Since the pandemic began, corporate real estate has endured a crisis. The struggle continues to be rooted in one issue – occupancy. For most companies, the number of people who use their office space determines if their real estate was a good investment. A building must be well occupied to drive sufficient value to the business. However, after almost four years, office use has plateaued to about half its pre-pandemic level. That not only impacts corporations but also businesses that thrive on a daytime workforce, tax revenue for local governments and building valuations that affect investments and retirement plans.
That is a wake-up call. Despite what many had hoped, this problem will not fix itself. It must be solved.
Predictably, many CEOs believed they had the solution. And predictably, it has not gone well. Most chief executives simply do not have experience with workplace strategy. Before March of 2020, they seldom discussed the topic. Now they regularly speak out, give interviews and publish opinion columns, but they rarely make a compelling case for their point of view. Their reasons can often be summed up as “We’re better together,” which is analogous to the parental phrase “Because I said so.”
Those CEOs do not have the answer to this dilemma. If you don’t believe me, look no further than their numerous botched attempts to get more people back in the office. Countless return-to-office mandates have been rolled out and then scuttled, occasionally accompanied by a worker mutiny that plays out on social media. And a recent survey revealed that many of those leaders expect their people to eventually come in five days a week, highlighting their disconnect with broad employee sentiment.
My advice to corporate leaders is this: Let those with the right knowledge lead the way. Your method of attendance-by-force will not improve your company’s performance. Callously applied attendance requirements degrade morale, cause attrition and limit the available talent pool. In fact, new data confirms that workforce policy not only impacts employee engagement but also revenue.
To create a well-used real estate portfolio, you must get three things right – people, buildings and technology.
Team leaders understand and influence the workforce. A post-pandemic truth has emerged: Team leaders often have more sway with workers than the C-suite does. And because team goals are more focused, it is easier to articulate the value proposition of meeting in person. Therefore, these managers have a significant impact on where people choose to work or what projects might be best accomplished in person.
Moreover, interaction at the team level is a persuasive reason to meet. Most employees have little concern for in-office mandates, but they often care deeply about building trust with their colleagues, which happens most effectively face-to-face. If their team meets in person, they want to be there. Those who manage teams can build a customized program based on function and employee preference. They will find the balance between freedom and accountability that will allow people to thrive.
Let your real estate team develop the real estate strategy. The pandemic upended the fundamentals of portfolio planning. Many companies need a new playbook to determine where their offices should be located, the square footage they require and their desired mix of collaborative and private space. This paradigm shift demands substantial changes. But many leaders resist based on their theory that eventually office use will return to “normal.” Their reluctance has contributed to low attendance.
Corporate real estate professionals immerse themselves in understanding the purpose of space. They are best suited to plan and implement a transformed portfolio. They recognize the trade-offs in our most critical office use issues – a headquarters-centric vs. a hub-and-spoke portfolio, space as a service vs. leased or owned property, adaptive offices, intelligent workplace, desk sharing, sensor data, mobile power and much more. These are the building blocks for a real estate strategy that will resuscitate occupancy.
Make your workplace technology the best option. Poor technology will drive people away from the office. Pre-pandemic, most employers had a captive audience. But in a hybrid work environment, employees experience a constant comparison of digital capabilities. They work at home, at Starbucks, at a flex space and elsewhere. Unreliable or inferior services will change their habits.
To attract more workers to the office, employers must enable their IT organization to provide a better experience than what their people enjoy remotely. In the office, everyone should feel empowered by state-of-the-art technology that not only provides robust connectivity but also an efficient way to leverage assets that are only available to them on-site.
Most employees crave a social, collaborative office. That experience can be recreated, but the solution must come from people with the right acumen. Corporate leaders should recognize their limitations and leverage the talents and skills of those who are most qualified to restore our lost workplace vitality. If they do, their offices will once again bustle with the sounds of a happy, productive workforce. And corporate real estate will be saved.