Avison Young's commercial real estate blog
Fast-Forward: Accelerating trends in workplace consultingApril 20, 2020
I have been working as a workplace consultant for more than 20 years. When the first laptops came on the market in the late 1990s, we were already talking to our customers about modern and more flexible ways of working. Large companies such as Siemens and Hewlett Packard were pioneers in space-efficient office concepts including desk sharing and the possibility for employees to work from home. Since then, and even in the days pre-coronavirus, we have been repeatedly discussing with our clients why they do not offer home-office conditions for their employees; facilitating working solutions from home, the office or any other place (‘third places’). And the answer from many of the decision-makers was:
- Employees are less productive in a home office environment
- Managers must be able to supervise their employees
- Personal interactions with the team is important
- The spatial and technical requirements in most homes are poor or not available
I would categorise two type of groups when it comes to the office workers themselves: one, those who wish to clearly separate their work and private life and therefore associate their office space with work, and two, those who would like to work from home, often originating from very different personal circumstances. We know this. But if you look at the numbers of those who actually and regularly work from home, they are still relatively low in Germany. In Scandinavia, for example, they are already considerably more progressive.
In the days of COVID-19, the majority of ‘office workers’ in Germany work from home. I speak to representatives of companies every day, who are now working 100% virtually. And no one has said that it doesn't work at all. In my own experience at Avison Young, we are working from home where possible and my impression is that there are no technical problems with staying in touch, exchanging ideas and being productive. Sure, video conferencing can get tiring. But at the end of the day, you're glad to have spoken to or even seen your colleagues, clients or your boss. We should be aware that this was not possible 10 years ago. High performing data networks, cloud technology, free video chat programs, and screen sharing with others takes away the feeling of isolation at home.
On the contrary. Anyone who has a job knows what to do. That doesn't change in the home office. Sure, it's new and unfamiliar to many, but it works. And there are two central rules for all of this:
- Be reachable
- Do your job
There are many pieces of advice that have been sent around in the past few days about everything to consider when working in your home office. As most of us have never had an own dedicated office workplace at home, and very often there is just not enough space in our apartments, a lot of that advice simply doesn't work. It’s not one-size-fits-all. So again: be reachable, do your job. It doesn't matter if the cat is sitting on your lap. It's funny when the kids run into the camera shot during a video conference. If you have to go out for an hour in between and you answer an e-mail later, that's the way it is. And if you can answer your emails best on the sofa, do it. A note though about the dress code: choose something in which you feel comfortable but still remember you’re (often) on video. That´s all.
So that's today. Nobody knows how long we have to continue working in this situation and what experiences we will have at the end of it all. We started quite early to share our own experiences of working from home with our clients. By means of a small online survey circulated to a selected number of clients, we wanted to know how well remote working actually works, what problems existed or still exist, and whether one can imagine integrally including this manner of work in future planning. The initial results were very clear: almost all participants confirmed that, despite the lack of experience, working remotely from one day to the next was not a huge problem.
Another clear result was that working from home will be much more important than before the current pandemic.
Accelerating the digital transformation
In general, this state of crisis will “fast-forward” the digital transformation that is already underway. Things are moving faster now, because positive self-awareness among people around the world means that irrational resistance has been moved to the side. And, at the same time, we are miraculously experiencing how quickly nature and the climate can recover when factories and traffic comes to a standstill. Satellite imagery has revealed big metropolises free of smog; there is crystal clear water in Venice’s canals of and the fish are coming back to the city. Do we want to turn everything back to what it was before the pandemic? Do we want to get back on a plane for two-hour meetings? Do we want to continue driving into the city center every day to do an office job for 8 hours? I personally don't believe in it. I tend to believe that we will see a lot of things from a different perspective and will find sensible, new solutions.
In relation to our real estate industry – and as view of a workplace consultant offering guidance and expertise – I see the following trends and challenges in the coming weeks and for the ‘time after the crisis’ in the conversations in which we will support clients:
- Many commercial leases will become unstable, potentially disastrous. Rents are often no longer paid and no matter how long this situation proceeds, tenants and landlords will have to sit down at one table and find a common solution.
- Probably all companies will put their current office concept to the test. Today one reads that there is once again an increased demand for individual offices because the disadvantages of open space have been recognized in these times of contagion risk. Perhaps this is irrational, but here, too, real estate experts can support that planning.
- In many cities we had a classic landlord market pre-crisis. In my opinion, this will switch back to a tenant market. I expect the vacancy rate to be significantly higher as a result of the crisis and landlords will need to engage in active dialog with tenants to find sustainable solutions.
Though we are still early in learning and navigating the impacts of COVID-19, my conclusion at present is that the best thing we can do is to stay healthy. From there, we will have to accept that a lot will not be the same as before. But if we accept the challenges and see every change as an opportunity, we will emerge stronger from the crisis.
Michael Horn heads Occupier Solutions for Avison Young in Germany. He is based in Frankfurt.
The content provided herein is not intended as investment, tax, financial or legal advice and should not be relied on as such. While information in the article is current as of the date written, the views expressed herein are subject to change and may not reflect the latest opinion of Avison Young. The spread of COVID-19 and the containment policies being introduced are changing rapidly. Like all of you, Avison Young relies on government and related sources for information on the COVID-19 outbreak, such as the World Health Organization, Government of Canada, U.S. Centers for Disease Control and Prevention, UK Government, and Johns Hopkins University COVID-19 Case Tracker.
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