Companies rethink real estate needs after COVID-19
Office buildings sat empty for weeks to help limit the spread of COVID-19. Now, as stay-at-home restrictions are easing, many companies are re-evaluating their real estate needs.
In fact, some leaders may wonder whether they can divest of real estate altogether and continue to operate virtually. Just imagine: no more lease, property insurance, security contracts, housekeeping, office supplies…
Unfortunately, it’s not that easy to ditch an expense on the balance sheet. Every decision is a tradeoff — and usually comes with a replacement cost. As you evaluate your space strategy moving forward, here are three scenarios and considerations:
Go virtual
Virtual companies could save money on real estate and related costs, especially if they are located in expensive urban settings. But that money will need to be reinvested in other places, like IT security measures to ensure company and customer data are secure outside a corporate network.
If work and home are synonymous for an entire company, the business may bear some financial responsibility for ensuring business tools, connectivity, data speeds or phone plans are sufficient in employees’ homes. Companies could also put into place requirements regarding private or dedicated spaces in employees’ homes that aren’t attainable for every employee, causing them to lose high-performing or high-potential employees.
Virtual companies have to be comfortable letting go. When work isn’t performed on site, companies lose some control over the process and possibly the output. And to successfully lead a virtual company, leaders need strong relationships with their staff to connect people to the company and to one another.
Downsize
Some companies are considering downsizing their physical spaces and adopting a hybrid work style, where some work continues virtually and only essential meetings and services still occur on-site. Or they may rotate employees through a workspace to limit the amount of physical contact between workers.
In theory, less people do take up less space. But business executive and facility managers need to consider how spaces are currently configured and how they will need to be configured in the future. Open format offices or agile workstations may not satisfy new social distancing standards and safety needs.
Employees may need to be spread out differently to maintain social distancing standards — or simply to rebuild employees’ confidence in the workplace. You may need the same square footage you have today to safely support fewer people.
Adjust to new standards
Even companies that plan to keep their real estate strategy “as is” will need to make accommodations to keep employees safe and confident at work. That may mean enhanced cleaning schedules, raising the height of cubicle walls or changing cafeteria and kitchen layouts.
Some of the technologies that kept companies running during the height of the pandemic may continue once employees have returned to the office. Companies can keep the tools and virtual processes that worked well, like video conferencing, and reserve conference rooms and in-person meetings for topics that warrant it.
At least initially, the criteria for “Do we need a meeting?” now includes the potential costs to health and safety. People may be hesitant to congregate into a conference room — especially if there’s not a process for sanitizing spaces in between meetings or they are not able to maintain appropriate social distancing.
Perks like coffee, water coolers and refrigerators may be a thing of the past; despite any grumbling, companies need to make facility changes for the health and safety of employees.
Regardless of the way forward, employees are stepping back into a very different reality than they left (possibly suddenly) several weeks ago. Many employees will welcome the routine and social aspects associated with the office — but still struggle with small changes.
To get back to full productivity, communicate changes early and often, emphasize the resulting health benefits, and stay open to feedback. Use your space – or virtual work habits – to build a safe community for employees and stakeholders.
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