Leaders across industries have gotten creative — sometimes forceful — in their initiatives to encourage their employees to return to the office. As work/life balance, productivity, and employee engagement have been at the forefront of labor conversations for executives, the approach to revamp the ways, times, and places work is done has become part of the growth process for many companies who are looking to expand post-pandemic.
With many offices only being used occasionally, or host only a fraction of employees compared to potential office capacity, CFOs must answer the question: Are large investments in office spaces worth it anymore?
Although the relationship between company culture increasing productivity is frequently called into question, the benefits of collaborating in person for finance teams may still offer perks. Many companies are reorganizing the way their finance and accounting work is allocated and completed due to both a labor shortage and emergence of technology. But in-person collaboration may serve best from a functionalist perspective, especially in times of deadline or in crunch time.
Company Morale, Productivity, and Teamwork
Some business leaders, all in on office spaces and in-person collaboration, believe this environment and sound company culture is essential to success. Joe Camberato, CEO of the small business lender National Business Capital, is nearly a year into operations at his company’s new headquarters on Long Island, New York. The winner of Long Island’s best place to work, three times in the last five years, Camberato gives credit to his people’s ability to collaborate in a motivating, modern, and efficient in-person environment.
“Having our team together allows us to achieve the level of efficiency that we’ve become accustomed to,” said Camberato. “Our collaboration areas are full of different teams working on projects, while our main office area is active and bustling with business finance advisors reaching creative solutions to unique problems.
“We chose this specific location because it’s right in the heart of the second-largest industrial park in the United States behind Silicon Valley, the Hauppauge Innovation Park,” he said. “Our new state-of-the-art workspace comes equipped with an innovative training facility, a full-service cafeteria, and, most importantly, room to grow toward our full potential.”
Life gets crazy … Having a place where your team can come to work and escape what’s going on in the world is a benefit that I don’t think gets talked about enough. — Joe Camberato, National Business Capital
Camberato’s efforts and investments in culture and employee morale haven’t gone unnoticed. Apart from his team’s regularly catered lunches, celebrations highlighting success, and offsite morale-boosting activities like suites at New York Islanders games, Camberato believes an office space where everyone can collaborate five days a week is from where all of the benefits of positive culture stem.
“Life gets crazy,” he said. “Having a place where your team can come to work and escape what’s going on in the world is a benefit that I don’t think gets talked about enough. Add in a family atmosphere where everyone has your back, and it only becomes that much more powerful, personally and professionally.”
Commercial Real Estate Is Still Viable
Real estate prices and availability are largely determined by economic conditions and location based-trends. The cost, availability, and terms for office spaces are changing, and according to Rena Kliot, broker and founder of Pulse International Realty, the future of office space, especially in cities, is still to be determined.
“The future of office buildings remains up in the air,” said Kliot. “It is, however, important to note that none of the regions across the U.S. have seen vacancy rates dip below their pre-pandemic Q4 2019 levels, according to Moody’s.”
“What I find interesting is the modification of format — optimized floor plans for collaboration, outdoor space, and onsite services such as catering or even child care, these implemented amenities will certainly draw employees back into the office post-pandemic,” she said. “It’s a readjustment as they were able to work from home and have all creature comforts at hand.”
Kliot believes that in-office work is changing, but not done for good. Just like how employers adjusted from a full-time office commitment to pandemic-induced work restrictions, the way employees work in the future will need to be adjusted as well, just in the opposite direction. According to the real estate expert, technology and work environments from the pandemic haven’t succeeded in eliminating the need for in-person collaboration.
The modification of format — optimized floor plans for collaboration, outdoor space, and onsite services such as catering or even child care, these implemented amenities will certainly draw employees back into the office. — Rena Kliot, Pulse International Realty
“I don’t believe that the office is dead, we are continuing to adjust,” Kliot said. “Offices will and do already look different with features such as Zoom rooms and desk sign-up sheets, flexible spaces, integrated tools, and automated systems. These features help create a thriving hybrid workplace. Employees feel heard and empowered, and workplace managers have the tools and data they need now to continue improving the workplace experience.”
Renew, Downsize, or Abandon Office Spaces?
While the needs for the level and frequency of in-person collaboration rely heavily on the industry and company at hand, there is no monumental trend or figure that says CFOs should make a decision on the future of their office space, one way or the other. What makes great leaders is their ability to assess their team’s values, desires, and weak points, and create an environment where efficiency and improvement can flourish. With this in mind, CFOs will have to figure out what works best for their company’s teams, goals, and plans for the future.
“It’s likely that 2023 will see a slight expansion of employees working remotely,” Kliot said. “[My] findings suggest that most companies are finding their hybrid workplace policy to be a successful solution for their organization. That being said, most offices will likely need to downsize and recreate the workspace to a more flexible space, therefore, reducing expenses while adjusting to a hybrid model.”
According to those who are in the business of providing guidance, CFOs should view an office conundrum as an enormous opportunity to showcase some ambition to their peers. As leadership decides on new physical spaces that can help shape their brand’s image among employees, competitors, investors, and clients, a move here may be much more impactful than just a new place to commute to.
“There are windows in business that give CFOs freedom to be more ambitious than they might otherwise be, [and] this is one of those windows,” said William Lovis III, managing director at Alvarez and Marsal.
Research is beginning to show that employees can be considerably more productive in a remote environment, but that productivity is ‘lumpy.’ — William Lovis III, Alvarez and Marsal
“Windows open, and windows also close,” he continued. “Now is the right time for CFOs to look holistically at company productivity, including real estate, but with a goal of improving overall customer/client profitability. It is likely most companies are turning a blind eye to clients, geographies, and products and services that CFOs need to manage [in order] to ensure that shareholder returns are optimized in this dynamic environment.
According to Lovis III, the types of productivity found in a remote environment may be on par from an output perspective, but more strenuous for an employee to create that output versus if they were in the office. “In a hybrid environment leaders need to become comfortable decoupling ‘hours in the seat’ from the output that results,” he said.
“Research is beginning to show that employees can be considerably more productive in a remote environment, but that productivity is “lumpy,” meaning that they might have a power hour or two and then need a mental break,” Lovis III said.
“This is how our bodies and brains tend to work, and if leaders are comfortable with this dynamic, the company could experience higher overall productivity and satisfaction from their employee base with remote or hybrid work,” he said.