Some companies could kill the office for good
TORONTO Thousands of employees who have been working from home since mid-march are now facing a new possibility: They may never see the inside of their companies’ offices again.
Opentext, the Waterloo, Ont.based software company, was among the first to look at the home-office situation. It announced in April it was closing 50 per cent of its office locations worldwide, leaving 20 per cent of its workforce without a fixed office.
CEO Mark Barrenechea said the shift wasn’t primarily about saving money, but about taking a fresh look at how his organization is shaped. “From a cost perspective, it’s probably neutral, getting to maybe a slight benefit,” Barrenechea said, noting that any benefit would be reinvested in the workforce. “It also is going to allow us to go after talent that we weren’t able to go after before, because our talent has always been tied to a physical space.”
Opentext made its decision earlier than most, but experts in the world of commercial real estate say that companies all across North America are rethinking their real estate footprints, and the longterm effects could transform the way we live.
Ray Wong, vice-president of data operations at Altus Group, a commercial real estate services company, said that there are a lot of different effects on commercial real estate as a result of the pandemic.
For example, companies will need less space, because more people will be working from home. But at the same time, they will need more space to accommodate physical distancing requirements until a COVID-19 vaccine is developed.
Wong said that there’s so much uncertainty around the future of the virus, leaders are expecting that they will need to plan for flexibility, as they enact temporary distancing measures to reduce the risk posed by the virus.
“Nobody, I think, is ruling anything out, with the exception perhaps of Opentext,” Wong said. “I think there are a lot of other companies that are still trying to figure this out, what their needs are, and what their employees’ needs are ...”
Wong said it’s still too early to make any firm declarations about how the pandemic will shape the physical footprint of companies over the long term.
Companies’ office space decisions will turn on how well governments are able to do testing and contact tracing to slow the spread of the disease, and how long it takes before a vaccine is available.
The pandemic hit at a moment when office density was already at an all-time high. “Everyone is trying to reduce their footprint, so the average square feet per employee has been dropping for the last 15 or 20 years,” Wong said.
The drive for greater flexibility and density was what led to the rise of co-working spaces such as Wework, where companies could rent individual desks or small spaces in communal office environments. That trend has led to a flood of calls recently for Breather, a company based in Montreal and New York that provides flexible, private office space. “We’re getting a lot of phone calls from companies that are looking to leave co-working for private spaces, but on flexible terms,” Breather chief executive Bryan Murphy said. “No one wants to sign a direct lease right now, because of the uncertainty.”
Murphy echoed Wong’s comments about density, saying that he expects companies will need to put more space between workers. But Murphy said he also expects that some companies will be able to make video conferencing and other collaboration tools work, so they aren’t as tightly tied to the downtown core of a city.
“I think that the change in the technology platforms in the last four to five years has been very significant in terms of creating enabling technologies,” Murphy said. “What’s been missing is sort of senior-executive buy in.”