Does your company value buildings or people?
Building are empty, but your employees may feel empty, too
Most of my career has been spent in IT, working mainly in the office, at a desk, or in a data center. I remember presenting Outlook Web Access to the company’s IT department about 20 years ago, which allowed employees to access their email from anywhere. I installed the first Blackberry server a short time later and watched energy traders conduct business around the city. As technology marched on, VPNs became the norm, and then the cloud moved us to mobile-first experiences. When I pivoted to sales in 2014, most of my work was remote or on the road as a windshield warrior.
Still, none of this ‘work anywhere’ build-up prepared me for COVID shutdowns in the spring of 2020. As it turns out, companies and cities were also not quite ready for the shutdowns either. So three years later, we are attempting to return to normal, but buildings mostly sit empty, making splashy news stories. Meanwhile, the complexity of our collective post-COVID response ranges from ‘get me back to the office’ to ‘I’m never going back.’
Still, the main focus lately is squarely on buildings, not people. Buildings represent very traditional assets that can foster a cohesive workforce from proximity. Yet, the extreme situation we’ve found ourselves in has led people (the social aspect of ESG) to question everything about the Return to Office (RTO) and their work.
COVID has permanently changed work
I’ve been to several offices over the past few months. Unless your employer has demanded an RTO or you are in a frontline worker situation, like healthcare, retail, etc., you’ve likely noticed that it’s pretty quiet. Once bustling cities are struggling with employees who favor remote work. On the surface, it can be simple for an executive to beat their fist on the desk and state that culture, mentoring, and institution knowledge sharing depend on in-person collaboration. Still, the challenge is way more complex, and the seemingly easy RTO solution might be out of reach.
Those empty buildings are a losing proposition for cities and cost companies money. In a tightening economy, this issue appears to have reinforcing effects.
As reported in Bloomberg, many cities have offered tax incentives to companies with employees in the office. The incentives come with strings, like how many employees are in the office and how often. As you can imagine, these requirements have gone mainly unenforced until recently because it was a given that people would work in an office building. Cities need commuters to come in, spend money, and generate tax revenues. But employee commuting remains low, and employees are pushing back on RTO policies.
Cities looking to stimulate their economies via office attendance walk a fine line: Set the return-to-office bar too high and risk losing out to more laid-back localities; get too soft and risk a gaping hole in the budget where sales and property tax revenue used to be.
I’d go further to not only say it’s a no-win situation, leaving cities to do the best they can to attract workers. That talent, by the way, is finding new places to move and expecting companies to allow flexible work. Some plan on not going back, at least for the foreseeable future.
This also manifests as commuting has leveled off at about half of the pre-COVID rates and appears stagnant. Related, while still low, the delinquency rate on commercial lending is rising. This led Owen Thomas, Boston Properties Inc.'s chief executive, to declare, “Commercial real estate markets are currently in a recession.” Yet, a meaningless push for RTO appears in this article as well:
Some also predict that an economic downturn would empower managers to insist that employees work in the office.
And so, we’re back to executives beating their threadbare RTO drum. But why go back to the office at all? Could we have overbuilt what was needed during a period of stellar economic growth akin to the ghost cities of China? Like overhiring, no one is falling on that sword yet. Fun fact: building management and construction account for around 40% of the world’s energy-related emissions, so it seems like something we could cut back a little on. Yet, like the hospitality industry’s current state, thinking like that would tank another sector.
It is becoming clear that returning to ‘normal’ work isn’t likely anytime soon. And so, companies are scrambling to figure out what to do with their buildings. However, suppose leadership is empathetic and willing to find new ways to build a cohesive and inclusive culture. In that case, they won’t hesitate to walk away from the tax incentive because they realize the repercussions of forcing employees back, and some are doing just that.
Meanwhile, other companies are trying new things like optimizing space with desk sharing with desk mates on alternate days or turning them ‘resimerical’ (to look like your home). On the surface, these efforts appear focused on empty buildings and might be missing the point that the people feel empty, too.
COVID has permanently changed us
Let’s start with the obvious. In my opinion, commuting is, by far, one of the most shared experiences and the most significant waste of time you could ask employees to do. It wastes personal and work time. According to the US Census, average commute times pre-pandemic was 27.6 minutes one-way. Let’s round that up to an hour per day. On the short end, a year may only have 240 weekdays. That is ten days a year spent commuting, or an average salaried worker’s vacation time (2 work weeks).
Think back to the steady march of technology and where we were already heading. It shouldn’t be surprising that working remotely just works for some people.
76% of workers with offices already open reported their "major reason" for working remotely from home all or most of the time was just due to the fact that they prefer this work style.
But here’s the real issue, and it is a sobering one. COVID and the ensuing shutdowns have changed us dramatically. So let’s run through what most of us experienced.
COVID shutdowns and isolation from family, friends, and co-workers
Lack of mobility and control
Day-to-day restrictions
Fear of getting sick or getting others sick
Loss and grief
As a result, the world is dealing with three years of collective trauma, which is now compounded by other interconnected risks.
Extreme weather and politics
War in Ukraine
Disinformation
Inflation
Layoffs
People are stressed, scared, and don’t know how to act. Those eager to return to the office to gain leadership exposure or be mentored may find the experience isn’t what they expect because buildings are no longer bustling with networking opportunities. Those who want to work remotely might find it difficult or problematic to express their feelings to others. As a result, no one is re-integrating back into the office well. Further, we pride ourselves on our work identities and those social connections, which may now be lost.
Adria Horn, Lt. Col. US Army Reserve and VP of Tilson Technology Management, has a unique perspective. She compares what is happening to employees now with her experiences in coming off deployment. When I read this, it was immediately relatable to what I’m feeling, and I suspect it may be for you, too.
Coming back from deployment is hard. You’re expecting it to be great. You’re home again, this should be great! But the biggest feeling is that things are different. The kids are different. Your favorite restaurant closed, your pet died, and your softball team broke up. The couch your partner bought while you were away is great—but it’s not the couch you knew. Home isn’t normal, it isn’t as it was. Things don’t meet your expectations, and you seem to have lost control, so your return experience doesn’t feel good at all.
Whether you are eager to return to the office or not, you are impacted because others are feeling this way and avoiding the office, or perhaps, like me, they found more time at home. As a result, our work routines are entirely disrupted. But here’s the difference between a military deployment and what’s happening with RTO: this isn’t just a tiny percentage of the population, as Horn calls out, it is all of us.
With COVID-19, just about everyone in the world was deployed. They didn’t know that they were deployed, they weren’t equipped to know what was coming, and we still don’t know when or even if it will fully end.
McKinsey featured Horn in the linked article above over a year ago, and she was interviewed on the topic again in November 2022 about this topic. In the last interview, she indirectly calls out the need to recognize this problem and names two considerations:
Be forgiving of employees who leave. They might be struggling in ways you don’t understand.
We need ‘Beast Counselors’ to listen and counsel people on what is happening. These facilitators are outside the reporting chain and can help people cope with these emotions.
A third consideration appeared last week as the UK reported the results of its four-day workweek study.
The study found that levels of anxiety, fatigue and sleep issues decreased, while mental and physical health improved. About 70 percent of employees said they had reduced levels of burnout by the end of the trial.
These appear radical ideas, but the world has collectively never faced a challenge like the global pandemic. Perhaps coming out of it doesn’t mean returning to normal, but doing something different with new approaches and ideas.
Imagine redirecting the investment from retrofitting buildings with material luxuries and investing them into your employees’ mental health, helping them cope, adjust, and grow, or piloting a shorter work week. In case you missed it, people want purpose from their work. The traditional material benefits are being seen for the traps they are and are falling by the wayside. A redirection of investment to people might be worthwhile but requires courageous leadership.
After all, I’ve never heard an executive state that their buildings were their most important asset, have you?