Moving the work to the worker: Is the role of the office changing?

It’s not just the tech majors, after all.

I came across a recent article by the Times of India: “CavinKare will shut HQ, to rent out office space” - the consumer goods maker has migrated its entire corporate office to a work from home platform.

“We have shut down our corporate office and closed all four branches. We see no need for it,” the company founder was quoted saying.

This sentence stuck with me. When I moved from Delhi to Bangalore back in 2017, I took a transfer to the local office of the newspaper I was writing for. For the next year and a half, I continued to work from the office and from home, even as my entire team was based out of Delhi and Mumbai. Not having daily face-to-face interactions with my colleagues was tough and undesirable. But did my productivity take a hit? I’d say no.

Will the role of the office or our attitude towards it change for good as a result of this pandemic? Signs are already visible.

Companies like CavinKare could compel others in the space to explore the option. Several small and mid-sized companies are giving up real estate – not just because it makes for good economics, but also better business sense. And this is not just in India. Moody’s predicts a drop in office space demand across most of Europe, causing a decline in rent, a report by The Guardian said.

But while on one hand the pandemic has forced people to work from home, social distance imperatives will also mean requirement of more space per person at the workplace once offices resume.

What long-term changes can be anticipated? Read on to find out more about this in my interview with Ramesh Nair, CEO & country head of real estate services firm JLL:

Q] Are companies vacating rental spaces, or renegotiating their commercial leases as they look to conserve cash?

A] At least 20% of corporates have put their expansion plans on hold post the start of Covid-19. Today, there are companies looking at selling their surplus assets, companies who are looking at a sale and leaseback and early renewals so that they can blend and extend their leases going forward.

We'll see companies wanting to reduce their size, expenses, rentals and deposits. So over a period of time, there would be relocations, consolidations, de-consolidations happening. And we'll see this play out in the next few months. It's a catch-22 situation, because economically companies will find it tough. On the other side, you also need to worry about (and invest in) employee safety.

Q] IT and IT services space are one of the biggest net absorbers of office properties. Many companies in this space are talking about how the work from home model works for a section of the workforce. How do you see the demand changing in this sector?

A] I don't think there'll be a significant cutting down of office space due to work from home. I believe not more than 14-15% of the entire workforce will work from home once things get back to normalcy. Over the last 10 years, occupiers looked at densifying their portfolio - they reduced space per person by around 20%. But going forward, I think they're going to be increasing that. So whatever space is getting lost because of work from home, will get compensated by de-densification.

A month back, we were having lot more discussions around de-densification. But very few employees have actually come back. In most cities, this number varies between 5-20%. So given that the balance 80% of the office is currently looking empty, companies are going slow on the de-densification part. But we also need to remember that a lot of money has gone into existing fit-outs. You can't suddenly throw those workstations out and redesign the full thing. Companies will do it over a period of time.

Q] Will companies move parts of their businesses to less expensive locations, from prime locations?

A] This definitely will happen. I spoke about de-densification. We also believe there'll be a new concept called de-consolidation. Companies who have enlarged facilities in one place may want to break it up into two or three, in different parts of the cities. We're going to see different types of offices emerge - front office, back office and middle office, which will have three different strategies. One having a regular office strategy, second, a work from home strategy and third a flex strategy, which is working in a flexible space like co-working.

Q] Will this also push demand for flexible/ temporary employees?

A] I think this is the opportunity for the liquid workforce to become successful. Look at all the people who gave up their careers when they had a child, or when they had to take care of older parents, or because they were working in a tier II city, or retired people who didn't want to go back to work. I think this is that opportunity for all of them to get back to the workforce.

Watch the complete interview here:

Will the role of the office space change any time soon? Share your thoughts in the comments below.