Marc Gingras is a Canadian entrepreneur and angel investor. He is CEO of Foko Inc., which has developed Get Working, an application designed to help teams get back into the office safely.
Outdoor sporting-goods retailer REI’s 3.2-hectare, 400,000 square-foot corporate headquarters has everything an employee could ask for and more: open-air offices; a fire pit, a blueberry bog; courtyards and meeting rooms filled with vegetation. Too bad few will ever step foot inside it.
In mid-August, the company announced it was selling its newly built corporate campus in Bellevue, Wash., in favour of multiple offices in the surrounding Seattle area.
Before the pandemic, large-scale office buildings were major draws for businesses. With the health of employees a priority and physical distancing the new norm, what once made massive corporate offices so desirable no longer cuts it.
Major cities look like ghost towns. CEOs expect employees to work remotely for the foreseeable future (if not forever). And office tenants across Canada are looking to downsize, which begs the question: Are large corporate headquarters dead? And, if not, what purpose do they serve and how will they adjust going forward?
One of COVID-19′s silver linings, at least in the corporate world, is that talent is no longer restricted to certain areas or time zones; with the majority of knowledge workers working remotely, employees could theoretically work from anywhere.
But corporate headquarters are more than just places to work – they’re physical embodiments of a company and its culture, and help instill corporate values and aspirations not only with new employees, but also with the communities they occupy.
That’s why, despite going “digital by default,” Shopify and others are using their corporate offices more like “recruitment hubs” to acquire and bring new talent onboard.
Offices may shrink in size, but expect the majority of Canadian companies still to have a presence in our major cities' skylines.
Location, location, location
According to Colin Scarlett, executive vice-president of real estate services giant Colliers International, 40 years ago the average office allocated 325 square feet per employee. These days, it’s closer to 75-80 square feet, as companies have increasingly tried to shore up costs and increase productivity.
Because of COVID-19, that may change.
According to a recent survey by Nanos Research, nearly 80 per cent of Canadian business leaders say flexible work arrangements (working part-time in the office, part-time at home) will be a permanent adjustment for their companies, while 50 per cent plan to change the type of space they currently occupy within the next two years.
With fewer employees venturing downtown for their nine-to-five, companies – such as the aforementioned REI – are exploring the idea of opening numerous office locations dispersed across a particular region to cut down on commutes and keep employees safe.
Teamwork makes the dream work
Despite any short-lived gains in productivity, there are limitations when it comes to working from home – mainly in terms of creativity and innovation.
Adobe CEO Shantanu Narayen recently told CNBC that, while projects already well under way before COVID-19 have continued at similar speeds, kickstarting new projects at the company has been difficult. (This mirrors a sentiment previously shared by Brynn Harrington, vice-president of people growth and operations at Facebook, who said there are few examples of “companies that solved innovation in remote environments.”)
Common workspaces help co-workers form connections and the kinds of creative, serendipitous sparks that can’t be recreated in a digital environment.
As employers across the country rethink what to do with their corporate office spaces, many are doing away with spaces for individual, menial tasks such as sending and responding to e-mail, and are instead devoting space toward collaboration and other kinds of activities that benefit from in-person interaction.
Planning for the present and life postpandemic
Despite some companies struggling with what to do with their corporate headquarters and commercial real estate, others are moving ahead.
Amazon – which backed out of building a second headquarters in New York last year – recently said they plan to hire 3,500 white-collar workers, with some filling space in the Manhattan’s Lord & Taylor building, which the company bought from co-working company WeWork this past March. In Canada, CIBC says they’ve been revisiting floor plans and making changes to their CIBC Square office complex in downtown Toronto to make it ready for employees to return by year’s end, while others are experimenting with staggered shifts and start times.
If 2020 has taught us anything, it’s that nothing is permanent and change is inevitable, but people will always need places to congregate and connect. Whether or not that’s at a large corporate headquarters or smaller location depends on the organization and its needs – ultimately, only time will tell.
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