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White-collar workers are getting used to recognizing the signs that remote work is dying\u2014and lately, it\u2019s coming in the form of CEO memos demanding a return to the office.<\/p>\n
Major businesses from beauty retailer L\u2019Oreal to banks like Deutsche and Goldman Sachs are beginning to reign in years of pandemic-era workplace flexibility, and based on the rhetoric, they appear to mean business this time.<\/p>\n
But hidden within those ominous memos is a big secret, and the clue to unraveling it comes from a quick look at many companies\u2019 post-pandemic office footprints.<\/p>\n
The secret is many companies simply no longer have the space they need to fit the number of workers they say <\/em>they want back at the office<\/p>\n Businesses are probably being overly ambitious with their RTO orders with the expectation that the targets will never be met by staff, according to Sue Aspey Price, EMEA CEO for real estate services group Jones Lang LaSalle (JLL).<\/p>\n \u201cOur experience is that companies, frankly, will say a day longer than what they expect because they just know about human behaviors and patterns, and travel and sick days and holidays,\u201d Aspey Price told Fortune<\/em>.<\/p>\n \u201cSo when we see a company say four days a week back in the office, usually they\u2019re expecting around three, so that means they\u2019re now going to be planning their portfolio, their footprint, and the type of space they need around that three day a week model.\u201d<\/p>\n JLL manages thousands of clients\u2019 real estate affairs. In the past few years, Aspey Price says trends of both downsizing and shifts to more sustainable office spaces have changed the workplace dynamic.<\/p>\n That story matches up with the data. A survey published last June by Knight Frank found half of the world\u2019s biggest firms were planning to cut their office space<\/a> by 10-20%. In 2024, Moody\u2019s expects a \u201cmuted\u201d<\/a> corporate real estate market.\u00a0<\/p>\n More recently, companies in major hubs like London, New York, and Singapore are buying up new office space because they have realized they cut back too far.\u00a0<\/p>\n For now, that realization means many return-to-office orders don\u2019t stack up.<\/p>\n \u201cIf everybody followed the policies that are being put out there, a lot of companies don\u2019t have anywhere near enough space,\u201d Aspey Price says.<\/p>\n \u201cIf every working team came in on those days, the chances of them having enough space are almost non-existent.\u201d<\/p>\n It might explain why statements and actions of intent aren\u2019t often matched by increased signs of attendance.<\/p>\n Accountancy group EY began tracking their staffers\u2019 keycards to work out how often they were coming back to the office. The group found around half of its staff weren\u2019t even making it in the required two days a week<\/a>.\u00a0\u00a0<\/p>\n The power dial around where staffers spend their working hours is gradually shifting back in favor of employers.\u00a0<\/p>\n L\u2019Oreal ordered its workers<\/a> back into the office on Fridays not long after the beauty brand\u2019s CEO Nicolas Hieronimus claimed<\/a> remote workers have \u201cabsolutely no attachment, no passion, no creativity.\u201d<\/p>\n Last week German banking giant Deutsche ordered its managers back into the office<\/a> four days a week and the rest of its employees back three days a week, with the added twist of banning workers from working both Friday and Monday from home.\u00a0<\/p>\n Deutsche\u2019s move was particularly interesting for two reasons. Firstly, the company had regularly openly praised the productivity benefits of remote working among its staff.<\/p>\n The bank had publicized that 87% of its workers felt productive<\/a> under the hybrid model, which saw employees spending between 40% and 60% of their time, or two to three days per week, in the office. The group continues to press upon the positive impact of remote work on productivity.\u00a0<\/p>\n Secondly, the move came even after the bank said it was planning to cut capacity at its key Frankfurt location by 40%, begging the question, where does Deutsche expect to house all of its returning workers?\u00a0\u00a0<\/p>\n The second point is the most important one and explains the bind anxious CEOs now find themselves in.<\/p>\n Deutsche Bank\u2019s move appears to be a new line in the sand for RTO mandates. The company has banned employees from working from home on a Friday followed by a Monday across their workforce.\u00a0<\/p>\n JLL\u2019s Aspey Price says this is likely an attempt to smooth out office space use. Most analysis has shown employees tend to pick Tuesday through Thursday as their three days in the office. That could lead to overcrowding in smaller spaces.\u00a0<\/p>\n Indeed, in a memo to staff seen by Bloomberg<\/em>, Deutsche\u2019s CEO Christian Sewing and COO Rebecca Short told employees that current office use was \u201cinefficient\u201d and that they are aiming \u201cto spread our presence more evenly across the week.\u201d<\/p>\n However, more aggressive moves like Deutsche\u2019s might not be well received, particularly without added perks like free meals.<\/p>\n \u201cThat\u2019s a tough sell. And I do think they may have some employee backlash around that unless they\u2019re offering something in return,\u201d Aspey Price says.<\/p>\n One water-cooling company, Bevi, thinks orders like Deutsche\u2019s are beginning to take effect<\/a>. The group has its coolers in 25% of Fortune 500 offices, including those of Apple, Netflix, and Uber.\u00a0<\/p>\n Usage data for these water coolers suggests attendance is slowly creeping up on Fridays and Mondays, though rates of use are still well below pre-pandemic levels.\u00a0<\/p>\n However employees choose to respond to their bosses\u2019 new guidelines, Aspey Price says the new realities of space mean it\u2019s unlikely this is the beginning of a full-time return to the office.<\/p>\n \u201cThere\u2019s tweaks around the edges, but three days a week is the norm.\u201d<\/p>\n<\/div>\nEmployer power returns<\/strong><\/h2>\n
The end of WFH Fridays?<\/strong><\/h2>\n
The return of the water-cooler<\/strong><\/h2>\n
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