How Companies Should Reinvest Their Real Estate Budgets Because of COVID-19
Jul 21, 2020
It’s not only how you work today that is changing. Where you work is also shifting. COVID-19 has transformed business. Included in the changes is an increasing conversation about what to do about one of the most significant expenses a company has—real estate costs.
In a recent PriceWaterhouseCoopers (PwC)study, 35% of companies plan to shrink their real estate budgets. I suspect this number will grow as America struggles to lower the positivity rate of infections during these summer months. Will employees even feel safe to return to the office? While a rhetorical question, it is one that executives will need a coordinated plan to demonstrate how safe the office is.
Reducing a company’s investment in real estate is a deliberate effort. Simply closing offices or finding new office space includes many moving parts: lease agreements, applying new accounting practices, for example.
However, forward-thinking companies are already making plans to lower their expenses. The money saved from shrinking real estate budgets presents opportunities. Where does the saving get reallocated?
Where to Reinvest Real Estate Savings
In the PwC study, 49% of respondents said they plan to improve the remote work experience. Also, 44% say they need to accelerate automation and new ways of working. This is precisely where some of the real estate savings should be redirected.
When fewer employees are heading into the office, and some will never return, the hybrid work arrangement will require money to resolve the challenges.
Invest in the Virtual Employee Experience
The employee experience is how employees view their day-to-day experience at work. It’s subjective. However, it’s a powerful influence on performance and employee morale. For a virtual employee experience, technology plays a critical part in keeping employees connected to the company’s mission and implementing critical projects that support strategic endeavors.
Companies would be wise to invest in technology that improves the timing of information. Even more compelling is the use of technology that helps employees work better together virtually. This doesn’t mean rolling out Zoom or Microsoft Teams, commonly used for meetings. Teams need to experience a virtual version of working side-by-side. Bluescape is a powerful example of this need.
Humans need to feel connected. We want work to be meaningful. Shape the virtual employee experience by using technology that closely mimics being next to one another.
Invest in Employee Wellbeing
In our study on working from home realities, 38% said they feel lonely. Interestingly enough, 38% are happier working remotely. Yet, we are in a period of adaptation. Employees and management are struggling with not seeing people in the office. 57% of employees feel isolated. Meanwhile, 41% of management struggle with social isolation. A significant influence on employees’ wellbeing is the inability to establish boundaries between their work and personal lives.
This is a pending problem that will get bigger if companies don’t act now.
Companies can use the redirected real estate dollars and build world-class education programs that teach employees how to manage stress, anxiety, and caring for others in these times. Leaders can learn how to adapt their leadership in these times.
In addition to the education programs, HR can have benefit providers teach employees how to use available programs covered by insurance.
Invest in Safety Measures for In-Office Employees
Some employees are returning to the office. Paramount in their minds is safety. Companies can help reduce their communities’ positivity rate by implementing a robust safety program that protects employees and helps local economies.
Key areas to include in safety programs include the following:
Contact tracing protocols
Reconfigure the physical workspace to protect employees and promote distancing
Regularly update safety measures and make no exceptions in their implementation
Require mandatory testing for in-office employees
How long we’ll need to adapt to COVID’s terror is unknown. Conservatively speaking, companies will need to adjust their practices through 2021. That means actions now are key to maintaining progress on essential business efforts. It also means focusing on the workforce needs to help them stay healthy.
As companies look at their budgets and where to cut, real estate expenses are logical. That money needs to be reinvested in areas that sustain the company’s longevity. Investments that help the workforce contribute and remain healthy are equally as important.