Will people return to the office?

[goldenvalley]

There has been some speculation about whether people will return to the office or will continue working remotely.  I sense that managerial types might prefer in office work so they can manage "by walking around."  

While I've been thinking in terms of office spaces being empty or perhaps repurposed for some other use (housing somehow?) I didn't think about this.

For most media and Hollywood types, the office wasn’t much to brag about: a mishmash of cubicles and meeting rooms, with a second-rate coffee machine and an old water cooler. But tech companies’ multimillion-dollar campuses are specifically designed to keep employees from leaving, with on-site gyms, catered meals, fun little scooters and bikes to zip around on, and countless other amenities. The purpose and future of these spaces is an existential question. “We have these campuses that are hundreds of thousands of square feet big, with dry cleaners, and massages, and bus systems to get our employees to the office and back. Do they shut all that stuff down?” asked one tech executive.

... One employee of a major tech company who was recently enticed to come back to the office was offered a $500,000 stock bonus to be closer to campus, but ultimately chose to turn it down. “I’m happy with my life the way it is now, and I’m a hundred times more productive,” they said. “They can turn the campus into a museum as far as I’m concerned.”

From a Vanity Fair article.

[LFC]

Jul 12, 2021 16:59:44 GMT goldenvalley said:

There has been some speculation about whether people will return to the office or will continue working remotely.  I sense that managerial types might prefer in office work so they can manage "by walking around." 

My office is apparently being completely reconfigured for part-time in office work with almost all desks being no longer permanently assigned.

[Bact PhD]

In our line of work (from which we’re retired), this isn’t up for debate. Although one can do literature searches and write stuff at a Home Office, the actual lab stuff still has to be done in a lab, with the equipment, supplies, and instruments. Let’s face it, the neighbors would look askance at the garage laboratory…

[LFC]

Jul 12, 2021 18:58:51 GMT Bact PhD said:

 Let’s face it, the neighbors would look askance at the garage laboratory…

Sure, when you put a sign that says "Wuhan USA" on the outside.

[Bact PhD]

Jul 12, 2021 19:43:36 GMT LFC said:

Sure, when you put a sign that says "Wuhan USA" on the outside.

Now, that might be a way to keep the dog walkers from leaving “deposits” on my lawn.

[LFC]

My company recently announced that the office will remain shut until 2022. They were thinking of opening up in September until the Delta wave hit.

[Rue Bella]

The lady next door works in a bank. Something to do with housing loans. She had been totally working from home since last year. When her bosses said she needed to start coming back into work 3 or so times per week (a couple hour round trip), she quit and got a job at another bank doing the same thing. The new bank is local, and only requiring her to come in once per week. I don't know if income is the same.

[goldenvalley]

My husband's firm has yet to make a decision one way or the other.  More people were going into the office in the last 2 months but not 5 days per week.  A few people went in every day throughout this time saying they just couldn't concentrate at home.  That was allowed...hardly anybody was there.  It must have been a little spooky...lights are on motion detectors so hallways were dark, no sound of other humans.

[baw1064]

I've been back at the office (mostly) for the last few weeks, after being away for 15 months. It's kind of nice, to an extent. With Delta, this may not last.

[andydp]

Spoke to my son yesterday:  he's still on two days home and every other Friday at the office.  Daughter in Law is going back.

A friend with DHS in DC says there is a LOT of talk about downsizing office space needs and having a lot of work done at home. 

 

[LFC]

Wow, this is something that could destroy WFH if it happened in America.

A German court has ruled that a man who fell down a staircase while walking from his bedroom to his home office injured himself at work and is therefore covered under his company’s workplace accident insurance policy.

In a ruling published on Wednesday, Germany’s Federal Social Court delivered a victory for an unnamed area sales manager who broke his back at home in 2018. The man, who typically started his day without having breakfast and headed immediately to his home office, slipped on the spiral staircase in his apartment while walking down a floor to his home office and broke a thoracic vertebra.

According to online court documents, which were translated to English using Safari, a lower court had previously ruled that the man’s walk to his home office was not an “insured company path,” but rather “an uninsured preparatory act that only precedes the actual insured activity.” The employee appealed the decision to a higher court.

In his appeal, the employee argued that employees who work from home should not receive less protection from accident insurance than others in the company. He pointed out that during the current pandemic, many people worked from home in Germany.

[LFC]

These observations and predictions come from the CEO of a company that helps companies set up a remote workforce so it's a bit of a biased source. Still, most of what he says is based upon speaking to many companies and hearing the same things over and over again.

I imagine that companies that refuse to take WFH seriously, won't meet the increased prevailing wages, won't give up on two weeks being all the vacation anybody gets, won't provide decent health insurance, and won't clean up dangerous work conditions are going to be relegated to attracting the bottom of the barrel. Then they'll complain (Ooooohhhh, how they'll complain!) about being unable to hire people. One of his predictions is that there will be companies that go out of business over WFH. That might be an overstatement but coupled with one more more of the above and I could see a company unable to hire a quality workforce, unable to retain remotely decent people, and end up being choked from taking advantage of growth opportunities when they arise.

[LFC]

Elon Musk wants his executive staff back in the office for a full 40 hours. How long before that filters down to the office in general?

Tesla CEO Elon Musk gave his executive employees an ultimatum in an email yesterday: Return to the office full time, or leave the company.

A leaked email from Musk began circulating on Twitter today with the subject line reading “Remote work is no longer acceptble [sic].” The email—posted by Sam Nissim—was sent to “ExecStaff” on May 31, and explains that executive employees must be in Tesla’s office for a minimum of 40 hours per week. Any remote work must be done outside those hours. “This is less than we ask of factory workers,” the email reads, and Musk says that if full time in-office work isn’t possible for “particularly exceptional contributors,” then he will personally vet their situations and offer any approval accordingly.

When Whole Mars Catalog asked Musk on Twitter for his opinion on those who think that a 40 hour in-office work week is an antiquated concept, Musk replied: “They should pretend to work somewhere else.”

Industry management still isn't fully on board with the whole work from home thing, though there's been a little bit of a shift.

This email comes during a return-to-work migration for many companies in the wake of covid-19 stay-at-home orders, and some employees are not incredibly keen on a full-time return to office. According to CNBC, 64% of surveyed workers would consider quitting if they were required to return to the office full time. Morning Consult also found that three out of five surveyed tech workers were not interested in returning to work. But managers don’t seem to be getting on board: Robert Half Talent Solutions found that 66% of surveyed senior managers in 2022 want employees back in the office full time, which is down from 71% in 2021.

The only problem is that productivity can actually be higher when employees are able to work from home as opposed to an office. Great Place to Work found that productivity improved when comparing a six-month stretch of the covid-19 stay-at-home orders in 2020 to the same time period in 2019. Prodoscore found similar results: a 47% increase in productivity in March/April 2020 when compared to March/April 2019.

[pg]

My rant:

Dear god in heaven...The places in the ATX are requiring/demanding that staff come back to the office. Many (look at GV's post, above) are simply saying "nope"- quit, and move to a better space. Not the only city in the world to do this.

In my city, we "ain't that special", except for the fact that we live under TX rules. Masks? Lol...A thing of the past. Summer is a time when half the world comes in for various conferences/meetings/festivals. And it's really not pretty. DUH, kids. Why are COVID (and wth is Monkey pox? Here, now) on the rise. The entire city is one giant super spreader. Again- not the only city to experience this.

To the offices: I look back on how the tekkies built their office spaces. Huge, wide open spaces. Sure, I'm older and did think that was crazy, even though collaborative. During the pressing COVID conditions, partitions were built, masks were mandated and safety was above all. Now? All gone.

The educated ones say NO to going back to the office. They've just learned about how to stay super-productive safely in their home environments where they have control. And most simply say "isn't it interesting that you could live without me in the office for a very long haul- and now it's emergent that we have to go back?" Stuff I hear is fascinating. Very, very savvy younger folks out there who suspect:

This is in part all about real estate and building. Our city never stopped building. Goodness- I've seen the skyline view I have change 3 times in the last 10 years. Huh. Somebody's got to justify the costs of all of that. Huge corporations with huge capital investments in the RE who used to be able to justify passing on the increases to clients. A dollar here, a million or so there, no biggie.

But now there's push back. As GV has suggested, sure- use it as housing, perhaps. Hard to get the $$$$$ for that.

For the first time in a long time I say let the Millenials and younger speak reason. They are fearless and whether anybody gets it or not, they're controlling this. Good on them. For the first time in a long time, the younger set is listening to the older set. And they are onboard.

GO, KIDDOS!

[goldenvalley]

Jun 2, 2022 18:53:51 GMT LFC said:

Elon Musk wants his executive staff back in the office for a full 40 hours. How long before that filters down to the office in general?

Tesla CEO Elon Musk gave his executive employees an ultimatum in an email yesterday: Return to the office full time, or leave the company.

A leaked email from Musk began circulating on Twitter today with the subject line reading “Remote work is no longer acceptble [sic].” The email—posted by Sam Nissim—was sent to “ExecStaff” on May 31, and explains that executive employees must be in Tesla’s office for a minimum of 40 hours per week. Any remote work must be done outside those hours. “This is less than we ask of factory workers,” the email reads, and Musk says that if full time in-office work isn’t possible for “particularly exceptional contributors,” then he will personally vet their situations and offer any approval accordingly.

When Whole Mars Catalog asked Musk on Twitter for his opinion on those who think that a 40 hour in-office work week is an antiquated concept, Musk replied: “They should pretend to work somewhere else.”

Industry management still isn't fully on board with the whole work from home thing, though there's been a little bit of a shift.

This email comes during a return-to-work migration for many companies in the wake of covid-19 stay-at-home orders, and some employees are not incredibly keen on a full-time return to office. According to CNBC, 64% of surveyed workers would consider quitting if they were required to return to the office full time. Morning Consult also found that three out of five surveyed tech workers were not interested in returning to work. But managers don’t seem to be getting on board: Robert Half Talent Solutions found that 66% of surveyed senior managers in 2022 want employees back in the office full time, which is down from 71% in 2021.

The only problem is that productivity can actually be higher when employees are able to work from home as opposed to an office. Great Place to Work found that productivity improved when comparing a six-month stretch of the covid-19 stay-at-home orders in 2020 to the same time period in 2019. Prodoscore found similar results: a 47% increase in productivity in March/April 2020 when compared to March/April 2019.

Theory...Musk wants people to quit in disgust.  He needs to downsize the company and doesn't want to lay people off so he makes this demand.  

[LFC]

Jun 2, 2022 23:23:01 GMT goldenvalley said:

Theory...Musk wants people to quit in disgust.  He needs to downsize the company and doesn't want to lay people off so he makes this demand.  

That's a great way to get your most desirable and employable elsewhere people to leave.

[AnBr]

And you think he thought this through? His Twitter escapade suggests that he does very little of this.

[LFC]

Barry Ritholtz wrote a response to an opinion that WFH isn't working well.

Normally, I am a fan of Steve Rattner’s work. The former Obama “Car Czar” makes great charts and seems to be a fairly level-headed asset manager. But in the great baseball game of punditry, we all occasionally step up to the plate and whiff.

Such a down on three swings was contained in his recent NYT Op-Ed, “Is Working From Home Really Working?” Every single paragraph has something you can legitimately push back against.

Let’s start with this simple observation: Americans’ attitudes towards work were less changed during the pandemic than they were revealed. This is a nuanced difference, and if you miss this you are going to miss much of the arguments taking place today between WFH/RTO.

Europe has much higher return to office figures, but then there are good reasons for that.

The pandemic revealed what a colossal waste of time and disruption commuting in America is. Our mass transit is shit; we live too far from our jobs because of the cost of housing; the indignities and frustrations of merely getting to and from work in an automobile-based society are endless.

Compare the American experience – which is running at ~60% of full office capacity – with that of Europe, which is more than 90% back in the office. As I observed last month, the reason “why RTO has been so difficult is that the traditional urban/suburban business district/bedroom community in the USA is broken.”

In Europe:

-Mass transit is 10X better

-People live closer to where they work

-Their houses are cheaper (but much smaller)

-Childcare is more available (and often free)

It’s no surprise Europe has found it easier to get people back to the office.

We should think of the 40% of Americans who are still WFH not as the problem, but as a symptom of the larger concern. If you want them to return, then deal with these underlying issues. Hey, I get it, it’s much easier to whine about WFH (the symptom) rather than treat the underlying issue — a complex and expensive task that would require reorganizing much of society.

One comment I'd make in the list of what Europe has going for it is that, because their houses are much smaller, it is more difficult to work from home in relative peace and quiet when little ones are running about. Literally just one person I worked with closely, out of dozens, preferred to be in the office but he didn't have a spare room for an office, had to set up in his living room, and had 3 small children. I totally get that.

[goldenvalley]

Apr 5, 2023 19:30:45 GMT LFC said:

Barry Ritholtz wrote a response to an opinion that WFH isn't working well.

One comment I'd make in the list of what Europe has going for it is that, because their houses are much smaller, it is more difficult to work from home in relative peace and quiet when little ones are running about. Literally just one person I worked with closely, out of dozens, preferred to be in the office but he didn't have a spare room for an office, had to set up in his living room, and had 3 small children. I totally get that.

Very true.  My husband noticed a coworker who had 2 kids at home and had adopted a puppy literally the week before the emergency orders were instituted.  As soon as the office was open as an option, he was in the office. 

[LFC]

WFH is looking like it's pretty entrenched.

Interestingly I've read several pieces that say the predicted great migration out of urban areas due to WFH are basically not really happening. Turns out that cheap housing and costs of living aren't worth the price aren't worth it if it means living in bum-f*** Redstateville. I guess people don't want to raise their children in a land of Bible thumping, bigotry, and piss poor education systems.

[goldenvalley]

Apr 26, 2023 16:55:18 GMT LFC said:

WFH is looking like it's pretty entrenched.

Interestingly I've read several pieces that say the predicted great migration out of urban areas due to WFH are basically not really happening. Turns out that cheap housing and costs of living aren't worth the price aren't worth it if it means living in bum-f*** Redstateville. I guess people don't want to raise their children in a land of Bible thumping, bigotry, and piss poor education systems.

I've seen my husband's office has a partial return to the office...a couple of days a week.  It is causing his business to re-evaluate how much space is needed...especially in terms of conference rooms now that Zoom or Teams has become so commonly used...and clients are reluctant to pay for travel to meetings when videoconferencing can be done.  I think there will be some down sizing of leased office space for that reason. I don't think large offices will close down completely.  It will take several years before it all shakes out.

[LFC]

Apr 26, 2023 17:39:59 GMT goldenvalley said:

I've seen my husband's office has a partial return to the office...a couple of days a week.  It is causing his business to re-evaluate how much space is needed...especially in terms of conference rooms now that Zoom or Teams has become so commonly used...and clients are reluctant to pay for travel to meetings when videoconferencing can be done.  I think there will be some down sizing of leased office space for that reason. I don't think large offices will close down completely.  It will take several years before it all shakes out.

My company has shut down one satellite office, is in the process of shutting down the other satellite office, and is allowing our main office lease to expire in order to downsize. I think daily attendance at the offices was running around 5%.

[goldenvalley]

Apr 26, 2023 20:17:12 GMT LFC said:

Apr 26, 2023 17:39:59 GMT goldenvalley said:

I've seen my husband's office has a partial return to the office...a couple of days a week.  It is causing his business to re-evaluate how much space is needed...especially in terms of conference rooms now that Zoom or Teams has become so commonly used...and clients are reluctant to pay for travel to meetings when videoconferencing can be done.  I think there will be some down sizing of leased office space for that reason. I don't think large offices will close down completely.  It will take several years before it all shakes out.

My company has shut down one satellite office, is in the process of shutting down the other satellite office, and is allowing our main office lease to expire in order to downsize. I think daily attendance at the offices was running around 5%.

Maybe vacancy or rather occupancy rates will vary by the type of business.  Law has become increasingly online but until the old folks retire there will be a push for being in the office at least for internal team meetings, mediation/arbitration/trial prep.

[pg]

Look into the relationship between bank failures, some teetering on the edge , and commercial real estate. Not everything is about big companies filling cubicles. So much of CRE is about filling it with Main Street businesses who simply can't afford the nose-bleed prices to lease. Today's market is yesterday's learning curve: Why would most want to pay huge rents and/or large interest rates to purchase for commercial space when you have a trained workforce happy working from home? Meanwhile, in most cities the residential market has kicked into the work/live spaces. Hard to re-entice employees back into cubicles when they have their own work/live space that they're happy with?

Today's RE markets reflect yesterday's learning curve: If you can't fill it, kill it. Rents/buying costs and above all, construction costs are at play. Stagnation pains are here.

Case in point: What was planned and touted as TX's tallest structure in DT Austin was just cut in half. Developers have been classy, but they just don't see ROI.

www.yahoo.com/news/plans-80-story-residential-tower-110228345.html?fr=yhssrp_catchall

Bound to happen, and not the only city going through this.

[LFC]

WFH seems to be putting pressure on office space.