However, for many companies, the degree to which they matter has changed after a year of working remotely. These two reasons for having offices - supervision and informal interaction - have always been apparent.
Therefore, managers need to think carefully about what role informal interaction plays in their team and how work from home will affect it. However, if informal meetings are an important part of the company culture, remote work can undermine it. The desire for unstructured exchanges should not hold anyone back from leaving their office if their primary concern is productivity. While research shows that unstructured interactions help people exchange information and build networks, no studies show that this increases productivity of their company. Although this is a well-established notion, there is very little evidence to support the claim that watercooler talk encourages creativity. The second reason for companies to have offices is to support unstructured exchanges of ideas. If a business (or even certain managers within a company) rely on proximity and actual observation to determine who’s working hard, it will be more challenging to move its core activities out of an office. While electronic methods of monitoring work were popular even before the pandemic, skilled work is difficult to monitor in this way. This claim is supported by a lot of reliable evidence, especially for salaried employees (programmers, accountants etc.), whose effort is difficult to measure. Why Have an Office?Įconomists argue that firms prefer to have their employees work in the same place at the same time for two reasons.įirst, it makes it easier to monitor workers. That’s true even though New York-based firms such as JPMorgan Chase and Goldman Sachs have been some of the most outspoken about getting workers to return to offices quickly. In New York City, for example, office vacancy rates have risen 11.3% in the last year, and now stand at the highest level in 27 years.
It read in part: “The last year has felt like we have truly been able to do the best work of our lives for the first time, unconstrained by the challenges that daily commutes to offices and in-person co-located offices themselves inevitably compose.”įor companies that opt to require fewer employees to be on-site each day, one question looms: Should managers make the long-term decision to jettison a portion of their office space?īased on our decades of professional experience - one of us is a London-based professor of finance and urban planning, the other is an investment manager who focuses on real estate - we believe that for many companies, the answer should be yes.
When Apple CEO Tim Cook announced plans for employees to return to the office three days per week beginning in the fall, employees sent him a petition saying the company had “actively ignored” many employees’ desire to continue with a full-time remote regimen. Even as vaccination rates grow, companies remain uncertain about when, how - and in some cases, if - workers will return to their pre-Covid office routines.ĭata from Google shows that workplace activity in London, New York, and San Francisco is running at half what it was before the pandemic.Ī June survey by the London Chamber of Commerce of 520 business leaders revealed that among companies whose employees can work from home, half expect workers to remain remote five days per week even post-Covid.