The COVID-19 pandemic has had a material and unprecedented impact on the global economy, radically disrupting work environments right around the world.
Work from home has prompted corporate occupiers to seek more flexible work arrangements and technology is enabling companies to allow remote working.
This has enabled firms to change how they use space. Having a historic one desk for every person has been replaced by one desk for one plus people.
With the “crash course” on remote working, organisations are seeing what agility really means to their organisation.
Some will struggle, others will thrive.
Firms will have a much clearer understanding of their ability to implement greater agility solutions and this will likely result in companies changing their size needs – needing less.
On the flip side, the institution of social distancing requirements has resulted in a decrease in office density, so more space is needed to accommodate the same number of workers. Taking into consideration both forces, we believe that in the short term, the prevalence of working from home will reduce the immediate need for expansion space by firms, and over time we believe that organisations will require less space on the net basis in the long term.
If numerous companies opt to save on real estate costs and let a large proportion of their workforce to work from home, this could lead to a structural shift with office demand remaining muted in the long run. To better gauge future office demand, we can look to the intentions of banks and tech firms, which are huge occupiers of prime office space across the globe.
In Singapore, the finance and tech sectors occupy more than half of Grade A CBD space. Already, major international banks have indicated that they will allow a significant proportion of their employees to work from home. Barclays declared that there would be a long-term adjustment to their location strategy and would be re-evaluating their space needs going forward, with CEO Jes Staley noting that headquarters built to accommodate thousands of staff could be a “thing of the past”.
Other chief executives have chimed in with similar views. Morgan Stanley CEO James Gorman stated that the bank would have “much less real estate” in the future, while Societe Generale CEO Frederic Oudea said that around 20 per cent of its staff would continue remote working even after the crisis. Standard Chartered chairman Jose Vinals opined that there would not be a need to have 100 per cent of people in the office 100 per cent of the time.
Meanwhile, Mr Christian Sewing of Deutsche Bank noted that this presented an opportunity for the bank to realize substantial savings in real estate costs.
Large tech firms have also been very supportive of long-term remote working. For instance, Twitter and Square have announced that all of their employees would be able to work from home indefinitely.
This shift in attitude was surprising, as tech firms have long believed that in-person interaction was crucial in promoting creativity and gaining a competitive edge.
Concerns by tech CEOs such as Mark Zuckerberg that remote working would reduce the productivity of their software engineers have also been dispelled during the lockdown period. Mr Zuckerberg was impressed by the focus maintained by his staff, and unveiled a plan for up to half of Facebook’s 48,000 workers to telecommute permanently within the decade.
The firm plans to adjust wages based on employee location, with lower pay for those who reside in more affordable cities. There will also be savings on the services provided for on-campus employees such as free cafeterias, dry cleaning, and massages.
As we look to the future, we know the new workplace is no longer a single location but an ecosystem of a variety of locations and experiences. This shift is going to have a significant impact on the way we work, the real-estate footprint, and the technology that is going to support this new work paradigm. This will have significant implications for Singapore’s Grade A CBD office market.
Marina Bay has been long-regarded as the premium submarket, with a huge proportion of its tenants comprising of finance and tech firms. Should these firms go through with their long-term remote working plans, the rental differential between Marina Bay and the other submarkets is expected to narrow.
Even if the office demand remains muted in the long run, the Government has already stated its intention to focus on its decentralisation initiative and tighten future supply in the CBD, which will aid in mitigating any reduction in demand. Corporates may now seriously look to de-centralised location with Grade A specs either as an alternative to CBD or split operations.
In response to the COVID-19 pandemic, Cushman & Wakefield introduced Experience per Square Foot database (XSF@home), a statistically based analytics diagnostic designed to measure employee experience in the current environment, uncover insight into employee logistical and psychological needs, and capture ideas to prepare for the eventual return to the office.
It is a tool to enable businesses to understand how their employees are coping with work from home conditions and what they most need to remain healthy, happy, and engaged.
Through our bespoke, we have analysed more than 2.5 million data points driving workplace experience from workers all over the globe in the pre-COVID-19 era and a further 1.7 million data points from more than 50,000 respondents worldwide in the recent work from home environment.
In preparing the workplace for people who needed to come back to office, companies have to consider a variety of pre-workplace return checks, tasks and assignments.
The New Office
A first-to-market concept aimed at social distancing guidelines, reduction of overall touchpoints, occupant capacity, one-way circulation & personal hygiene. The key elements of this concept were:
- 6 Feet Quick Scan: A concise but thorough analysis of the current working environment in the field of virus safety and any other opportunities for improvement.
- 6 Feet Rules: A set of simple and clear workable agreements and rules of conduct that put the safety of everyone first.
- 6 Feet Routing: A visually displayed and unique routing for each office, making traffic flows completely safe.
- 6 Feet Workstation: An adapted and fully equipped workplace at which the user can work safely.
- 6 Feet Facility: A trained employee who advises on and operationally ensures an optimally functioning and safe facility environment.
- 6 Feet Certificate: A certificate stating that measures have been taken to implement a virus-safe working environment.
The concept to maintain a safe distance of six feet between individuals, starts at the entrance to the building. Indicating the desirable distances near the reception desk and by the lifts is easy if you use visual elements such as stickers on the floor.
In conference rooms, seats for meeting participants will be placed at adequate distances, and arrivals and departures will follow rules.
Each workstation has to be sanitised, so each employee should have sanitisers on hand to sanitise their work stations at the beginning and at the end of their working hours.
For shared workstations, it is possible to improve sanitation using one-off desktop paper pads that the employees simply throw away once they have completed work.
How to return to work safely
While this is the ideal safe environment for workers, we recognise that in this difficult period, firms may not have the resources to fully transform their offices. Here are some tips and guidelines on how firms can still work around their budgets to get their employees safely back to the workplace.
Return of Cubicles
Open offices could become a thing of the past as the very nature of their open and dense design also increases the ease of transmission of infectious diseases.
A return to the days of cubicles will provide physical separation between workers and reduce the circulation of airborne droplets. Firms which want to maintain a “semi-open” look may opt to replace cubicle walls with plexi-glass dividers.
Increase in Size and Number of Meeting Rooms
With the need for participants in a meeting to be seated apart, existing small meeting rooms will need to be enlarged. The number of meeting rooms will also need to be increased as group conversations which used to take place at the aisle, employees’ desks, pantry, and other common areas should be shifted to meeting rooms to adhere to social distancing requirements.
Evolution of Co-Working
Hot-desking should be replaced by assigned seating to reduce the spread of infectious diseases should a co-working member fall ill.
Increasing the proportion of private offices is a sound plan as members working in these enclosed spaces are less likely to be affected by an outbreak in the open seating areas.
Large open areas for members to socialize could become a thing of the past. These open areas can be converted into private offices. Firms can use co-working spaces as part of their business contingency plan by placing a back-up team in these private offices. In the event of an outbreak in the firm’s own office space, the back-up team will be able to replace the main team.
The above article originally appeared on The Straits Times on 30 August 2020.
