Aesthetically office space has been morphing for the last 50-odd years. From ‘closed door’ offices to cubicles to open plan. Conference rooms instead of large offices for client meetings and offices designed to be virtual ‘play-parks’ or amusement arcades with coffee stations, gymnasiums and even saunas brought about primarily by tech companies, but many corporations have followed to the point of almost creating hospitality suites. Large corporations looking to poach good staff without spending more on salary offer these perks to lure staff. At a certain level, it’s no longer about the money, it’s about the perks! Similarly, Corporations adopt the casino mentality – let’s get them in and supply everything to keep them staying longer. For casinos it means increased spend, for Corps. – increased hours worked for no extra money. KAAACHING!
Coupled with that are companies who have built large successful businesses supplying everything from cleaning services, greenery, plants, daycare, flowers and foliage, fish tanks, or artwork for the walls to uniform laundering collection on a rotational rental basis and much more. All this costs the Corporation money.
However one thing is prevalent during all this change. Per person (unit) office footprint is diminishing. And the primary reason for that is office space rentals have been skyrocketing. Apart from a blimp around the credit crunch of 2008, office rents kept going upwards, especially A grade space.
The “bosses” still get vast space with private ablutions etc. but the “worker bees” get the ‘communal upgrade’. It looks pleasing and it’s functional – but it’s definitely smaller. A company that analyses this trend continuously is REIS – and they show that per square Foot of space usage per staff member has significantly reduced (2001 to 2010) from 175 feet to 50 feet and is still declining.
So what does this mean when considered in light of the current Covid -19 pandemic and the much hyped and talked about REBOOT of our future economic matrix. I hear so much talk of “things are going to change; we have to use this opportunity to restart afresh” … yet history says otherwise. What I’m hearing here are people talking with an almost biblical reverence about the need to change; to reboot – reset the system; to safeguard our planet, to go green etc. I hope history is wrong, I hope it does change. But it usually only happens if the economics work.
A friend who manages short term rental office space with secretarial services – by the hour; day or week, says they’ve laid off 3000 staff in the U.K. and closed several of there own offices and will start to offload office hubs. This benefitted businesses who were start ups, or didn’t want long term overhead commitments. A good concept – but they’re saying, fewer people are going to rent office space and work from home is the new language. Landlords may need to start reducing rentals and negotiating hard if there is both a downturn in the economy and a move to working from home as a result of Covid-19.
WORKING FROM HOME
- Corporations can reduce or at worst remain with the same amount of office space (reducing over time as the leases expire) and still grow the company;
- Landlords will have to fight for decent tenants and negotiate rental rates. So will look for other investment opportunities – hopefully green. Office space rental has always been governed by the simple law of supply and demand;
- Artificial Intelligence (AI) will create new paradigms in the work place – less space and infrastructural ‘needs’ like gyms and coffee bars are required for machines and we will need to create more head space and facilities for downtime and family time;
- Salary packages will simplify – No company cars; staff lunches, general travel allowances, canteens, customer based expenses, etc;
- Office supply businesses from consumables (Paperclips and post it notes) to office equipment etc. will need to change how they operate. They will have to design new types of office furniture – fold away or home friendly. Home based work will create a large volume uptake in the industries of home delivery; local supply; and decentralised courier collection to name a few. This growth opportunity is both huge and allows for new localised smaller operators instead of massive national operators. It is estimated that over 3 BILLION dollars of office supplies are stolen in the United Kingdom per annum. And 75% of all USA office staff admit to stealing something from the office. This doesn’t include private photocopying; coffee consumption; free bottles of water; milk for hot drinks; etc. The USA Department of Commerce state that over 50 BILLION dollars is stolen from the office in the USA per annum. These are staggering figures. That’s the GDP of some small countries. But working from home stops this. The company knows exactly what’s been ordered to your home and it’s auditable;
- Tax benefits through write offs by individuals, not just the corps.;
- Crime will reduce in suburbs as more people remain home to work;
- Plus baby and toddler care becomes something that doesn’t require outsourcing. Governments in many countries contribute to this cost – They’ll save a fortune not having to fund toddler care benefits to single moms and working parents who operate from home;
- It provides a better opportunity for the staff member to develop a side hustle. Starttech; Deloitte’s; Entrepreneur.Com and many more companies that track the effect of side hustles have done studies indicating a side hustle makes you more (not less) productive in your primary employment; and
- There is no doubt that working from home improves the green / planet health issues we face. It reduces road congestion in major cities; reduces smog; reduces wasted hours in travel time; a less congested public transport system; and creates opportunity to use our major metropolitan areas far more diversely.
I could go on. Flatten peaks and troughs in house values on commuter belts etc etc. The list is endless. But I want to focus on a further two key aspects of working from home that for me clinch the deal.
1) The benefit of global business success is seldom enjoyed by the low wage workers in developing countries (say a Vietnamese worker making NIKE products), or the community the worker lives in, or the country (Vietnam) because profit filters back to global head offices, to shareholders or tax havens. Not to mention the per hour wage disparity between the worker in Vietnam and the corporate executive at global HQ.
In a similar way the office worker doesn’t benefit his local community with his discretionary spend!
If you apply the global corporation system to a more localised work matrix, think of a worker commuting to his office in London or New York from a suburb. He spends his disposable salary buying gifts, cosmetics, hygiene products, birthday cards, coffee, lunch or clothes etc. during his lunch hour within walking (or taxi) distance to where he works. So the area he lives in (his home) gets very little of his discretionary salary spend. It all gets spent in the city he works in (like a global HQ).
But if they worked from home … they would shop locally. High Streets and community shopping centres are struggling and even dying. A lot of it is ascribed to large regional shopping centres and online (Amazon type) purchase. But I believe as cities expand and offices locate to these large cities they swallow up a massive chunk of the discretionary spend from staff. You don’t find global corporations choosing Alice Springs to locate to – they need certain specific infrastructure starting with a good airport link and public transport system. So everything becomes centralised, mega city’s are created and expand constantly because they meet the company requirements, it’s a self fulfilling prophesy and creates massive disparity between suburban offerings and large cities.
Working from home would totally change this and spread the load, it would also revive food outlets, coffee shops, bakeries, bank outlets, gyms, clothing and gift stores, salons and barber shops etc. ( the list is endless), on suburban High Streets and in local communities. Because the workers discretionary salary would stay and be spent in HIS OR HER local community.
You want proof – the growth of garden centres and DIY outlets in suburban communities. Why are they building (unlike almost any other retailer) in suburban areas. Even supermarkets with massive footprints are in the large CBD’s. But not DIY, why … because it’s tough to travel on a bus or train with a wheelbarrow or long ladder, so you purchase that near your home. The incentive therefore is to buy local. So corporates build big box DIY outlets in suburban communities. Who else does this – IKEA – always at the junction of a few large suburban areas with high density. Working from home would create a similar uplift in community retail – So the small high street retailer can compete again. And working from home would filter into every type of retail and service business. Small local community retailers like corner markets and bakeries have increased revenue because Covid has forced people to stay home and shop local. But a key point noted by consumer testing is that personal service quality and product knowledge is far superior in these smaller owner operated outlets. Neighbourhood shopping promotes community.
And finally (2) I point out that working from home is simply a better use of time to incorporate a superior lifestyle and work balance. You do not have to rush home and throw something in the oven or worse, heat something (convenience meal – usually poor health) in the microwave. In your lunch hour you can eat with children or go for a run in your own community. Visit an elderly friend or relative. Covid -19 has shown that baking supplies have regularly been out of stock – flour particularly, it’s not a supply chain issue, it’s increased demand, people have ENJOYED baking fresh and eating scratch made food. Because they’ve got the time! We seldom really factor in the true cost of commuting to and from home to go to work, on lifestyle.
What this does to people’s health improvement cannot easily be quantified in monetary terms. But it’s huge!!! I am not Italian but I currently operate out of Milan. Italy has the oldest and healthiest population in Europe and one of the healthiest in the world, so too Japan. It cannot be a coincidence that both these countries have a massive food culture focused around fresh homemade food eaten over time and enjoyed. As opposed to wolfing down a hotdog on the street corner in New York and washing it down with a sugary soda from a can. Italian shop owners close for lunch – for up to 3 hours a day. At first it annoyed me … but not any more. I’ve grown to love it and can see it’s benefits. I truly hope they never become “westernised” to wolf down fast, sodium enriched junk food, after panicking to get to an eatery, fight the queues and get back to the office, all in less than an hour. Who needs this??
Working from home allows you to answer the phone and prepare a meal. Or think creatively about work whilst planning a vegetable garden. It allows headspace. It allows you to enjoy your family and save 2 hours (the given average commute time allocated to going into major metropolitan cities and moving around the city on any given day) which is totally wasted. And it utilises all the modern technology we’ve created to allow for better lifestyles and communication. I mean … why have WiFi and smart phones if we are still going to congregate like bees in a hive at the office!
Working from home is not perfect. There are issues. Learning to interface with co-workers; progress updates taking up more time than the actual work you’re doing; constant interruptions, etc. But isn’t that just impatience because of conditioning. We are conditioned to work in an office environment. It’s been like that for centuries … it may take a few months to undo that learning and learn anew! Systems will be created to deal with issues. By building an aircraft, and learning to fly, we couldn’t reach the moon immediately, but it did happen. Give it time.
Working from home for me makes so much commercial sense. Maybe the corporations will see it too, and if they do, it will happen because it makes economic sense. The companies win, the workers, the community, the planet – but above all lifestyle is improved. The office is still available. But it’s not compulsory. Working from home does so much for the local community each staff member lives in, not just the major metropolitan cities who are bursting at the seams anyway.
Most stolen items from offices in order of quantity with one being the most stolen: 1) post it notes; 2) paperclips; 3) toilet paper; 4) copier paper; 5) scissors; 6) sticky tape; 7) notepads; 8) staplers; 9) highlighters and 10) pens & pencils. What have you stolen?
B
