In a non-COVID world, working remotely from the office was relatively unheard of, however the year 2020 saw tens of millions of people working from home full-time as it not only became a necessity to protect people from being exposed and/or spreading COVID-19, but was due to national lockdowns, self-imposed isolations and quarantines. The adjustment became a novelty at first as working professionals had to designate working spaces and/or dual-purpose their dining room table, all while finding the balance between work and home life.

Now that more than 4.5 billion vaccine doses have been administrated worldwide, lockdown restrictions have eased and life as we once knew it, is resuming as working professionals are returning to the workplace. However, after over 18 months of working from home full-time to a combination of rotating work schedules, a hybrid working trend has, and is, becoming a focal point for many companies and individuals.

These observations and others that arose during 2020 and to date have made companies re-evaluate their business models and operations. The question is: do they revert back to the traditional office like it was pre-2020? Or do they operate a hybrid model? While most people feel that COVID-19 is set to have a permanent impact on the real estate industry and the office market, exactly what the impact is, is yet to be seen. This month’s Industry Insights, in collaboration with Broll Occupier Services, an affiliate of Cushman and Wakefield, will explore how organisations worldwide have or will adapt to the workplace and embrace the new culture of remote working and traditional in-office operations.

According to the Google Mobility Report, the average South African’s movements1 to their workplace had declined by 41% while there was a 27% increase for residential movements when compared to the baseline2, which indicates that there is still a large percentage of people still working remotely and not necessarily from home.

The report further provides details on people’s movements per province, where KwaZulu-Natal’s mobility between places particularly, indicates that majority of people remain working remotely and/or those that remain at home due to job loss are a result of the pandemic’s snowball effect, as the 30.5% (Q1 2021) unemployment rate for the province increased by 3.6% year-on-year (y-o-y).

Despite the increasing unemployment rate, there are a large number of companies locally and internationally that have not been able to have their entire workforce back at their offices which could be due to the size of the workforce and the large scale of compliance and co-ordination that is required to have employees in a safe working environment.

It has been reported that some corporates will only allow employees to return to the workplace once they have been vaccinated, which is another in-depth discussion, however the rollout of the vaccine is a key driver to enable these larger companies to resume business and more importantly access what level of hybrid working is most appropriate for their particular organisation.

According to a Hubstaff survey, 58.25% of companies plan to combine in-office and remote work in the future of which only 15.5% intend to operate a full-time in-office model. In a post-pandemic world, a hybrid virtual model allows for some employees to work on-site while others work remotely has shown added benefits, such as but not limited to:

  • Increased productivity for individuals,
  • Lower costs,
  • Greater access to talent
  • More individual flexibility,
  • Less commute stress,
  • Money savings; and/or
  • Positive environmental impact.
  1. Percentage figure as of the 27th of July 2021
  2. Meridian value recorded between 3 January and 6 February 2020.

From an employee perspective, having been working from home, they have become accustom to this routine and working environment that they too are demanding the freedom and/or flexibility to work from home or anywhere they choose.

There is no doubt that the traditional office space and environment provides a unique function, a sense of belonging, nurturing company culture and strengthens company values. Which is why pre-COVID many corporates had gone through consolidating their multiple sub-offices into one large glazed building in main CBDs, to not only save costs but to have a head office and staff governed by this monument. The pandemic has now made corporates realise that they might need to decentralise their head office by creating  smaller and perhaps temporary nodal office hubs as this caters for employees to work closer to home, team meetings and training sessions, while head office remains the central hub for invention, innovation, and physical collaboration.

In addition, the pandemic has forced many companies to end their lease agreements prematurely and/or negotiate for more favourable lease terms, nonetheless the pandemic has resulted in the highest vacancy rates in history. However, on the upside, the resultant influx of stock and driving down of rentals, has meant that the office sector has become more attractive and accessible to smaller businesses, whom previously may not have been able to afford it.

Serviced offices have remained stable and in some cases have become more attractive for corporates seeking favourable rental conditions which act as temporary satellite offices, especially for employees and team meetings that require the infrastructure that physical premises have to offer. Furthermore, new office developments may only pick up once demand for office space resumes. While mixed-use developments may need to reconsider the ratio of office and residential space, they may also need to add and/or increase working space within residential property.

In Conclusion:

As many in the workforce have become accustom to being able to work anywhere and maintain similar levels of productivity, these remote workers become digital nomads, however they can lose touch with their company culture. It is imperative that there is a balance between the virtual workplace and on-site office environment. The office space is no longer the facility that holds employees when at work, the place of work has changed to a service.

The workplace is a holistic solution with integrated technology, furniture, infrastructure facilities to provide a productive place of work. It is recommended that the place of work should be equal to the comforts of home working whilst providing a holistic place of physical safety and collaboration. Vaccinated or not, the onus is for corporates to provide a safe and compliant office environment for all when they eventually return to the office, whether it be in a hybrid model or full-time traditional model.

It has been witnessed and predicted that the Occupier market will tend toward a hybridized working model, neither defined by work-from-the-office, nor work-from-home; but rather work from where is most appropriate. Across the broad landscape of occupier business types, each have a different and distinct need for working space.

Some have found their teams to be more functional in flexible spaces (or home!), whilst others have specific security or confidentially requirements, and opt for more secluded spaces that are not their traditional offices. Larger occupiers, employ a cross section of the market and require multiple options of non-traditional office spaces.