In a move that’s good for office landlords but also for workplace collegiality and for the overall economy, large employers increasingly are requiring employees to work from company offices three or four days a week.
During the depths of the pandemic office towers emptied as workers did their jobs from home. Now that COVID vaccines are readily available, it long has been safe for workers to return to the office. But many workers like the flexibility of remote work, and many employers accepted virtual work as the new normal.
That trend is finally turning. True, work from home remains popular. Job-search site Zippia reports that 26% of U.S. employees work remotely, and 16% of employers are fully remote. But the share of remote workers fell sharply from 2020 to 2021.
Source: Zippia, https://www.zippia.com/advice/remote-work-statistics/
In September, technology giant Apple required employees to spend three days a week in the company’s offices. Other companies, including Snap, Tesla and Uber, have imposed similar policies.
And in November, Elon Musk, Twitter’s new owner, reversed the social media company’s “work from anywhere policy.” Musk told Twitter employees that they needed to be in the office for 40 hours a week.
Also joining the return-to-office push are corporate giants Starbucks and Disney. Starting in March, Disney employees will be required to be in the office four days a week, Monday through Thursday.
“We are having a hard time operationalizing decisions quickly and thoughtfully. What’s more, we’re losing a connection to a shared mission, something bigger. Being together will give us a chance to work on all these things,” said Howard Schultz, CEO of Starbucks.
“Nothing can replace the ability to connect, observe, and create with peers that comes from being physically together, nor the opportunity to grow professionally by learning from leaders and mentors,” Bob Iger said in a memo to employees.
Disney’s prominence in the corporate world could spur other employers to follow suit.
“It is significant for Disney, an organization that is respected for its people-centric culture, to be making this decision,” Greg Barnett, chief people scientist at Energage, software firm that focuses on employee engagement, told the Society of Human Resources Management. “It sends a signal to other companies who have been internally debating the topic that it might be the right thing to do. It also provides air cover to senior leaders, because they can point to Disney and say, ‘It’s not just us.'”
And it’s not just Disney and Starbucks that are finding value in face-to-face interactions. The Wall Street Journal and Salesforce are among the companies where executives say the energy and creativity of in-person work is too valuable to lose.
“Our Success From Anywhere approach has made us more productive than ever. And yet, something is missing,” Brent Hyder, Salesforce’s chief people officer, wrote in 2021. “That intangible magic that comes from being with people. Sure, we’ve moved our brainstorms, offsites, happy hours and team-building activities onto Zoom, but it’s not quite the same as being in-person.”
A cooling job market gives leverage back to employers
Employers were lenient about office requirements in part because workers were so scarce from mid-2020 to mid-2022. The tech and finance sectors boomed, increasing demand for white-collar workers. As a result, employers had little choice but to allow workers to stay home if they wished.
However, the tech and finance industries are cooling, and many employers in Silicon Valley and on Wall Street have been laying off workers. Tech stalwarts Amazon, Google, Microsoft, Meta and HP have cut staff. So have formerly fast-growing upstarts like Lyft and Stripe. Goldman Sachs, Morgan Stanley, Credit Suisse and Bank of New York Mellon have combined to cut 15,000 workers in recent months.
None of that is good news for the office sector, of course, but it does give employers newfound leverage to enforce stricter rules about office attendance. If workers no longer feel confident that they can quickly switch jobs, they might be more willing to resume their commutes – and perhaps even find that they were missing out on some valuable in-person interaction with colleagues and clients.
Just to be clear: Despite the headline-grabbing layoffs in recent months, the U.S. labor market remains very strong. National unemployment was 3.5% in December 2022, according to the Labor Department, a number that fits any definition of full employment.
In Florida, meanwhile, unemployment was a rock-bottom 2.5% in December, the Labor Department reports. And the state’s year-over-year job growth of 4.8% trails only Texas’ 5%.
That robust job growth is driving demand for office space. Office users continue to snap up Florida office space at a pace of millions of square feet per quarter. Office tenants view physical workspaces as places where collaboration and culture-building can be achieved far more effectively than by Zoom meetings. Despite headwinds from the shift to virtual work and a slowing economy, employers continue to value office space – and Florida has emerged as a prime beneficiary of demographic trends.
The type of space matters
Every employer recognizes that talent management has evolved. No longer can the boss tell workers what to do and expect them to obediently fall in line. Twitter, for instance, lost a number of employees after it reimposed work-from-office requirements.
If managers insist that workers return to a drab office in a bland location, chances are some of them will start sending out resumes. Employers can smooth return-to-office edicts by ensuring that the office is a place workers want to be.
At Feldman Equities, we’ve built a portfolio of office buildings in thriving downtowns. And we’ve renovated workspaces to match the vibrancy of the surrounding neighborhoods.
Workers are energized by freshly refurbished space that’s fully amenitized and optimized for productivity. Our properties include fitness centers, conference centers, and tenant lounges.
The lobbies, parking entrances, elevators and bathrooms have been renovated to provide a clean, modern, energizing feel. Even something as subtle as lighting makes a big difference – generous indirect lighting make spaces feel brighter and more hospitable.
That’s the caveat to the return-to-office trend: Provide workers with bland workspace in unexciting locations, and of course they’ll feel unenthused about returning to work. But give them modern facilities and amenities, and the commute doesn’t seem so bad. That’s why downtowns in Miami and West Palm Beach are in the midst of office building booms, and the central business districts in Tampa and St. Petersburg are at all-time high occupancies.