The Future Of The Distributed Workforce

There are many experts and specialists currently letting the rest of us know how the future of work will look, many of them rooted in the world of corporate real estate. Anyone who is claiming they've figured it out, hasn't. This includes me, which is why I'm going to focus only on what is happening now, what I see happening today in different parts of the world that are likely to become the trends that stick in the future.

Work From Anywhere

There's a reason why I've said anywhere rather than home. The pandemic and its lockdowns created some abnormalities within a trend that was already active. There were already 100s of hours spent working in coffee shops, hotel lobbies, and in transit hubs. However, the pandemic thrust a binary concept upon us where work from home is pitched against work from office.

The reality for many is much more fluid which is why we're seeing multiple locations being used for work in a typical week and even during a single day. This work from anywhere approach is being adopted in different ways by different organizations and throws up challenges for employees, operators, and employers.

Working in a coffee shop was a regularly used option pre-pandemic and you would expect this to accelerate, but the advent of 'camera on' calls has messed with that plan. Likewise, the noise you have in the background of Starbucks isn't suitable for your calls and so a location with great F&B offers suddenly becomes less conducive to a productive day.

Home is such a small word with such a big meaning. Those of us fortunate enough to have dedicated spaces for home working can look ourselves in the mirror and know we're being just as productive as we would be in an office. But we're not all living in that world, shared houses, kids at home, small spaces, limited WIFI, and poor acoustics all contribute to the home being less attractive than it could have been for some, but, you sense it has become an option of sorts to almost everyone. Comfort, familiarity, lowest cost option in most cases.

So the traditional office should surely be making a comeback? Not in many cases. A badly designed office space is still a badly designed office space. The workspace would need to elevate services as simple as WIFI to 3G hand-offs, refreshments, and especially hot and cold beverages to become a place worthy of choice for many.

There are multiple other options beyond the office and home so if nothing else we need to make sure when considering our employee's experience that we consider all of these choices

The Commute as the enthusiasm vacuum

The commute seems to be one of the great misunderstood elements of the 'return to office' conundrum. As someone who has the fortune of working in Manila, I can absolutely understand why no one would want to spend 90 minutes on two buses and a Jeepney to get to an office, no matter how good the facilities are. Likewise, anyone who has tried to drive anywhere in Bengaluru recently would also do anything to avoid it. How about taking the metro in 35 degrees of heat in London - no thanks. This is before any thoughts of the potential to meet COVID-19 in these cramped conditions.

There is no easy short-term answer. Cities have the infrastructure they have for a reason and there was already an acceleration of moves out of the CBD into less central areas to reduce costs and improve the ESG footprints, bit often at the expense of poorer connectivity. This will continue and potentially accelerate as opportunities to vacate larger central spaces are taken, but there needs to be a deeper consideration of the change in the commute that gives the employees.

I remember several years ago a large global investment bank moved across Hong Kong harbor. There was uproar from the employees who had to be placated by improved space and services in their new slightly less prestigious locations. That 'incentive' to move has now become something beyond the comprehension of many in Corporate Real Estate because the work from somewhere else options are so abundant and accessible.

Offshore v3.0

Offshoring work is not new and connecting to remote teams rather than literally shipping work to them is also not a new phenomenon. However, what has come more into focus is the performance benefit of offshore teams when you remove the naturally present barriers from business units who worry about not having their team, in the office with them

The costs of employing Administration, Human Resources, Finance, Marketing and Customer Services teams in Australia, North America, UK and EU continues to soar to unprecedented levels.

At the same time, there is an abundance of highly qualified, hungry, and talented people in countries with a lower cost base. Lets take an example of a simple Finance Administration Role. If we use US$ for a constant currency and consider a basic qualification such as ACA or a degree would be required for the role here is how it stacks up financially

Rates per annum with base salary and statutory employment costs

• UK Greater London 44,000
• USA Chicago area 55,000
• Canada Toronto area 49,000
• Munich Metro area 98,000
• Metro Manila area 24,000

The numbers are compelling. Then consider that the only lost 'face time' is now the 1.75 days that the worker would be in the office and the question starts to become 'Why aren't we doing this?' The economic headwinds that organizations in many of these markets are now facing will only accelerate this further. Growth in H1 for these kinds of services in the Philippines, India, and parts of Africa was +25% compared to 2019.

The Consumer Equation

The biggest thing we need to understand is that we are all consumers in every setting of our life. We consume so much content that our awareness of what is available, and to some extent what we want is at levels we haven't seen before.

As Tim Oldman at Leesman, a global leader in workplace experience measurement, has reminded his audiences. An employee paying US$800 per month for their season ticket to commute into the city can now order a new widescreen monitor, upgraded keyboard, sit/stand desk, and home coffee maker and still see a return on their investment in the home office by the 2nd quarter.

The same type of ROI is being done multiple times daily as the consumer mindset of employees drives them to do what is right for 'me' (and family) before 'we' (the company).

The traditional office is now in direct competition for time with anywhere else the day's work could be completed. To pitch a free donut against being able to drop the kids to school, eat lunch with the wife, go to the gym, etc. is na?ve. Teams looking at workplace experience need to go back to the insights and data that inform these decisions. CBRE, JLL, WeWork et al have been scrambling for hospitality people to manage and operate these services for a number of years but now they're waking up to the fact they need the marketing people to develop products in the first place. Don't be shocked to see a former KFC or big FMCG CMO joining a large real estate organization.

The Demise of Co-Working (as we thought it would happen)

As the pandemic hit we saw a huge amount of investment in co-working spaces. The hype of WeWork and the lessons that gave was largely ignored as a new wave of co-working hit our cities.

At its best, co-working space makes the most of underutilized real estate as a secondary part of an existing area. Companies such as Switch (Asia) and OFIXU (UK) are leading the way toward the Airbnb approach to finding somewhere to work for a few hours or a few weeks and everything in between. As you'd expect Airbnb is doing the same.

So where does this leave WeWork, Industrious and the multitude of local 'vanilla' dedicated workspaces?

Industrious, KMC Savills, Regus Spaces, and similar other operators actually have a decent model. They provide bespoke space to established businesses, flex spaces for those who are growing or flexing, and then use the underutilized elements as areas for individuals to work.

What was anticipated, and in some cases activated, was that these 3rd places could become the simple answer to the challenge of finding employees the best place to work. The reasons are relatively obvious. However, they don't have the 'secret sauce' of a headquarters, the sense of belonging to the business you work for. Equally for the most part they don't have the charm or charisma of a local space that primarily exists for something else. Finally, they don't have the same level of F&B that you'd expect in a hotel or coffee shop. So as transit returns to more normal conditions and the economic pressures on business translate to the personal pressures of being present so the co-working trend will morph back into something more Regus than WeWork.

What does that all mean in summary? Well as I said at the start the answers are so dependent on the business, its macro and micro-location, physical connectivity, and culture that there is no one answer. Things to consider

1. How well does our space stack up, as a product, against the other options for a place to work including connectivity, community, refreshments, and hospitality?
2. What impact does the commute have on people in our city and how can we mitigate the negative elements?
3. What opportunities can we take to build teams in lower-cost environments now that we have proved these tasks and/or roles can be completed remotely at a highly effective level?
4. How to market our space to our people?