Almost six out of 10 employers report that their plans for the return to work are stymied by uncertainty — specifically, a lack of clarity on the right timing, and persistent questions about how to provide a safe environment for their employees.
Moreover, fully half report reluctance from their employees to return to work. The coronavirus has infected more than
Arizent, the parent company of National Mortgage News, American Banker, Bond Buyer and other titles, released a new survey this week to understand how executives are planning to return to work.
Key findings
- About half (48%) of employers are currently in the process of reopening closed offices, and an additional quarter (27%) expected to do so in the June-through-August timeframe. Overwhelmingly, 92% of employers who had closed offices reported that they would bring back employees on a “phased-in” approach, and only 6% stated it would be in an “all at once” effort.
- While over half (54%) of employers reported that they were making no planned significant changes to office configurations or downsizing their footprints, there was a difference based on company size. About 67% of smaller firms reported keeping their offices and locations the same, compared to just 42% of mid-sized firms and 29% of larger firms.
- When it came to making changes, one-third (33%) of larger firms reported an interest in significantly downsizing their physical space going forward — a statistically significant finding when compared to mid-sized (9%) and smaller (14%) firms.
- Among employers seeking to make changes to their office space locations, the top three choices being pursued were a reduction in maximum allowable capacity for meeting areas (76%), e.g., conference rooms; followed by reducing the number of desks to permit social distancing (60%) and installing plastic barriers (40%) in the office.
- Employers identified several technology gaps in operating in a remote environment, with the top two factors being the ability to monitor employee productivity (58%) and the uneven access to high-speed internet among WFH staff. The third factor — inadequate technology support —impacted significantly more financial services firms (50%) than it did overall respondents (33%).
- Employers are planning investments in videoconferencing (34%), cybersecurity (31%), collaboration tools (27%), cloud-based computing (22%) and communications (22%) platforms over the next 12 to 18 months to support their employees’ needs.
- A majority (73%) of employers of all sizes are likely to allow employees to WFH permanently if their position allows it. The sentiment was strongly echoed by employers in financial services at 70% and professional services at 80%.
- Almost four-fifths of employees are very interested (48%) or somewhat interested (30%) in continuing to do their jobs at home, despite the fact that half of WFH employees (47%) reported working longer hours.
- Most (76%) of employees
would be comfortable with business travel starting in December and going through May 2021. In fact, by June 2021 or later almost all (94%) of employees would be comfortable with business travel and half (47%) would be willing to travel anywhere business is required.
- About three-quarters (72%) of employees stated that they would not want to travel to a conference or other large business gathering between June and August, and almost half (48%) reported the same sentiment for September through November.
This research is the third installment in a four-part series that began in late March as businesses were first transitioning into remote/work from home (WFH) environments. The first survey studied preparedness levels, followed by a second survey in May that checked on how businesses were adjusting to the new challenges of operating remotely.
The fourth and final survey is planned for late summer and will focus on how COVID-19 is accelerating disruption in their industries.
This wave three survey was conducted with 430 executives during June 12-22, 2020, across an array of sectors including financial services, wealth management and professional services. About 175 of the survey respondents were C-level executives and senior managers representing employers with decision-making abilities on their companies’ return to work plans. The remaining 255 respondents were employees over whom decisions would be implemented and their lives directly impacted.
As many companies have been operating remotely for nearly four months, it’s given some employers the time to re-evaluate their pre-pandemic real estate holdings, ranging from how much they will need going forward to how it will eventually be used. For those executives believing that office life will somehow return to pre-pandemic norms, there is the specter of government mandates that could squash any of those hopes, along with a possible second wave or resurgence in COVID-19 cases. In contrast, there are some realists who envision a “new normal” for the future of office environments and many have shared their views in this survey.
“Offices will be a place to meet and collaborate; not work,” said one payments company executive.
However, it’s not just employers grappling with the remote work environment and planning to return to offices — employees also have an interest in seeing if, how and when they do, as some are faced with challenges of working from home (WFH) and would prefer to be in an office.
“Keeping my work schedule from crossing over into personal [is a challenge]. I found that with being able to work remotely, I’ll work day and night,” said one professional services executive.
Despite the risks, employers are charging ahead with reopening their offices
Fifty-nine percent of employers have closed some or all of their offices on a temporary or permanent basis in response to COVID-19, with organizations of 1,000+ employees having reported a statistically significant higher closure rate (81%) than smaller companies (51%) with fewer than 100 employees, at a 95% confidence level.
In terms of the reopening process, large employers and medium-sized employers who had closed offices reported that they were planning to take a more thoughtful approach of reopening some offices when compared to smaller employers (under 100 employees), who stated that they would reopen them all at once.
From a timing perspective, for those employers who have closed some or all of their offices, almost half (48%) reported that they were currently in the process of reopening them. Just over one quarter (27%) expected the reopening process to take place between June and August, 12% reported it would occur between September and November, followed by just 3% viewing December through May 2021 as a return date. About 10% were still unsure about choosing a reopening date.
While state and local mandates could impact the reopening process, directionally financial services employers appeared to be more aggressive in reopening, compared to professional services firms who stated that their plans dictated a later summer reopening. (It should be noted that the difference was not statistically significant, albeit only directional).
One notable point is that one quarter (25%) of all employers reported a more cautious, wait-and-see type approach by reporting reopening dates of September and later, as well as not reporting a date at all (not sure yet). This caution may prove to be a rather prudent position should there be a
Even in hard hit states that have shown a recovery, such as
Overwhelmingly, 92% of employers who had closed offices reported that they would bring back employees on a “phased in” approach, and only 6% stated it would be an “all at once” effort. No major differences were found in those adopting a phased-in approach among financial services firms (94%) and professional services firms (96%), compared to all respondents (92%).
About half (47%) of larger firms (1,000+ employees) reported to be currently in the reopening process or preparing to do so in the June-to-August timeframe, with the balance (53%) having reported to wait until the fall of 2020 through May 2021, or are unsure as of a reopening date. One unique challenge facing these larger organizations, particularly companies with significant retail footprints such as call centers and branches, is whether they will need a physical location going forward.
The reopening process will bring with it some changes to the office as we knew it in 2019
Half (54%) of all the employers reported that they were making no planned significant changes to offices configurations or downsizing their footprints. Financial services (52%) and professional services firms (59%) echoed the sentiment of the overall group as well.
However, a major difference appeared among large and mid-sized companies who have more employees and a larger real estate footprint wanting to make changes. About 67% of smaller firms reported keeping their offices and locations the same, compared to just 42% of mid-sized firms and 29% of larger firms.
When it came to making changes, one-third (33%) of larger firms reported an interest in significantly downsizing their physical space going forward — a statistically significant finding when compared to mid-sized (9%) and smaller (14%) firms. Further, planned changes to the configuration within the office space were reported at a statistically significant higher level at large (24%) and mid-sized (25%) firms than at smaller (6%) firms. This is more than likely due to larger organizations having higher density levels of people operating in closer proximity than in smaller companies.
Among employers seeking to make changes to their office space locations, the top solution (76%) being pursued was a reduction in the maximum allowable capacity for meeting areas such as conference rooms, kitchens and other gathering spots.
This was followed by 60% of companies that planned to make changes reducing the number of desks and individual work spaces to permit social distancing. The third most common solution pursued, at 40%, was adding plastic barriers to the offices. While the barrier option was the third most chosen, it was at almost half the rate of simply reducing the number of desks in the offices.
The reopening process will be impacted by uncertainty, safety and employees’ hesitancy
There were three challenges facing employers that stood above the rest when it came to organizations deciding if, how and when to resume normal business activities — uncertainty regarding the timing of returning to the office (57%), establishing new safety measures within the office environment (55%) and employee reluctance to return to work for fear of getting sick (50%). While other factors did resonate with employers, such as maintaining compliance with health laws (27%) and employee burnout/mental health (26%), they were significantly lower in priority.
As employers are developing plans for a return to an office environment, they are weighing employee feedback (30%), risk avoidance (21%) and cost reductions (13%) as key drivers in influencing their decisions. However, when examining responses based on company staffing sizes, there was a bifurcation of which factor was most important. Risk avoidance is the top consideration for future office plans among large (33%) and mid-sized (31%) companies (1,000+ employees and 100-999 employees, respectively) in comparison to smaller firms (12%) with less than 100 staff. For smaller firms, the top factor influencing future office plans was employee feedback, at 35%.
The shift from office to home was dramatic — and exposed WFH technology gaps
The sudden and massive employee migration from offices, branches and call centers to a remote or home environment, can be likened to a stampede occurring during a Texas cattle drive that can send shockwaves to any and all in its path.
As an example of this impact, executives need to look no further than the video conference service Zoom as being a strong beneficiary of this shift to WFH.
The Arizent COVID-19 survey found that 81% of all employees were working in an office environment prior to the March 13 Federal government declaration of a national emergency, with just 19% working remotely. Almost immediately after the March 13 announcement, 78% of employees reported they were working remotely, and just 22% remained working in an office environment.
An example of how rapid this transition occurred was highlighted in the second wave COVID-19 Arizent survey regarding
Broadly speaking, the transition to a largely WFH environment went well, as most companies in Arizent's
Despite the fast transition to a WFH environment, employers identified several technology gaps in operating in a remote environment, with the top two factors impacting all employers relatively evenly — the ability to monitor employee productivity (58%) and the uneven access to high-speed internet among WFH staff. The third factor — inadequate technology support — impacted significantly more financial services firms (50%) than it did overall survey respondents (33%).
Employers are planning investments in videoconferencing (34%), cybersecurity (31%),
collaboration tools (27%), cloud-based computing (22%) and communications (22%) platforms over the next 12 to 18 months to support their employees’ needs.
Employer sentiment on WFH is very supportive
The large number of unknowns that remain regarding COVID-19, particularly with no vaccine being immediately and widely available in the near-term, is forcing many employers to face the reality that the WFH experiment is more likely to become a permanent aspect of the future of work.
“We expect 50%+ [of] team members will permanently work remote,” said one retail/commercial bank executive who was interviewed as an employer able to make decisions about his company’s workforce.
The survey found that a majority (73%) of employers of all sizes are likely to allow employees to WFH permanently if their position allows it. The sentiment was strongly echoed by employers in financial services at 70%, and professional services at 80%. There was a slight regional influence in the findings, as employers in the West (88%) were significantly more likely to make WFH a permanent option than their counterparts in the Northeast (62%).
Among the employers likely to make WFH a permanent option, the employee’s functional role or department was reported as the top factor (50%) being used to determine which employees should have the option to work from home on a permanent basis.
There may also be a blend of WFH and office time given an employee’s role or need to use the office for specific purposes, so it does not necessarily mean that decisions will be clear cut.
One mortgage company executive stated that its office space is being designed in such a way that the employer "will use [it] for workers that have to handle mail and for meetings." It is moving to a hoteling structure "for people who need some time in the office and some time [being] remote.”
Employees want to work from home, fear getting sick if they return to the office
The majority of employees, regardless of industry, have shifted from an office to a WFH environment as a result of the pandemic.
Among those now in a WFH situation, about one-third (32%) reported that this was a new experience for them. Despite the relative safety of being remote, there is the danger of employee burnout — about half of WFH employees (47%) reported working longer hours. However, longer hours don’t necessarily mean employees in a WFH situation want to return to an office building, as almost four-fifths are very interested (48%) or somewhat interested (30%) in continuing to do their jobs at home.
Event planners, conference companies, caterers and an array of other businesses that support large corporate events should expect a potential delay in the return to business as usual, from an employee comfort perspective. About three-quarters (72%) of employees stated that they would not want to travel to a conference, sales meeting or other large business gathering between June and August, and almost half (48%) reported the same sentiment for September through November. Interest in attending events in lesser impacted areas does pick up among employees, with about half (48%) stating they would attend an event in such an area during the December-through-May 2021 time period.
Employees' interest in traveling to conferences or large sales meetings is just one variable in the formula. The other two factors include state and local governments willing to host large gatherings, including professional business events, and the dynamic nature of the contagious coronavirus.
Conclusions
As quickly as companies closed their offices following the national emergency declaration on March 13, they are pursuing a reopening strategy with the same vigor. But they also recognize the risk that recent surges in COVID-19 cases may force them into a hasty retreat.
However, smaller companies have both fewer risks in an early reopening and fewer opportunities to benefit from waiting for the virus to run its course.
Larger companies are evaluating their long-term physical office space needs, as the real potential of large remote workforces could lead to lower real estate expenses, particularly in high-cost locales such as New York, San Francisco and Los Angeles. Further, larger companies will need additional time to potentially reconfigure their high-density workspaces and determine hoteling procedures for remote employees who want or need to come into a central office location for a variety of reasons.
The dramatic shift to a WFH environment exposed many unforeseen gaps and challenges that were most likely not included in organizations’ business continuity plans. Industries and companies that rely heavily on face-to-face interactions and paper documents, such as banks and mortgage businesses, have seen the vulnerability of operating in their old business model when they have more nimble digital-only competitors.
It is now time to invest in new technology and business processes that remove the reliance of in-person, physical contact to complete transactions as well as acquisitions. This should be performed along with making financial investments in the next 12 to 24 months in technology and supporting infrastructure that can facilitate an organization’s need for collaboration in a distributed work environment. The risk of waiting or spending too much evaluation time could leave a company exposed to the next crisis that compels workforces — and customers — to operate remotely.
The WFH experiment demonstrated the resiliency of companies to operate on a remote basis for an extended period of time, however it also exposed several technology gaps such as being unable to monitor employees’ productivity and uneven high-speed internet access among employees. As companies prepare for the next crisis, as well as consider having a distributed workforce going forward, addressing these two gaps will be critical to removing obstacles in the path of an organization’s overall long-term success.
Additionally, as many employees experienced a WFH environment for the first time in their careers, there is now a strong demand among staff to make this a permanent arrangement. Most employees have legitimate health concerns about returning to normal business activities, including a shared office location, as fears of contracting the virus from colleagues or commuting to and from work are real possibilities. As such, companies will need to consider accommodating these WFH demands, but they can also take advantage of a more remote workforce that would allow a smaller physical office footprint.
Companies will need to guard against employee burnout as many staff reported working longer hours and a blurring of the line between work and personal life.
Finally, as it relates to business travel and conferences, companies will need to push the boundaries of operating in a virtual environment for large gatherings, as few employees have interest in traveling anytime soon. Despite some employees expressing a willingness to travel to less affected areas, the challenge is that hot spots can change rather quickly, making it hard to predict when and where it will be safe to meet.
