With the biggest effects of the pandemic seemingly passed, the debate about whether to return to the office is heating up. Employers must thoughtfully weigh the costs of asking employees to return to the office and consider whether they themselves want to return to the traditional office. The solution might just be embracing a decentralized office model.
The pandemic drove everyone out of the traditional office and into a whole new work environment: their homes. Desks sat vacantly — sometimes for years — while everyone adapted to video calls and adopted new ways of communicating. Now that COVID-19 has largely been controlled, there’s been a debate about the return to — and even the necessity of — physical office spaces.
Some business leaders want everyone back at the office, while others, perhaps reluctantly, are adopting remote work. The tension between these approaches is deepening and affecting both the company’s bottom line and employee morale.
Employers need to carefully weigh the potential costs of asking employees to return to the office and consider whether they themselves want to return to the traditional office. Leaders should ask the central question: Is the office even necessary with how our business functions today? Exploring a potential middle ground — such as decentralizing and offering branches closer to where employees live — can be an effective solution to the return to work quandary.
Prepare for the New Price Tag That Comes With a Physical Office
Having everyone back in the office sounds like a good idea at face value. However, employees have grown accustomed to fewer commutes and more time with families and pets and might value those benefits immensely. Consequently, if employers ask employees to return to the office, there needs to be a clear motivation and discernible benefit in doing so.
For instance, although cohesion and innovation are often cited as top priorities for returning to the office, research indicates that productivity and relationships have done well during remote work. Employees are keenly aware of their worth in a tight labor market and could resent a top-down mandate on time in the office.
Forcing employees in — especially if they strongly prefer remote or hybrid roles — can cause burnout, disengagement, and, potentially, resignations. Decision makers should be wary of being too heavy-handed on in-office requirements and have a planned-out and well-reasoned response to potential employee pushback.
Lead by Example — There Are Costs to Not Doing So
Employers thinking about requiring in-office mandates should ask a central question: Are they prepared to do what they ask of employees? There’s a fair point to be made — if cohesion and culture are important, the company’s top leaders should be subject to the same requirements.
Workers are aware that C-suite leaders might have access to services such as nannies or daycare that are out of reach for some employees. Because of those resources, in-office workers might be particularly upset when business leaders aren’t present. This is particularly important, as employees don’t want to return to the office because of factors such as long commutes and expensive and unreliable child care. For many people, going into the office would severely disrupt their families’ lives and finances after more than two years creating a “new normal.”
Women, working parents, and employees of color particularly have a strong desire to work from home, and a lack of attention to those groups’ needs is causing them to seek new employment. If employers need workers back in the office, they need to be keenly aware of how it appears if they themselves are not abiding by the same rules.
If You Need to Return to the Office, Consider Decentralizing
An attractive middle ground employers might explore is a decentralized office network. First, business leaders should evaluate their leases and look at the true cost of ownership items such as rent, utility expenses, common area maintenance, and option fees — and determine the benefit they’re getting against the costs of ownership in the current lease structure. Employers might see savings or relatively neutral costs after shifting away from a centralized office environment.
Real estate is typically the second largest expense for a company after payroll. Employers might be able to find a win-win for their employees by leaving expensive office leases and securing smaller-hybrid employee offices close to where employees work. Employers will cut down on overhead and retain the benefit of in-person office work environments, giving employees places to see their colleagues and focus. Employees — particularly in dense urban cities such as New York or Boston — will appreciate the diminished commute, the opportunity to walk or bike to work, and the ability to spend more time with their families.
The distributed office model has momentum. Matt Giffune, the co-founder of Occupier, a commercial lease management platform, shared that Occupier has seen a 33% increase in leases across its platform, suggesting that companies have moved toward decentralizing from their headquarters and opening branches closer to employees’ home bases.
However, Giffune is always quick to caution that this change can come with challenges. Companies must understand the legal and accounting implications of modifying their existing leases. Abandoning a large lease isn’t as simple as signing an amendment. Modifying a lease requires navigating complex issues — such as balance sheet adjustments — to maintain compliance with ASC 842. Companies need to work together to ensure that they’re balancing not only employee interests, but also following their other contractual obligations when approaching this issue.
The pandemic changed the office work dynamic and, consequently, the office environment. Employers should carefully consider what is lost and gained by mandating employees in the office — taking care to consider the optics if they choose not to return themselves — and make a decision weighing those variables. Additionally, employers should consider the more fundamental question of whether they should pivot away from traditional offices toward decentralized offices and meet employees where they are — figuratively and literally. In doing so, they can create happier workforces.
Written by Rhett Power.
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