to mitigate risk throughout the business cycle and to remain agile in uncertain times. This begs the question: how will traditional office space develop in 2021, especially taking into account the effects of Covid-19?
2020 could be dubbed the year of working from home; 60% of employed Americans worked from home. Although liberating for some, it also proved to be a challenge for many. Covid-19 has demonstrated the ability of office work to be executed from home instead, leaving employees with increased freedom to design their schedule, greater flexibility in balancing their personal and professional lives and a new-found ability to use their morning commute in a more productive manner. Yet for others, the limitations of their home set-up led to feelings of frustration and isolation. According to Christian Ehrström, co-founder of Opus, there is a lot of interest in working remotely in some capacity: “Our research has found that 98% would like to work remotely for at least some time during their career, but the main issues they face involve lack of focus due to distractions, no clear end to the working day and lack of a ‘community feeling’.”
Consequently, one questions the value of office spaces. In our knowledge economy, success depends on collaboration and serendipity – is that truly replicable in a digital environment? Does young talent, eager to learn from mentors and experience the social aspects of their job, stay if that opportunity is not present? In more recent years, many articles have argued that offices are a place to meet co-workers, get inspiration and exchange ideas – is that hindered by Zoom meetings? Or is there perhaps an alternative that companies might look to…
According to Joakim Hamnstedt, co-founder of Opus, there is. His company offers the ability to work in hotels, cafés and coworking offices for an affordable rate – capitalizing on the trend towards hotelization of office spaces. “We offer a platform where people who are tired of dealing with the limitations of their home office can turn to, by offering access to inspiring (and Covid safe) workspaces with amenities and free coffee, tea and water.” The app, initially started before Covid-19 and specifically targeted towards freelancers and students, pivoted their strategy and now also targets companies through offering tax deductible packages. “The trend in the last years has been to reduce lease terms and shrink footprints – all in an effort to reduce operating costs and, in some cases, reinvest in technology. With real estate being the second highest cost for companies after compensation, being able to reduce your real estate costs whilst simultaneously offering your employees another way of working – it’s a cost saver that protects productivity and employee satisfaction.”
Real estate in its traditional form will experience an overhaul post-Covid-19. Landlords will need to entice corporations with added amenities – firms are aware that working from home is possible now, so why would they allocate a big chunk of their revenue to offices if they do not offer an additional benefit? If corporations do decide to reopen their offices, they will need more space to comply with Covid-19 regulations – reflecting in increased real estate costs or the need to implement shifts which results in continued remote working. Twitter’s CEO, Jack Dorsey, has already stated that his employees are allowed to work from home permanently if they prefer to. By granting remote working to their employees, firms put fewer locational restraints on their employees - which means increased scope for talent sourcing - and are able to adopt innovative processes to boost productivity such as Opus.