Telecommuting or remote working enabled by technology and online access has long been a commercial real estate market worry. The phenomenon of employees skipping on commutes and avoiding distant offices has raised fears of a softening national demand of office space since at least 1996. As reported by Global Workplace Analytics, regular remote working at home among the non-self-employed population has grown by 103% since 2005.
Office landlords and managers: if the telecommuting boom and its attendant declines in demand for office space in some markets have got you down, this week has two pieces of good news.
1) Tech giant Yahoo! announced this week that it would no longer allow a telecommuting workforce. New CEO Marissa Meyer rolled out the policy with an announcement from HR head Jackie Reses ending all “remote” work in a memo from to the search company’s 11,500 employees:
To become the absolute best place to work, communication and collaboration will be important, so we need to be working side-by-side. That is why it is critical that we are all present in our offices. Some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people, and impromptu team meetings. Speed and quality are often sacrificed when we work from home. We need to be one Yahoo!, and that starts with physically being together.
Beginning in June, we’re asking all employees with work-from-home arrangements to work in Yahoo! offices. If this impacts you, your management has already been in touch with next steps. And, for the rest of us who occasionally have to stay home for the cable guy, please use your best judgment in the spirit of collaboration. Being a Yahoo isn’t just about your day-to-day job, it is about the interactions and experiences that are only possible in our offices.
It is left to the commercial real estate professional to conclude wether or not upward lease adjustments for your property’s office hallways and cafeterias are justified in the wake of the announcement.
Staying on top of the macro trends in office space markets means watching a lot of factors. In terms of disruptive change, I think the biggest story is a technology-driven and culturally-driven decline in demand for traditional office workspaces. Telecommuting, shared and temporary workspaces and wireless internet access are genuinely reshaping the expectations of the marketplace from within and without. Add in generational expectations — recent grads, weaned on constant access to the internet don’t see tethers of any kind in a favorable light, nor cubicle farms as necessary, let alone desirable — and you have a genuine transformation in progress.