“Despite the public debate over return-to-office mandates at major companies, experts say office occupancy will never return to the levels experienced before 2020. In February, workplace data company Kastle Systems estimated that half of workers in the United States had returned, but that figure has stagnated since.” Washington Post
Return to office policies are starting to create workplace tensions around the nation between employers and employees. Additionally, financial pressures are on the rise due to offices sitting empty. The emergence of technology and virtual tools has accelerated remote access for workplaces around the world. But, that doesn’t pay the rent for those holding leases in expensive city centers like New York and San Francisco. The already volatile nature of supply chain disciplines has also felt the pinch of increasing costs for remote and virtual workplace tensions with an increase in those seeking hybrid and flexible working arrangements from their employers. Because the supply chain talent pool is typically more nuanced than other fields, employees able to work remotely are being more firm in their compensation requirements to include these arrangements.
In this article, we’ll explore the cost/benefit ratio for employers and how they’re trying to get people back into the office – and who’s required to return to the office. We’ll also examine ways in which the supply chain functions and industries have adapted to compensate for shallow talent pools accelerated by the exodus of the boomer generation.
Pandemic Game Changer Impacting Return to Office
When the world shut down, every citizen was impacted. From the boardroom to the mailroom, workers felt the effects of a Pandemic. This not only created a different reality in the workplace, but it shifted priorities for workers at every level. Virtual tools matured that allowed for entire teams to function remotely without gathering in person. The norm changed almost overnight. As the old saying goes, you can’t put this genie back into the bottle. With the availability and efficiency of tools for virtual work, more and more people took advantage of them.
As the Pandemic eased, employers began to reassess how they were going to handle the new normal. High value employees knew their leverage. Workers in niche fields like supply chain, already bereft of enough talent to fill required roles, also began to insist on flexible workplace arrangements in compensation packages. Executives who once were the only people to enjoy coming and going from the office as they pleased began to see this desire permeate the ranks.
Work life balance became more of a priority. Why? Because for the first time in more than a century, every worker in America confronted the mortal dangers of the workplace. Why risk your health and wellness for someone else’s profit margin, especially when the work can be done just as well, if not better in some cases, remotely.
After 2 years of trying to balance return to office or allow permanent remote work, employers are now seeing the costs catch up to them.
Office occupancy has likely plateaued at 50% and could possibly be expected to peak out at 55%. However, the incurred costs of office leases and empty spaces have yet to peak.
Employer views: Cost and Camaraderie
Naturally, employers want their charges back in the office. They’re paying for the space and the inclination to monitor work and productivity levels in person is easier. This mode of thinking seems to be more and more archaic by the month. Everything changed in 2020. Technology rapidly advanced to accommodate an interrupted world. These changes became the norm. Workers began to realize their inherent value and saw no reason for employers to force in person, full time, office presence when the tools were available to provide flexible workplace arrangements.
So long as productivity remains high, what’s the issue?
One of the biggest reasons employers lobby for a return to office is simple: cost.
A recent Washington Post article titled “Workers want to stay remote prompting an office real estate crisis” discusses the pending economic impacts of remote work becoming the norm.
The economic impacts cannot be denied, especially in large city centers reliant upon office space occupancy for rents and human traffic for commerce. Entire office buildings sit empty in cities like New York and San Francisco and this issue exists in degrees in most top 30 cities. This sudden upheaval has rippling effects as retailers surrounding these once vibrant business centers also have begun to shutter their doors.
Banks are taking on more debt and risk as employers work to restructure conditions of their leases and loans. This economic volatility contributes to employers wanting their charges in the office, in addition to the perceived camaraderie inherent with in-person work environments. However, many employees would prefer not to spend time commuting and upset a delicate work life balance because their employer has an expensive lease.
Some employers are more inclined to curate a hybrid and flexible workplace environment. Some employers are less able to accommodate hybrid arrangements due to the nature of the industry in which they work. There’s a case by case issue for this and it’s being played out in real time.
Some supply chain positions don’t have the option of remote or hybrid workplaces. Being onsite is paramount to the success of the objective. Production, manufacturing, operations, and even planning to an extent require a lot of hands-on capacity. White technology has helped to automate and digitize a lot of this work allowing for more people to be remote than in years prior, some just cannot be done virtually.