why are companies trying so hard to have employees back in the office?
why are companies trying so hard to have employees back in the office?
I have posted this on Reddit (askeconomics) a while back but got no good replies. Copying it here because I don't want to send traffic to Reddit.
What do you think?
I see a big push to take employees back to the office. I personally don't mind either working remote or in the office, but I think big companies tend to think rationally in terms of cost/benefit and I haven't seen a convincing explanation yet of why they are so keen to have everyone back.
If remote work was just as productive as in-person, a remote-only company could use it to be more efficient than their work-in-office competitors, so I assume there's no conclusive evidence that this is the case. But I haven't seen conclusive evidence of the contrary either, and I think employers would have good reason to trumpet any findings at least internally to their employees ("we've seen KPI so-and-so drop with everyone working from home" or "project X was severely delayed by lack of in-person coordination" wouldn't make everyone happy to return in presence, but at least it would make a good argument for a manager to explain to their team)
Instead, all I keep hearing is inspirational wish-wash like "we value the power of working together". Which is fine, but why are we valuing it more than the cost of office space?
On the side of employees, I often see arguments like "these companies made a big investment in offices and now they don't want to look stupid by leaving them empty". But all these large companies have spent billions to acquire smaller companies/products and dropped them without a second thought. I can't believe the same companies would now be so sentimentally attached to office buildings if it made any economic sense to close them.
You're viewing a single thread.
They're wasting money on big buildings and rent.
Also, they want control of your activity while your on the clock. It bothers them if you're more productive, get the same amount of work done but can relax more at home. Which is the way it should be. If I can do the same work in 4 hours than I can in 8, I should get paid the same, and be able to relax, instead of being made to stay at work for 8hrs and be given even more things to do to just stay busy.
I am surprised they don't just cut costs by not having a physical location then? Or is this just while waiting out lease agreements.
Some smaller companies are doing this. It makes them more agile financially and actually helps their growth to not have a building to pay for. I don’t understand the larger companies.
They spent millions building a facility or are locked into 5/10 year leases. I've also heard it's because cities are dying, no one in offices to eat 'down the street' at the food shops, people don't stop at the bar on the way home, no impulse shopping trip because you're already out.
What? That’s absolutely incorrect. Cities are the number one most sought after and thriving alternative, especially among young people.
Maybe cities in the US, but that’s because they’re mostly poorly designed parking lots for suburbanites.
Cities are certainly not dying anywhere else on Earth wtf.
wait what? where are cities dying?
Isn't it the opposite, where people move from the countryside into urban areas?
It's probably a uniquely American thing, similar to how many malls are dying here while they thrive in Europe. Cities have been dying a slow death since like the 70s here because suburbs are a net loss in terms of revenue because they're more expensive to maintain than the taxes they bring in, so the only way cities can afford them is to sell more land to developers to build more suburbs, which then cost the city money, and repeat into infinity.
Cities have also had a general decline in the population within urban areas during that time, with people moving out to the suburbs for the "American Dream" of owning your own house with a white picket fence, 2.5 kids, and a cat or dog (and to avoid having to look at any poor people, immigrants, or black people). This was exacerbated further during COVID as people fled denser areas. The house prices in my town that's about an hour away from one of the most expensive cities in the country (comparable to LA prices in the city here) jumped up practically 50% during COVID while prices in the city dropped something like 20% during the first year. Prices in the city have since come back up and are now above what they were before, but prices here never came down.
Cities here also tend to have a business district, sometimes even a "central business district" that's at the heart of the city, which is made up almost exclusively of office buildings/other companies, with workers commuting into the city. Even my town has people who drive every day to their job in the city. With many of these buildings sitting empty during COVID, there's been a push for urban renewal by converting them into apartments, but that's easier said than done. Offices simply don't have the same infrastructure that apartments need in terms of basic things like plumbing, and would need to be entirely gutted, but it would be a much needed fresh supply of housing that would probably help reinvigorate these city centers.
What's the penalty for a big Corp to break their lease? I can't imagine they care about credit rating.
I mean good? There is far to much concentration of people in cities and shit is too expensive.
My company just moved their office space into a smaller section of the parent company's building, which funnily enough is nicer than where we were beforehand. Going in every few months makes the trip into London feel like a nice trip instead of a commute.
Yeah my office rents a WeWork space downtown and we only go there a couple days every few weeks. I like it, it’s a change of pace.
Plenty are, it's just that the largest companies built those places, they cannot trivially liquidate them. Plus they usually own the whole land, so cutting part of it away is not easy.
They still should. For many jobs office work is a completely unnecessary waste of:
- Productivity (via constant distractions)
- Time (commuting)
- Money (via the building maintenance costs)
- Space (the actual building)
- Resources (heating and shit)
But managers are loathe to ever admit any failings, our market culture frowns upon this. Hence admitting that your building is no longer needed is not a thing any manager to wants to bring up in a meeting to their bosses, so back to the office it is. :<
And that's why capitalism is so efficient.
/s
it’s just that the largest companies built those places
And that's the biggest one imho: They were able to leverage their huge size to save money long term by building and owning.
Now that the status quo has changed, they want to change it back so that their advantage is still in effect.
Correct. They either own the buildings and have to pay for upkeep (and can't get rid of them) or they're on a long term lease.
My employer spent tens of millions having several custom buildings built over a decade ago. They house our servers as well. The only way they could get rid of their buildings is to get new buildings for the servers. That's a pretty tough sell.
A friend works for a housing association that had a very fancy office and that's now been sold as they are all working from home.
Another reason you've not yet been given is that some of these companies have decades long contracts for renting. The government should intervene and cancel the contracts and pay for them to be converted to flats tbqh. Someone will say "But that will cost more than building a new one![citation needed]" but knocking down half the office buildings at once will probably give everyone in the cities supercancer*[citation needed]*
I'm extremely pro-WFH for professions that can. I've been doing it for 10 years and it has only gotten better since others started to experience it and have empathy for what it means to be a remote worker. Just getting that out of the way before chatting more about hidden difficulties of converting buildings to residential use...
I can't speak for European office buildings (your use of "flats" has me assuming you're on the other side of the pond from me), but a large number of US buildings would either have to be 100% gutted back to the main supporting beams OR pulled down and rebuilt. Issue here is a combo of proper placement of utility lines (mostly plumbing) within the building and the added weight residential use brings rather than business use.
Large office leases here have a lot of control over how their floors are laid out, but floor planning normally takes electrical runs into consideration and will leave spaces like kitchens and bathrooms unmoved. Executive offices and other private interior spaces can be created/adjusted by making interior walls and tying into electrical connections already in a floor or drop ceiling.
Plumbing is a whole other monster and takes a lot more work. Not an insurmountable consideration, just harder.
The weight of residential living is one I hadn't considered until someone pointed it out to me. In addition to all the additional plumbing needed (whose pipes add tonnage by the time you've converted a building), you also have to consider water within those pipes, and if a lot of people run their kid's evening bath around 7 PM, that's even more tonnage, normally all in a similar vertical line because of repeated floor plans. A lot of corporate buildings here, esp older ones, just weren't engineered for that and a lot would need significant remediation to support it.
I have way less to say about the super cancers... We did use a LOT of asbestos as we built up urban areas, though.
Yeah I think the floor weight is the actual concern and reason it doesn't happen rather than zoning, but if it's possible to renovate it within something close to the same cost as starting again, they should renovate it. We need to start taking into account things like the pollution for stuff like this but it not being considered doesn't mean someone isn't getting the bill. I don't think people who would prefer to demolish and start again consider amount of shit that will be put into the air if you knock down a good portion of the office buildings, even if it doesn't effect much on a grander scale it will effect the actual cities.
Would be interesting if a structural engineer did a video on all the problems and solutions etc of converting office buildings. Maybe even getting away with the bottom few floors on all office big buildings would be a good start.
I’ve never understood the empty buildings argument. Wouldn’t the company be “wasting” just as much money if the building was empty or full? Might even cost more to have it occupied since then you need hvac.
No, if the building was empty, they should get rid of it. But there’s the whole sunk cost thing if they built it themselves or are in a multi year lease
Not just rent, they own those big buildings. They're assets, and what happens when everyone realizes they don't need those buildings at the same time? Corporate real estate crashes and those assets are worthless. Nobody wants a huge asset dropping off their balance sheet because they let their employees wfh before they could offload their offices.
The shitty middle management who think like your second point are convenient, but I don't think they're the ones making the decision to call employees back in a lot of cases.
That does not make sense at all if you consider the number one priority of any company: money. If they make just as much or even more when people work more efficiently they would not care.