The Dawn of the Hybrid Workplace

“For the first time in history, it might be possible to locate on a mountain top and to maintain intimate, real-time, and realistic contact with business or other associates” U.S. professor Melvin Webber, 1973

Almost since its birth, the death of the office has been predicted. Fax machines, the internet, collaborative technology platforms were each meant to be end of the road for workplaces. With large segments of the workforce working remotely through the pandemic, has COVID-19 finally dealt the coup the grâce to the office? Well, not quite.

Pre-Pandemic

IBM, JetBlue, American Express, Aetna Insurance, all experimented with remote work. Each of these companies saved millions of dollars annually by cutting office space and allowing employees to work remotely. In 2009, an IBM report stated that 40 percent of IBM’s employees had no office at all. Through these measures, IBM reduced space needs by a massive 58 million square feet, saving $2 billion. 

And then life came full-circle. IBM, Yahoo, and other companies wanted thousands of their workers back in physical offices again. 

But this did not stop the move towards remote work. In fact, according to Gallup, 43 percent of U.S. employees work remotely all or some of the time. According to another study, remote employees work 1.4 more days per month than their office-based counterparts, adding more than three additional weeks of work per year. 

Hence the question remained: if people can be productive working from home, why do we need the office? While the debate raged on, the office remained resilient. 

And then in early 2020, we were hit by the pandemic. Many organizations moved to remote-working models almost overnight. The great remote work experiment began.

In Pandemic

The levels of remote work skyrocketed through the pandemic, and McKinsey & Co. suggest that the levels of remote work will likely remain higher than pre-crisis levels. In fact, some companies are seeing this becoming a permanent trend. 

Arguably, nowhere is more poised to embrace this future than Silicon Valley. Technology companies invented the tools for remote work including file sharing, video-conferencing platforms, and digital collaboration. 

So the slew of announcements over the last few weeks is not surprising. Twitter said its offices won’t open before September, with very few exceptions. Google, Microsoft, Slack, Box and others followed suit. Meanwhile, Facebook said it will transition tens of thousands of jobs out of the office over the next decade. OpenText said it will not re-open half of its offices after the pandemic. Further, Shopify said it will allow employees to continue working remotely after its offices reopen in 2021 and believe office-centricity is reaching its end. 

To be sure, it is not just the technology companies, several banks and insurance companies have also suggested greater impetus towards remote work. As examples, Morgan Stanley sees itself requiring lesser real estate in the future, Mastercard will not ask staff to return to its worldwide corporate offices until a vaccine is available, and Barclays added that the notion of putting thousands of people in the building may be a thing of the past.

So, has the pandemic dealt a lasting blow to the physical office? Is the future of work: remote work?

Post Pandemic

But wait, why this sudden rush towards large-scale remote work? Is it simply cost savings, is it productivity or is it flexibility? Is it all of those? Or is it resilience? 

The greatest challenge the pandemic posed for businesses is: resilience. Put differently, unprecedented as this was, most workplace continuity programs were not equipped to counter the pandemic. So what led us here?

Traditional real estate thinking has been all about the ‘workplace as a box’. But, there is rigidity with this approach, and the pandemic exposed this fragility in the workplace ecosystem. Naturally companies want to avoid these points of failure as they move forwards. They seek efficiency and flexibility tied with resilience. And, viewed holistically, these are not conflicting objectives.

Thinking forward, just as companies access cloud technology on-demand anywhere, trends suggest that work and the workplace could become on-demand anywhere. In the future, could real estate become part of a cloud-like ecosystem? This may mean individual, heads down work and some forms of collaborative work, could be driven remotely. The virtual workplace could become the go-to for this type of work.

But all this impacts us, the people. Long-term remote work has implications on the individual. We are social animals — social interaction provided by the office can be key to well-being, creativity, mentoring, coaching, and culture creation. Some of this if not impossible, is difficult to achieve with a large distributed workforce. Is this where the value of the physical space lies?

A New Dawn

Buildings have always been symbols: physical representations of the intangible. Will workplaces be challenged to fuel in-person connection, collaboration, and innovation? Will they become exemplars that convey brand, culture, and values? Will they be vehicles of the organizational consciousness designed to provide social connection?

What is clear is that the pandemic has uncovered the need for a new definition of the workplace. A resilient workplace that is typified by a connected eco-system of the remote, the virtual, the digital, the physical, and the social.

Do we need to choose between the virtual workplace and physical workspace? Certainly not, the choice does not have to be binary. Instead, could a solution that combines best of both be what we finally settle on — a hybrid of the virtual and the physical? Could this be the dawn of the hybrid workplace?

So, will the office as we know it disappear? Probably not. Should everyone work remotely? Likely no. Will friction-less technology accelerate a “work from anywhere” culture? Likely yes. Will we as social animals crave connection with our colleagues? Undoubtedly. And therefore, enterprises that are able to balance the virtual with the social, the digital with the physical, will be differentiated from the rest — poised to succeed in the next normal.

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About the author: After having worked with Fortune 500 companies, real estate developers and the public sector across the Americas and emerging markets in Asia Pacific, Ram Srinivasan is currently Managing Director with JLL’s Consulting practice and was previously a Vice President with Deloitte Canada’s Real Estate and Infrastructure Advisory Practice.

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