Is Commuting to Work a Thing of the Past?
A seismic shift may be occurring in both the residential and commercial real estate Industries nationally.
Twitter and Facebook have announced that the new work from home trend may be permanent. While those two companies made it official, other companies seem bound to follow the new trend. Regardless, thousands of other companies are currently operating in this way. Will it become permanent?
On the surface, this seems to bode well for business owners, as one of the major overhead costs for any business is the rent of a commercial office space. When David Eyzenberg, owner of a real estate investment bank, required his two dozen employees to work remotely from home, he was pleased at first.
He said that work was getting done: technology, email, and Zoom conferencing were helping. Also, the new home-based workspace allowed employees more time with families and eliminated wasted time and expense while commuting.
But as the first few weeks turned into months, some of the initial advantages lost its luster. In some ways (as referenced above) the new normal had definite advantages, but as time passed, Mr. Eyzenberg began to see problems arise. “I’ll tell you, if I told the company ‘we’re just going to be remote’, I’d probably lose half the company.” The feedback he received indicated that his employees adapted in the first few weeks rather well, but when weeks rolled into months, those employees began to feel stressed.
What Worked
The nation’s largest commercial real estate firm, Cushman and Wakefield, surveyed 40,000 employees from a multitude of various businesses to ascertain how the new work environment was successful in the eyes of those employees.
“People who both had experience working from home prior and people who had a dedicated space to do their work were having better experiences,” said Rachel Casanova, Cushman & Wakefield’s senior managing director of workplace innovation.
The Commercial Observer also conducted a study and found the same results. “Virtual communication was being successfully executed by these home-based employees [those who had experience working from home] ... It was something they adopted very early on and without question.”
What Didn’t work?
Beyond the control of companies, there are problems that cropped up. The Covid virus caused delays in permitting and approval of various projects, as the government bureaucracies were moving far slower than normal due to absenteeism and a lack of experience working remotely.
As sales is the backbone of the economy, many companies are coming to realize that Zoom and other remote technologies are not totally satisfactory in terms of closing deals. As every account executive knows, the personal touch of actually meeting and getting to know a client is far more effective than a two-dimensional online experience. Trust, for example, is built far better in actual person to person meetings.
And when it comes to onboarding new employees, there are further issues to grapple with. For example, the culture of the firm can best be learned and experienced at the workplace, rather than remotely. Getting a new hire to swim with the flow of the company is quite difficult when the only contacts are remote.
Indeed, the Cushman & Wakefield study found that 70% of generation Z and 69% of millennials reported challenges in working from home, as did 55% of baby boomers. Younger workers often have roommates or young children which can serve as distractions.
Also, some firms are concerned that some employees might be watching YouTube or engaged in other leisure activities on company time.
No one knows for sure when the Covid pandemic will end naturally or through a vaccine. But, in lieu of a vaccine, as time passes, some of the kinks should improve. For the real estate industry, government bureaucracies will hopefully begin to acclimate better to the new environment, and their speed concerning leasing, finance, and construction permitting, should improve.
Going Forward
Regardless, of the plusses and minuses, remote working for many firms, is going to play a bigger role in the future. Particularly for the real estate industry, Wakefield’s Rachel Casanova added the industry has known for years that office space is actually utilized by employees only 60 to 70 percent of the time. Workers take vacations, go on business trips, etc. A lot of space goes unused during the year, yet this space has to be paid for in the monthly rent.