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New offices for the hybrid era?

OMAHA, NEBRASKA (AP) – If you build a shiny new office building, will your employees show up to work in it?

Many United States (US) companies are banking on it because they believe working in person is better for collaboration and training young employees.

Businesses recognise there is a place for offices despite the fact that they plan to give workers more flexibility to work from home and might see cost savings from limiting their real estate holdings.

In a sign of how committed companies are to keeping offices, some 57 per cent of the more than 2,300 office projects that giant architecture firm Gensler is now working on were started last year, in the middle of the pandemic.

But as they’re building, companies are tweaking designs to reflect that offices may become spots that workers visit primarily to collaborate with others, instead of places where they toil all day, every day.

The co-firm managing principal at Gensler Jordan Goldstein said companies are placing a premium on having more meeting rooms with the technology to accommodate remote and in-person participants, as well as more flexible space for people to choose where they work within the office.

The number of people working remotely is clearly growing because so many companies learned they could do it during the pandemic.

The Society for Human Resource Management estimates the number of totally remote workers will double to roughly 36 million people by 2025. But the CEO of that trade group, Johnny C Taylor Jr, said that will still only account for a little over 20 per cent of the workforce. The other nearly 80 per cent will work in an office at least part of the time.

Another survey done last year by CBRE Group, the world’s largest commercial real estate services and investment firm, showed that 87 per cent of large companies planned to use a hybrid schedule after the pandemic, with workers in the office part of the time.

And separate worker surveys that SHRM and Gensler conducted last fall both showed that more than half of workers wanted to be back in the office at least one day a week.

But so far businesses have been slow to bring employees back. An average of 36.8 per cent of the workforce was back in offices during the fourth week of February in 10 major US cities monitored by Kastle Systems, which tracks building access-card swipes.

One high profile project already underway is the new New York City home for bank JP Morgan Chase. JP Morgan CEO Jamie Dimon has said that the rise of work-from-home might mean the company only needs 60 desks for every 100 employees because they will be shared.

But he remains committed to a new headquarters for 12,000 to 14,000 of the bank’s employees because many tasks will still need to be done in person. Deluxe invested USD12.2 million during the pandemic in a new 94,000-square-foot Minneapolis headquarters that opened last fall.

When they return on a more regular basis later this month, employees will be expected to be there more often than they work from home.

But the new headquarters is less than one-third the size of Deluxe’s old one. The company cut its overall real estate footprint in half nationwide to better reflect its current needs with more people working remotely.

Deluxe CEO Barry McCarthy acknowledges that parts of each of his employee’s jobs can be done remotely, but coming together and being able to work as a team is a bigger element.

“There are very, very few jobs that are just individual contributor jobs with little or no interaction required from others,” he said.

McCarthy, like many CEOs, said he believes office work is better for training and mentoring younger employees because they can watch and interact with their coworkers better and get more immediate feedback on their work. And then there are companies that plan to largely do away with their offices in favour of remote work. But even those firms may keep a small office presence.

Intradiem CEO Matt McConnell said the software company had its most profitable year ever in 2021 and didn’t miss a beat while its 150 employees and 75 contractors were all working remotely.

After checking with employees, the company shifted to a remote-first plan and will let its current headquarters lease expire at the end of 2022.

“It’s just this big, empty space that no one is using. It doesn’t make any sense to maintain that,” McConnell said.

But Intradiem, which is based in Alpharetta, Georgia, will likely still maintain a smaller headquarters with space for its IT workers to put together equipment to send out to home-based workers, and the company will encourage teams to occasionally get together in person.


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