'Slow-Moving Train Wreck’: Getting Back To The Office Isn’t Going How You Think It Is
In the barrage of return-to-work news coverage, Kastle System card swipe data — which measures the percentage of employees entering the office versus pre-pandemic levels — has widely been viewed as the throbbing pulse of recovery.
And in the last few months, the patient has shown new signs of life, said Kastle Systems Chairman Mark Ein, with national average office occupancy up to 43% — a 50% jump since the beginning of the year.
But when asked what separates the firms successfully enticing workers back, and those that still lag, Ein said it comes down to marching orders.
“Frankly, the ones who have been most successful have put stakes in the grounds and said that 'we need you back,' with various degrees of flexibility,” he said. “They have required people to come back. It’s been the most effective strategy.”
As the purpose of in-person office work continues to be questioned, the seesawing debate and angst over coming back are causing challenges for occupier services — a backbone of commercial real estate that provides office spaces with tenant management, tech services, and generally, keeps the offices running.
Across the U.S., the new office rules are often fluid, disruptive, and sometimes even ignored by disapproving workforces. Meanwhile, firms are demanding more hands-on, concierge-level services for workers who come in and cluster on certain days and times.
Managing all of that can be chaotic, but if it's a means that leads to more people back at the office, then so be it, service providers told Bisnow recently.
“Some buildings have lobby ambassadors and services that are more engaging and customer-facing,” JLL Executive Managing Director and Head of Property and Facilities Management Work Dynamics Nickolas Hayden said. “Our challenge is to be nimble and get people to feel safe about coming back to work.”
There is also an existential question of how to create an office space that meets evolving employer, landlord and worker needs — and whether or not firms will begin to shed square footage as they realize they need less space in a hybrid world.
“Employees want flexibility, but they don’t just want that, they want autonomy,” CBRE Global Head of Occupier Thought Leadership Julie Whelan said.
“Employers want to give workers flexibility, they want to satisfy this new work style that’s emerging, that’s going to be the future. But they need an element of predictability. I wouldn’t say anybody has cracked that nut perfectly yet.”
Right now, there’s lots of attention being paid to the redesign of the office, and how workspaces will operate and evolve.
But concurrently, there are significant shifts, and even opportunities, within occupier services, which are finding new business lines and profits in offering technology, more hands-on customer service approaches, workplace strategy and design, and even environmental, social and governance, or ESG, monitoring options.
“Legacy, old-school occupier services were very engineering-heavy, tactical, keeping the building running,” Whelan said. “Now it’s very technology-oriented, very people-oriented. We think a chief people officer is a new role that will come to be; you need to have someone sitting atop all these silos and driving the experience.”
But care needs to be taken to avoid an overreliance on technology as a means to bridge the chasm between workers and management.
Chase Garbarino, CEO and dofounder of HqO, a tenant experience software platform that’s seen rising demand during the last year, said he was “somewhat shocked” at how little some clients knew about the space they occupied. The pandemic was a black swan event, he said, but there has been a lack of clear communication and the vast majority of managers are slow to adjust.
“Tech doesn’t get people back to the office, purpose does,” Garbarino said. “We’ve seen firms do trivia or succulent giveaways for staff, it’s all unhealthy calories. When we talk to our customers, it’s not simple or easy, there’s not a silver bullet. They need to create a feedback loop and really listen to employees.”
Part of that analysis, according to many in occupier services, is a data-driven examination of the workspace; despite pressure to figure out a plan now, many firms are employing sensors, surveys and analytics to begin looking at their office space use, with an eye toward redesign or downsizing when a lease event or other opportunity presents itself.
“Everybody is yellow-padding out the future,” Whelan said.
Office space has traditionally been underutilized much of the time anyway, Whelan said, with roughly 60% of desks full at any one time because a certain percentage of staff was on leave, at meetings or traveling.
This “shadow occupancy” meant that even if 60 out of 100 desks were actually being utilized on a given day — if there were assigned names to 95, for instance — the office was considered fully occupied.
That view is quickly shifting to hard occupancy data, measuring actual real-time usage; many companies are looking at info sources like Kastle, as well as investing in more granular monitoring systems to more precisely pinpoint how their space is being used.
“What’s resonating is helping get clients to a data-driven process around what they’re seeing in the office, what amenities certain clients like, and what’s impactful,” Cushman & Wakefield President of America Occupier Services Pedro Vasquez said.
Some expect that data analysis to lead to a rude awakening.
Vestian Global Workplace Services Chairman Michael Silver said that the whole office situation is “a slow-moving train wreck that is going to get worse and worse for suppliers,” and businesses need to wake up to the fact that they need less than half the space they needed before.
He cautions landlords and owners — and occupier services staff advising them — to hold off on spending on elaborate redesigns, or sinking money into creating an office of the future.
From an owner’s perspective, “the juice isn’t worth the squeeze,” Silver said.
With downsizing on the horizon, it’s worth holding on to assets and cash instead of rushing upgrades and investments.
“Lots of tenants are having to re-evaluate the space they need for their own use,” Mazars partner and US National Real Estate Practice Group head Carlos Martins said. “Do you hold onto conference space, take advantage of subleasing and shared office space? The real estate industry has led the comeback by having their employees in the office, everybody else is figuring out what a new normal will be.”
Helping figure that out will require new kinds of workers, said Cushman’s Vasquez, in addition to traditional staff tasked with maintaining the built environment. Occupier services need to focus on a more high-touch experience, with staff more focused on hospitality than HVAC.
“It’s about service,” he said. “This part of the business is in growth mode.”
“This genie is out of the bottle,” Whelan said. “Unless employers can point to this flexible autonomous schedule as creating negative outcomes, that it’s a failed experiment, it’s going to be with us.”