The Work from Home Movement and the Road Ahead
The Work From Home Movement and the Road Ahead
In 2020, we learned some things. If I may:
- We are far more resilient than we give ourselves credit for
- Something about toilet paper can make people do strange things psychologically
- There is a disconnect between the pay for this county’s essential workers compared to their economic importance
- And for a great many of us, we have learned all productivity was not lost when work moved from offices to our sofas, kitchen tables, and spare bedrooms
And for those of us who have been conducting business from our homes, it’s been an interesting ride. As evidenced by my own reluctance to replace my failing plastic IKEA desk chair, on some level I am not ready to commit to the work from home experiment long term. There are simply aspects of working together in the physical realm that will always reign supreme: working in-person collaboratively with your team, training and conveying the culture of an organization to new team members, and walking down the hall to ask a question instead of sending another email or joining a virtual meeting. At the same time, there are undeniable benefits of working at home including improved work life balance, no commute (unless you count walking from your bedroom to the kitchen table), and (for employers) the reduced overhead of not carrying the cost of a lease payment for office space.
Throughout 2020 and 2021, SDG has observed what COVID has meant for the greater office segment up close. In many markets, vacancy (including for sublease) is at an all-time high. A recent Wall Street Journal article cites the unloading of large blocks of office space by major employers as a significant contributing factor in the softening of the segment. This increased supply we’re seeing in the sublease market may have the potential to dampen the pace of new office construction if developers are not incentivized to invest capital in new projects.
Yet… as the supply of available office space is rising, the April 2nd employment report from the Department of Labor estimates that although the national unemployment rate and total unemployed persons remains high (6.0% and 9.7 million), they are well below what we saw at the peak of the economy’s slide in April of 2020 (14.7%, 23.1 million). As the pandemic eases and jobs continue to rebound, increased absorption of commercial office space will clearly follow behind on some level; bringing with it the risk that investment in new projects will lag behind job growth and demand for quality office space. The question remains on how the work from home movement will evolve as the pandemic eases and restrictive social distancing measures are lifted.
It has been a wild ride for the economy and the larger office segment; we are not out of the woods yet. With a bit of luck, my plastic desk chair will hold together a little longer.
Strategic Development Group, Inc. (SDG) is a professional site location firm that provides solutions to its corporate clients related to their site selection decisions. Leveraging a professional team with decades of experience across the US in locating domestic and foreign projects resulting in billions of dollars in capital investment, SDG is nationally recognized for innovation, competency, integrity and results. For even more insights on corporate site selection and trends in economic development, please check out our INSIGHTS and NEWS pages.