The Great Labor Day Return To The Office That Wasn't
The Labor Day weekend is over, but the wave of workers back in their offices and patronizing nearby businesses that was supposed to follow is more like a trickle.
The delta variant of the coronavirus is not finished raging through the U.S. and the vaccinated portion of the population is well short of what would be necessary to return to something like the routines of 2019. Most office-using employers have pushed back plans to resume in-person work, with some now aiming for October, others waiting until 2022, and still others not willing to set a new date.
Two-thirds of companies have delayed return-to-office plans as a result of the delta variant, according to a survey of 238 executives conducted in late August by human resources consulting firm Gartner. One popular real-time measure for worker occupancy in offices, the Kastle Systems Return to Work Barometer, showed a decline in each of the first three weeks of August before a mild uptick the week of Aug. 24, which could be attributed to some employees returning from vacation in the last weeks before Labor Day, Kastle CEO Haniel Lynn told Bisnow.
The average office occupancy across 10 major metropolitan areas based on card swipes tracked by Kastle rose from 31% to 33%, a number that is more likely to increase gradually or even flatten in September, rather than jump after Labor Day as was expected as recently as mid-July, Lynn and Peter Miscovich, managing director of JLL’s strategic consulting division agreed.
“It’s all well and good to have a romanticized notion of a particular date, but we’re still dealing with Covid-based risk and uncertainty, climate change-based risk and uncertainty, and to some extent economic uncertainty based on the most recent jobs report,” Miscovich said, citing the surprisingly devastating effects of Hurricane Ida’s remnants on the Northeast in the past week as a climate change-based risk.
Even in late August, before Ida’s remnants brought New York to a brief standstill, employers only expected 41% of office-using employees to return to in-person work by Sept. 30, according to a survey by the Partnership for New York reported by Bloomberg. Respondents had expected over 60% of employees back in the office in the May edition of the survey.
In the central business district of Philadelphia, about 100,000 workers who were expected to return to in-person work during September are remaining remote for now, the Philadelphia Inquirer reports.
“The first emotional reaction is depression,” Center City District President and CEO Paul Levy told the Inquirer. “A month ago, we could see the recovery right ahead of us. The optimism was palpable.”
Further complicating the question of when more employees will be back in the office is the uneven pace of vaccinations. Not only is the failure to reach herd immunity a driving factor in the emergence of variants, but companies with multiple offices may tailor their policies to accommodate workers where vaccination rates are lowest and coronavirus statistics are the most dire, Lynn said.
The specifics of reopening plans with regard to vaccination status already vary wildly between companies, and some may simply need more time to understand what their employees want and need or to strategize reopening offices at different rates depending on location, Miscovich said.
“I think the more enlightened and progressive CEOs and leadership teams are taking a learning approach, following the science and managing risk,” Miscovich said, based on his team’s experiences pilot testing both return-to-work and workplace hybridization plans with employers over the past few weeks. “It’s definitely not a one-size-fits-all return-to-work policy or a blanket proclamation.”
Among the major employers who have pushed return dates at their offices from September to October (for now) are, per The New York Times: Uber, BlackRock, NBC parent company Comcast, Microsoft and Wells Fargo. Of those, Microsoft, Uber and Comcast are requiring vaccines of their office-using employees, the Times reports.
The TJX Cos., parent company of retail brands T.J. Maxx, Marshalls and HomeGoods, will start bringing employees back on Sept. 8, but won’t have its formal reopening until Nov. 1, by which point its office workers will be required to get vaccinated, the Times reports.
Tech giants Amazon, Apple and Google have all pushed back reopening dates until January, as have Ford Motors and Starbucks, while Lyft’s return date is now set for February, the Times reports. Airbnb won’t be asking its employees back until at least September of next year, citing the needs of its employees who are also caregivers. Twitter, the Times and National Public Radio have yet to declare reopening dates.
Every set reopening date for office-using companies remains dependent on the trajectory of the coronavirus, but if conditions permit, those who have yet to commit may coalesce around the new year, considering that the holiday break is the next date that fits with previously established societal rhythms, Lynn said. But every delay makes the next set time feel a little less authoritative.
“It’s hard to keep declaring dates and having to move it,” Lynn said. “[Companies] would rather lay out the circumstances by which they would decide when to return. And so much of it comes down to helping the employee understand how the employer thinks about how it will work, which matters more than the actual timing.”
Meanwhile, time continues to march on for so many employees entering their 18th month working from home, thousands of which were hired and trained remotely. With so many companies’ stock prices at all-time highs, the evidence that widespread remote work can sustain productivity has mounted. On top of that is the historic imbalance between supply and demand in the job market that has given workers nearly unprecedented leverage.
“Whether you’re in technology, finance, consumer products, manufacturing or anything, the competition for talent is increasing,” Miscovich said. “So the ability to attract and retain people you want at your organization needs to be layered into return-to-office, hybrid and similar work strategies.”
If the present labor situation is a historic one (to say nothing of the pandemic itself), then it stands to reason that an eventual regression to the mean is in order. Though the discussion of when office-using companies will bring their employees back to work has grown more complex with the passing of Labor Day, it might not have changed much about how the same companies regard their long-term space needs, said Sonali Tare, senior director of content experience for corporate real estate trade organization CoreNet Global.
“We know that companies in our surveys have routinely expressed a desire for the corporate office to remain a place for collaboration and teamwork,” Tare said in an email. “That may mean in some cases companies will have a smaller real estate footprint, though we don’t believe that the current delays due to the delta variant will change that longer-term vision.”