As the brutal 94% devaluation of WeWork (the American commercial real estate start-up providing shared workspaces) proves, the COVID pandemic has brought the future of office space forward. In recent weeks, Facebook, Twitter, and Shopify have all announced that they are going to continue to allow employees to work from home indefinitely. Other corporate giants such as Morgan Stanley, Mondelez, Nationwide Insurance, and Barclays are strongly considering doing the same. Social distancing regulations, shrinking of open plan and flexible workspaces, questions around the comfort of working around a communal table and a growing preference for working from home all place not only the WeWork business model but office spaces in general, in jeopardy.
Forced remote working has made many question their daily commute in overcrowded, overpriced and overdeveloped cities. Newly-tasted flexibility and greater work-life balance are making many employees question whether they want to return to the office. If you can now work from anywhere, why pay £2,000/month in London for a dingy one-bedroom apartment when you can live in a two-story home with a huge yard and swimming pool in Bath? Why spend two hours a day in traffic in Sydney or Melbourne when you can enjoy the same quality of life somewhere smaller and quieter? The big losers in the next 12-18 months will be firms that ignore COVID concerns raised by their team, dismiss home office requests and fail to consider staff anxiety. Businesses with short term views will lose out to those who adopt a long term remote working strategy.
In this VUCA (volatile, uncertain, complex and ambiguous) environment, you need to start thinking creatively about what to do with your overcapitalised office space. The most obvious starting point is to negotiate your lease with your landlord. COVID regulations will allow far fewer staff per square metre - meaning commercial real estate costs will now be overvalued and unsustainable. If landlords don’t realise this, chances are their tenants will go out of business. Hustling to sub-lease your space or only using it three days a week so you can at least save on some of the running costs might be other avenues to consider. The all-in total cost of offshoring (where real estate costs in a city like London or Sydney don’t need to be factored in) is also worth exploring.
Most of all though, think about what tools you will use to build your culture if a cool office space with a pool table and beers on a Friday is no longer part of the equation? How do you build a remote culture that ensures business success? As Lindsay McGregor and Neel Doshi’s book Primed to Perform highlights, human psychology builds high performing workplace cultures. The bottom line is: Why we work determines how well we work. And why do people work? Research has shown the six main reasons people work to be: play, purpose, potential, emotional pressure, economic pressure, and inertia. Importantly, high-performance cultures maximise the first three motivators and minimise the second three. This is known as creating total motivation (ToMo). All of these tools are adapted for remote work - so office space is no longer part of building a great culture. If you’re considering offshoring, ask your provider what tools they use to build culture? Do they provide coaches who conduct regular one on ones? Are these growth and problem-solving meetings, aimed at developing careers? As per Verne Harnish’s ‘Scaling Up’, do they facilitate a learning culture where training is given to develop better leaders and better contributors to society? In short, there are many ways to show your team you give a damn beyond Pizza Fridays and fruit in the kitchen, ensuring not only that office space is no longer relevant, but that your business adapts, cuts costs and thrives in challenging and changing times.
For detailed questions around how an offshore provider can help you think about office space and culture in new ways, as well as other areas to consider, click here to download our eBook 'The 30 Essential Questions to Ask a Provider Before You Outsource’. It will ensure you're informed and have the right questions to ask when considering the next step.