The office, as you know it, is dead

A survey conducted by KPMG found that 68% of large company CEOs want to downsize their office spaces on a long-term basis. The remote work model showed that it is possible to rely on digital collaboration tools to get things done and that it is not necessary to have a big office space in a major city. This poses a chance to reduce costs and also deepen the talent pool. Even though some companies like Twitter say that employees can continue working from home, most companies will adopt a hybrid model in the future. The focus for physical office days will be on team meetings, therefore offices have to provide more open spaces and less individual work spots. 

Interesting thought: Can remote work models help to stop gentrification?

This article was originally published on CNN Business on August 25, 2020. Read it in full here: https://edition.cnn.com/2020/08/25/business/office-space-remote-work-pandemic/index.html

The health crisis has forced millions of Americans to abandon their offices in favor of working from home, for better or worse. Now there are signs this may not be a short-term phenomenon, but more of a permanent shift in favor of remote work even after a Covid-19 vaccine is in place.

  • More than two-thirds (68%) of large company CEOs plan to downsize their office space, according to a survey released Tuesday by KPMG.
  • The pandemic is proving employees don’t need to work in cubicles to be successful. And that in turn raises questions about the value of expensive office space, especially in high-priced cities like New York and San Francisco.
  • “This is a longer-term trend. It’s here to stay,” said Knopp, who said everything from human resources and sales to customer service is being digitized. “Companies are focused on reducing real estate footprints.”
  • For companies, embracing remote work can be a way to save money and simultaneously deepen their talent pool.
  • For decades, major companies have spent heavily on prized office buildings in major cities. By shrinking their office footprint, those real estate costs can go down, in some cases dramatically.
  • Yet some real estate executives are confident the pandemic won’t doom office buildings. They note that remote work is no replacement for the intimacy and collaboration offered by in-person working.
  • “It is ludicrous to think that companies will not return to office. Anyone who says they’re not going to be in offices is naïve about how company culture is built,” Brookfield Asset Management (BAM) CEO Bruce Flatt told Reuters last month.
  • While some companies such as Twitter (TWTR) have said employees who want to work from home permanently can, KPMG said most companies will embrace a hybrid model in the future. That means offices will get a makeover to create more space for team meetings and less for individuals to work.
  • “The trend will be towards much less reliance on physical office space to get our work done and more reliance on digital collaboration tools,” said Knopp, the KPMG boss. “Employees will come into physical offices for team meetings and to collaborate, but most days of the week many employees will work remotely.”