Before the onset of COVID, we had been writing papers, blogs, and even in our book Catalyst: Leadership and Strategy in a Changing World, we have considered the future of remote work, period. Due to advances in technology and updated business practices, the basic underlying assumptions of how large organizations made decisions were being disrupted by globalization automation, supply chain risk issues, changing demographics, the movement of people into cities, and several other factors that are happening at a faster rate than any time before. Therefore, it’s important in the era of COVID to look deeper at the long-term changes that are occurring.
We know from research that companies are taking a tough look at how long they’ll allow their employees to work remotely during COVID. We also see indicators that some companies will be making permanent changes to how their teams operate and looking at using remote work as a perk or a hiring reason to attract more talent, regardless of where they live.
Future of Work
We had previously discussed the future of work, post-COVID 19, in which we considered the impact COVID would have on how we work. Prior to COVID, we were already exploring the option of working remotely in which we began to see the flaws of attempting to integrate employees using remotely into a traditional environment—often causing a disconnect for remote workers compared to their non-remote counterparts, leaving remote employees struggling to connect and engage with the culture of a work environment.
For more information on the subject, check out our recent Catalyst TALKS with Liza Rodewald in which we discussed the future of work. Discussing the common mistakes, companies make when trying to transition into remote work and adapting to find a system that works for your company.
Impact on Commercial Real Estate
The current pandemic has caused various professionals to work remotely for an undetermined period; among those professionals are those in residential real estate. In comparison, commercial real estate has long since been a highly mobile and flexible industry that is no stranger to remote work. Current events have forced agents to evaluate their ability to work efficiently from home. One study found that 80% of buyers have delayed or stopped their house search, yet the same study found that 20% of those delaying their search did so in hopes of taking advantage of low-interest rates and getting a good deal on a home. Despite the delay, it seems that the real estate market is merely adapting to the current restrictions, with many realtors offering buyers virtual and facetime tours in addition to socially distance tours. However, this is not to say that the market cannot be harmed, as every market is different.
In terms of consumers, remote work has been changing what people look for when considering a home. According to the U.S. Bureau of Labor Statistics, in 2019, 24 percent of employed persons did some or all their work at home, while at the time the number left remote workers as a minority, it was a number that had been steadily growing with this pandemic only increasing the percentage of people working from home. With the option of working remote, employees are likely to consider relocating to areas with a lower cost of living, away from major cities. According to Martin Eiden, an associate broker with Compass in New York, the desire for a home in which one could build a dedicated home office is increasing in popularity, shifting away from the idea of having a dedicated home entertainment area.
While remote work is not a new concept, 2020 has had an enormous impact on the workforce. Between 2005 to 2017, there was a 159% increase in the number of people telecommuting in the U.S., a number that has only grown over the past few years, often seen as the future new normal. We had previously discussed the pros and cons of work in a post-covid world, touching on a few critical concerns for the future. As the pandemic continues, we have observed changes in employer/employee relationships and other challenges that must be addressed.
For employers, it is a matter of maintaining your employees engaged in company culture. A Glassdoor survey found that 56% of employees find a good workplace culture more important than salary, which can prove to be a challenge in remote workers’ environment. As we previously discussed, working remote can have some benefits to efficiency while having the downside of blurring an employee’s life and work, often leading to lower morale. There is a need for camaraderie to prevent feeling isolated, some suggestions being creating fun chat channels and after hour virtual socials. Another challenge for both employees and employers to consider is unintended tax issues caused by remote work. Depending on where your remote office will be based, there could be additional tax burdens in store for you and your employees. Additionally, depending on where your employees are based, there are also local state, city, and in some cases, county taxes to consider.
Opportunity for Change
Elected leaders in the past often had large budgets granting them the luxury of fighting about issues that were often seen as divisive or trivial in some cases. With severe impacts on our budget and its long-term implications for infrastructure, education, energy, and a whole host of other issues, we have a real opportunity now to do better going forward.
There are many examples of higher education, corporate America, non-profits, and even our elected leaders changing what we thought would never change—allowing us to reevaluate many of the things that we do. In a recent piece by the new Dean of the Hobby School Of Public Affairs, Kirk Watson, he lays out nine opportunities he calls a resiliency playbook. The playbook is an outline consisting of nine principles and associated actions to create an inclusive and more resilient Texas.
This time period allows executives to look at transitions in their careers and examine the number of hours they work, time spent with family, and moments for giving back to their community or volunteering. When you package it all together, hopefully coming out of this COVID experience, people can grow as an organization, as an individual, both personally and professionally.