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Here’s what you need to know today:
- Why Are Women Leaving The Workforce? NEW
- Agility Will Be Essential To The Future Of Work NEW
- How AI Could Hinder Workplace Performance NEW
- Savills India Anticipates Drop In Coworking Leases
- It May Take Years For The Office Market To Rebound
- Offices Will Look Vastly Different In The Future
Why Are Women Leaving The Workforce?
Issues that have been heightened by the pandemic are causing women to leave the workforce en masse. Finding balance between parental duties and work responsibilities has become nearly impossible for many.
For instance, according to the National Women’s Law Center, four times more women dropped out of the workforce than men in September. Additionally, a study by McKinsey found that one in four women have expressed reevaluating their careers or leaving the workforce altogether.
This major challenge is being amplified by the fact that several businesses do not have the proper protocol or policies in place that support alternative work arrangements, particularly for working mothers.
However, now that many business leaders have warmed up to the idea of remote working positions, women may have more opportunities for them in the near future.
“You’d think that working from home would be better for caretakers, but many also need the physical space to separate and concentrate,” said Gabrielle Harvey, VP, brokerage, Integrated Portfolio Solutions at JLL. “The actual utilization rate in office space pre-COVID-19 averaged 60%, according to JLL’s occupancy benchmarking guide. While the pandemic has obviously created many challenges, in this case, it’s actually giving companies some breathing room to make changes that will help them retain and attract women.”
A report from Colliers predicts that a new generation of flexible workspace offerings will become the norm. In fact, the firm anticipates that flex space could double or triple in the next five years.
Agility Will Be Essential To The Future Of Work
A new study from Gartner titled ‘Future of Work Trends post-COVID-19’ predicts that companies will focus on geographically diversifying and investing into secondary markets to meet demand for increased flexibility.
Remote working has allowed organizations to manage their operations for the time being, but many workers are expressing the desire to come back into the office.
This means that companies will need to find flexible solutions in their workplace offerings and employee expectations.
For instance, Tata Steel’s ‘Agile Working Models’ policy was created to move towards a “trust and outcome-based working culture” in order to retain top talent and improve the overall satisfaction of their employees.
“Flexible working provides greater freedom to choose locations and make essential life decisions such as supporting families, be it ageing parents or spouses with non-transferrable jobs,” said Suresh Dutt Tripathi, VP Human Resource Management at Tata Steel. “This will help in retaining and enriching our key talent from across the country and attract workforce for location agnostic roles.”
This has led to the emergence of the hybrid work arrangement, which allows employees to essentially work from anywhere. Many major companies, including Microsoft, have opted for a hybrid work policy in order to reap the benefits of both remote working and in-person collaboration.
“Backed by advanced IT infrastructure, the new model will give employees options of both physical and virtual interactions, and allow them to seamlessly work in a virtual environment while managing their professional and personal lives,” said Ruchu Bhalla, India’s Country Head at tech firm Pitney Bowes.
How AI Could Hinder Workplace Performance
The Trades Union Congress (TUC) has launched a taskforce to study the role that artificial intelligence could have in managing employees, but a new TUC report also covers the concerns that workers have on the use of AI in the workforce.
The ‘Technology managing people: the worker experience’ report revealed that the pandemic has accelerated technology usage, with the AI recruitment market anticipated to be worth $400 million by 2027.
According to the findings, 60% of respondents said that using technology to make decisions about employees could lead to biased treatment if not handled correctly. Additionally, 56% said that technology could hinder the trust between employers and employees.
AI technology is currently being used to analyze facial expression, tone of voice and accents to determine whether a candidate is suitable for a role. The TUC warns that this could lead to unfair treatment and isolation if not utilized appropriately.
The new taskforce hopes to develop new ways to protect workers from disciplinary performance management from AI.
This will include more worker consultation on the implementation of new technologies, empowering workers with more technical knowledge and allowing collective bargaining on technology use in the workplace.
“Worker surveillance tech has taken off during this pandemic as employers have grappled with increased remote working,” said Frances O’Grady, general secretary at TUC. “Big companies are investing in intrusive AI to keep tabs on their workers, set more demanding targets – and to automate decisions about who to let go. And it’s leading to increased loneliness and monotony.”
Savills India Anticipates Drop In Coworking Leases
A new report from Savills India has found that leasing from coworking operators is expected to drop 58% year-on-year due to corporate demand for flexible space falling.
The report revealed that leasing will tumble to 3.4 million square feet across six of India’s major cities of Delhi-NCR, Mumbai, Bengaluru, Hyderabad, Chennai and Pune, compared to 8.1 million square feet last year.
Despite this huge drop in leasing activity, Savills still expects numbers to slowly grow over the next two years as the industry begins to recover from the ongoing pandemic.
In fact, coworking takeup is expected to rebound around 15% in 2021, which is similar to 2019 numbers, and 25% in 2022.
“Over the years, shared office space has emerged as a separate asset class, bringing significant cost-advantages to occupiers,” said Arvind Nandan, research and consulting at Savills India MD. “However, we believe that flexible workspaces will reinvent and reposition themselves, emerging stronger on the other side of the pandemic.”
It May Take Years For The Office Market To Rebound
The commercial real estate industry is going through arguably one of its most trying times in modern history. After Pinterest paid almost $90 million to get out of its San Francisco lease, many wondered if this could be the beginning of the end for offices.
With millions of workers becoming proficient in remote working tools, it seemed like coming into the workspace wasn’t the necessity business leaders once assumed.
The sentiment is shared throughout many companies, too. Employees are enjoying the lack of stressful daily commutes, while businesses are cutting down on expenses for expensive workplaces in major cities.
However, executives are questioning how much space they will need in the future, and whether working from home in the long-term could hinder productivity.
According to Jason Vanslette, a mortgage foreclosure litigation specialist at the Kelley Kronenberg law firm, it takes longer for office building owners to default on a loan. However, he anticipates that the overall economic slowdown will leave the office sector struggling for the next two years.
Currently, 14% of office space is vacant according to Cushman & Wakefield, and rates are expected to grow to 17% by 2022.
“It’s hard to determine what’s permanent and what’s not in the middle of a crisis,” said John Sullivan, chairman of DLA Piper’s U.S. real estate practice. “After 9/11 and those horrifying pictures of planes hitting the World Trade Center, a lot of people predicted the death of high-rise office buildings. That was an understandable sentiment, but it obviously proved false in the long term.”
Offices Will Look Vastly Different In The Future
Office vacancies and subleases have continued to soar across the country. Companies with leases that are about to expire are opting for short-term renewals, leaving the future of the office industry in limbo.
Occupancy in Southern California has fallen 6.2 million square feet since the beginning of the year, which is equivalent to emptying out the Empire State Building twice.
However, Lew Horne, CBRE’s president for Southern California, Arizona and Hawaii, believes that the office still has a future, but it will look much different.
“I think at first, when everybody was working at home, there was this euphoria of, ‘Hey, I don’t have to commute. This looks great. I’ve got this new relationship with my boss, and Zoom is fantastic,’” said Horne. “But I think what’s gone on over the last eight months is people have recognized, I miss my culture. I miss the collaborative nature of my company. If I’m an aspiring young professional and working up in the organization, I miss my mentor.”
Horne added that the office will likely have to make big changes in terms of design and medical protocols in the future.
For instance, CBRE’s “free address” system allows people to share workstations if it is not in use by someone else, but the future will require these spaces to undergo increased sanitation.
Horne also said that while the office will still be essential to well-oiled business operations, he admitted that until a vaccine is widely available and employees feel safe, they should have the option to either work from home or come back into the office.
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