What Do We Need an Office For in the Future?

Since practically the beginning of 2020, companies from tiny start-ups to large publicly-traded corporations have had to adjust their policies and strategies regarding remote working. The novel coronavirus pandemic that saw the practically entire world shut down at unprecedented levels since mid-March has ignited with it a considerable amount of discussion about the advantages and disadvantages of remote working. Even before Covid-19, the idea of remote working was growing, with Richard Branson saying as early as 2013 “in thirty years’ time, as technology moves forward even further, people are going to look back and wonder why offices ever existed.” Many companies have already been operating as such for years, with the majority of younger generations such as millennials and Generation Z saying they have had a growing interest in working remotely, and Upwork predicted that by 2028 73% of all departments will have remote workers.

Regardless, this year was different. It wasn’t innovation that moved almost every company on the planet to integrate remote working into their infrastructure, it was a necessity. And as the world has slowly begun opening up again — albeit at varying paces in different countries, states, and even cities — businesses have been left with the difficult question of whether they ever really needed an office in the first place. A quick scan of the internet will find a great debate raging around the world on the future of office spaces, with many trying to return to the way things were while others claim the modern office is dead. At the end of the day, it will most likely be both. There are undoubtedly many benefits to be gained from remote working and it will likely remain a permanent way of working for many, but there is also still a huge value in companies retaining a dedicated office space. Companies will have to take a hard look at themselves in order to determine how and to what degree they will integrate remote learning and office space in the future. Below I explore the advantages gained from remote working as well as those that a dedicated office space provides in order to aid you in making the best decision for your company’s — and your employees’ — needs.

A potential increase in productivity…

Since the early 2010s when the widespread adaptation of wifi increased the ability for work-from-home scenarios, numerous experiments and studies have been put in place to try and determine whether the flexibility and lack of co-worker distractions result in an increase in productivity. A survey conducted by Canada Life found that home-workers ranked their productivity an average of 12% higher than those who worked in an office, and more recently a study by JDP found that of the 2,000 respondents two-thirds were convinced their productivity is as good or better when working at home versus at the office. This increased feeling of productivity could also stem from the feeling of autonomy that comes with remote working, with 92% of the respondents saying they believed their boss trusted them when working from home.

One study in 2013 by Stanford went beyond personal opinions and was able to identify a significant increase in productivity. In the study, a company of 1,000 had their employees divided by birth date, with those born on even dates working from home four out of the five day work week and those born on odd days staying in the office. The workers were easily tracked because the straightforward tasks and repetitive nature of their work made it easily quantifiable, and after nine months it was found that workers were 13% more productive at home.

…but difficulties can arise in communication

On the flip side, while working from home may help with increasing productivity, it also has the potential to cause serious communication issues. A common business school lesson involving decision making teaches you that there are two processes: formal and informal. Where formal processes such as a quarterly strategy meaning or an organizational chart are a vital aspect of decision-making, the informal processes such as an unexpected conversation with someone at the coffee machine or knowing who to talk to about getting things done can be equally important. No matter the number of video calls that are scheduled or emails that are sent, nothing can replace the natural ease and directness that comes with face-to-face communication. The office has the ability to not only be a place for your employees to work, but also a facilitator of important communication that can only come from spontaneous interaction.

Additionally, working from home can lead to an increased feeling of isolation among workers, resulting in low morale and a lack of community that can negatively affect company culture. Managers may find it much harder to check in with the wellbeing of their workers when they aren’t able to see them in the safe, shared space of the office where issues can be amicably discussed in the hallway or more privately in a check-in. This problem could only become more difficult as new hires are brought on, to the point where eventually nobody knows each other outside of the digital squares they see on a screen. Without the casual conversations you get from office life, it can be difficult to really get to know your colleagues, and if you’ve never interacted with someone in person it can be difficult to pick up on subtle body language cues and the intention behind a person’s email when you haven’t met them in person.

Remote working can save a company money…

Rent for an office space can end up being a significant portion of a company’s budget. If a company rents an office space then they can claim some of the costs back as part of their capital allowance, but it is still likely to be one of the biggest fixed costs a business has. Even having employees working from home for part of the week can reduce the amount of office space you need considerably, as a recent study from Global Workplace Analytics showed. The study estimated that an employee working from home half of the time would typically save a company $11,000 annually. In fact, the previously mentioned Stanford study initially began because the CEO of the company studied mentioned that the expensive Shanghai real estate was putting a considerable strain on his company’s financial resources.

For the employee, the Global Workplace Analytics study also found that they could save as much as $4,000 a year from reduced commuting and work attire costs. Whether it’s an hour-long train ride or a 30-minute drive through rush hour traffic, time spent commuting to work is time that employees will never get back, and a reduction in the amount of time spent on a potentially stressful and unpleasant commute can be a benefit not only to employees, but businesses too. The health and wellbeing of a workforce has proven links to productivity and a reduction in absenteeism, and when working from home, an employee arrives fresh at their desk and raring to go.

…but without an office you lose the “great equalizer”

Although for some remote working is as simple as walking into their home office and shutting the door, for others it may mean crowding onto the dining room table or even locking yourself in a bathroom to gain some peace and avoid distraction. During the coronavirus pandemic, Google gave each of their employees an allowance of $1,000 to expense necessary equipment and office furniture, but that money can hardly cover the difference between those who have a dedicated home office equipped with expensive technology and those who are simply struggling to find the space to place a desk so they don’t have to spend 12 hours a day at the kitchen table. Where one worker’s home can be vastly different from another’s, an office creates an even playing field.

These challenges can seep into a company’s culture and hierarchy, as junior staff are more likely to be found in a less-than-ideal living situation, whereas leadership will have the funds and space to make remote working comfortable. The visibility of this inequality can foster resentment between employees and their employers, resulting in poor work performance and communication. In addition to this, an employee could be perceived as having reduced productivity and be passed over for a promotion as a result, when the problem was not with their lack of dedication or motivation, but a poor internet connection and lack of resources another with greater means had.

A blended approach

While some are harbingering the end of the office and others are staunchly digging their heels into it, the fact of the matter is companies would be best served to remain flexible and incorporate elements of both. There is little doubt that remote working is here to stay, but it would be foolish to say that office life is dead because of it. Even prior to the pandemic, there was a historic need for separate spaces to accomplish different business needs. Often, while companies have used offices for staff to work and have general meetings at, they will choose to go outside for an off-side meeting in a hotel or resort when they want to brainstorm ideas or improve interpersonal communication. Now, businesses have found that working quietly from home or having meetings on Zoom is perfectly doable, but brainstorming and team reflection/feedback still requires a different environment — being together in person and in a somewhat secluded environment.

The office adds intrinsic value to a company’s culture, and businesses that find ways to create options to come into shared spaces to foster the sense of teamwork and provide networking opportunities will find that they are able to get the best of both worlds. This poses the question: to what extent are our offices as laid out today in architecture and size designed to meet those needs of future flexible working? The cost of a permanent office would be too high to just serve the purpose of social engagement, so companies will need to rethink and come up with innovative ideas to find the right solution to provide an optimal home and office work environment.

Follow Carsten Thiel on ThriveGlobal and carstenthiel.com

New York based Biopharmaceutical Expert. President of EUSA Pharma. Inspired by improving health through innovation. https://linktr.ee/carstenthiel