The Resilient Workplace: Part 1
A Measured Response to COVID-19
At the time of publishing this report, the world is in the grips of a global pandemic. The novel coronavirus that caused COVID-19 has infected well over one million Americans and taken a ghastly toll. Over 50,000 US citizens have lost their lives (Washington Post, 04.22.20). The virus is highly contagious, with research suggesting that the gestation period for the coronavirus is long—up to two weeks (Harvard Health Publishing, Harvard Medical School, 04.20.2020)—and that as many as 25% of those infected show little if any symptoms (NPR, 03.31.2020). As such, seemingly healthy people can be vehicles for a silent and sinister threat.
In response to the outbreak, the US has entered a state of virtual lockdown. At the center of the response is the US healthcare system, which is at risk of being overrun should the number of active coronavirus cases exceed the operating capacity of the nation’s hospitals. To curtail the spread and “flatten the curve,” people have been instructed to refrain from interacting with each other to reduce the transmission of the virus. Non-essential businesses have ceased operations, and a significant portion of the US workforce has been thrust into working from home for the foreseeable future.
Political leaders at the state and local level, as well as leaders of large organizations and institutions now face a difficult challenge. Until widespread inoculation occurs, the simultaneous threat to human lives and economic livelihoods remains the pressing challenge for leaders to weigh. As a result of the standstill, millions of people are out of work and a staggering 26 million Americans have filed for unemployment since mid-March (NYTimes, 04.23.2020). White House economic adviser Kevin Hassett recently warned that unemployment levels could exceed those seen during the Great Depression (CNBC, 04.26.2020). In response to mounting economic and political pressure, the Trump Administration has recently communicated guidelines to gradually re-open the country along a three-phase plan (Opening Up America Again Guidelines, 04.16.2020).
The so-called “shape of the recovery” is by far the most pressing concern for the financial markets (Forbes, 04.23.2020). A “V-shaped” recovery—indicated by a steep decline, followed by an equally steep rebound—is the most idealistic. A “U-shaped” recovery—marked by a steep decline, a prolonged valley of stasis, and then a gradual resurgence—is more cautiously optimistic. An “L-shaped” recovery—with a steep decline and an unknown period of stagnation—is the most alarming. To compound the matter, as transmission of the virus correlates with increased human interaction, many experts believe we are likely to see a second-wave of COVID-19 once economic activity resumes in earnest (The Washington Post, 04.22.2020). That is the dreaded “W-shape.” Regardless, the recovery will not be as simple as flipping a switch. In all likelihood, it will look different for every market sector and every organization therein. Planning among these sets of alternative scenarios is the first step in building a strategic recovery plan.
BHDP has cultivated a Knowledge Community of impressive and thoughtful leaders. Historically, the firm has canvased this network for input, insights, and perspectives on the future of work. Faced with an uncertain challenge to our social health and economic livelihood, we felt it wise to reach into this group to mold a measured and actionable response to the crisis at hand.
On April 15, 2020, BHDP facilitated a virtual roundtable with over sixty (60) representatives from corporate real estate. Participants from 40+ companies, representing a variety of market sectors and millions of workers, shared perspectives on the immediate and future state of the workplace. The following report includes strategic takeaways from the discussion as well as high-level recommendations for leading the reintegration of the workforce into the physical workplace.
However, the responsible approach, from the standpoint of corporate real estate, is to scenario plan for the eventual return of the workforce when the current threat subsides. This crisis, like others before it, will no doubt have a lasting effect on the national psyche. Until such time as a vaccination is produced and widespread inoculation occurs, the lingering uneasiness caused by this silent threat will likely remain.
It should be noted that BHDP has no insight as to when the pandemic will cease. In the opinion of the firm, the current pandemic is a medical crisis first, an economic threat second, and a business continuity challenge third.
“At one point in time every organization existed somewhere on a continuum as it related to their workplace evolution. Some were closer to 1-to-1 seating ratio while others were incorporating free-address, smart work, agile work, hoteling, or hot desking—this has now put many companies all in the same boat.”
The Four Phases of the Coronavirus Crisis Recovery
With respect to the workplace, there are four phases to the coronavirus crisis recovery. The first phase began in early March and continued through the beginning of April, with the shuttering of schools and businesses. During this initial response period, the US workforce scrambled to learn new technologies, new social cues on digital platforms, and new work schedules. Estimates of the percentage of the workforce that worked from home prior to the pandemic vary, but a US Census Bureau survey from 2017 suggests that number was about 3% (The Independent, 04.27.2020). When thrust into new working conditions, many adapted to working from home for the first time, with the added pressure of caring for children who had been simultaneously displaced from their schools. We all recall the apologetic faces of mothers and fathers juggling toddlers on team calls.
We are currently in the second phase of recovery—a period of extended uncertainty. The American workforce has transitioned to a prolonged state of social isolation. Working from our makeshift offices across the country, we are now trying to make do. Many have begun to recognize the significance of the physical workplace, not only as a tool for facilitating social connections, but also as a destination that is separate and distinct from home. The ideal of work-life balance has been obliterated for many. According to data from NordVPN, the American workday has been extended by as much as three hours (The Independent, 04.27.2020). The data is still out on whether that time is being used productively, but the pressure is mounting to return to something more “normal.”
The third phase—the trajectory of recovery—is perhaps the most difficult to predict because it depends on a variety of both exogenous and endogenous variables. External to every company, the epidemiology of the locale, the directives of the state, the density of the population, and the reliance on public transportation predicate varying degrees of risk. Taking those factors into consideration, companies must then account for internal variables, including the heath profile of the workforce, the relative merits of remote work, the degree of external interaction required to accomplish work, the structural and operational preparedness of the workplace, the organization’s appetite for risk, and importantly, the readiness of the workforce. As such, the recovery trajectory will likely vary across an organization’s portfolio. Corporate real estate must play a crucial role in working through the difficult questions at the heart of phase three.
CREs largely agree—we are headed towards a so-called “new normal,” which comprises the fourth and final phase of coronavirus recovery. For some, the future will be largely indistinct from the past, with the workplace showing only modest evidence of the coronavirus crisis. Most, however, believe that the coronavirus crisis will have a long tail. For starters, millions have been displaced from their jobs, filling the labor pool for the first time in years. Additionally, the forced adoption of new tools and methodologies will challenge prevailing practices. We will work differently. And finally, the role of the workplace itself will likely evolve. For some, it might look more like a corporate clubhouse for on-site retreats. For others, it might be a safe harbor for extended periods of thoughtful interaction. For all, the workplace will likely demand more variety and flexibility than ever before.
“One of the biggest challenges will be bringing people back to the labs and offices. There is a minimum threshold of safety and comfort that we must meet. In the end, I see a higher degree of flexibility, both within and beyond the workplace.”
Initial Response and Extended Uncertainty: Pandemic at Present
Before the pandemic became a dire threat, most organizations were challenged to strike the right balance between physical and virtual work. For many, the coronavirus initially presented itself as a sort of social experiment—forcing millions to work remotely and tackle the challenge head on. BHDP received 50+ survey responses from a highly targeted group of corporate real estate (CRE) executives. When asked about the transition from physical to virtual work, over 85% indicated that they were somewhat or extremely prepared for the shift based on prior actions undertaken by their organizations. In addition, roughly 70% indicated that the uncertainty at hand was manageable. While the magnitude of the coronavirus epidemic was certainly unknowable, the impact to business continuity—especially for knowledge workers—appeared to be moderate and manageable. Indeed, when surveyed, most indicated that maintaining business continuity remained the top priority for their organization.
However, when asked about the degree to which COVID-19 would shift their core business, a significant number of respondents indicated that the pandemic would have a sustained effect. 50% believed the shift would be moderate. 16% responded that the change would be dramatic. 3% signified that the shift would be fundamental and profound. Most respondents indicated that their top priority for the future is to develop a forward-looking strategic plan to capitalize on emerging opportunities.
Organizations have been driven to very seriously consider where, how, when, and with whom work gets done. As business priorities shift from continuity planning in a virtual world to reintegration strategies for an uncertain future in the physical one, the additional irony is that corporate real estate plays a significant role, regardless of the location of the workforce. If space is a proxy for culture, then real estate leaders are stewards of an unseen and yet unbelievably essential organizational asset. The second and third priorities for most CRE execs, immediately after driving the business, are sustaining the culture and delivering healthy environments, respectively.
Selected Survey Responses
As businesses grapple with the severe decline in economic productivity, we are all asking the same question, “when will things return to normal?”
The smart answer is, “We don’t know—maybe never.” Once states pass a two-week period of declining incidence, the federal rules stipulate that a phased return to work can commence. Excepting those organizations impacted by federal production mandates, the decision about where, when, and how to return to work remains solely at the discretion of business leaders. With each locality presenting its own unique set of risks, every organization must weigh its financial urgency against its operational risk and make an informed, independent decision regarding:
- Population Exposure – Who must return, who must not, who is ready, who is not, and what about the fraught nature of classifying some people as “essential” and not others?
- Timing / Trajectory – When to return, in what order, and along what trajectory?
- Workplace Readiness – How will the environment be (re)structured to ensure adequate spacing and proper circulation? What measures will be taken to reduce undue risk?
- Operating Best Practices – How will cleanliness and sanitation be ensured? What role will technology play? What can we learn from others globally?
- Leadership – Who’s on the core team? How will we make a prudent decision? What will our decision say about the organization? How will we communicate accordingly?
Representatives sampled indicated that there are varying appetites for risk and a spectrum of strategies for returning to work. On the extreme end, the BHDP team has noted a handful of organizations that will continue working remotely indefinitely. For these select few, it seems, the risk of exposure is too high and the benefit to co-location too low to warrant a return in force. On the other end of the spectrum, some organizations are considering permanent modifications to the footprint to ensure that employees maintain the recommended physical spacing. For these, the outlay of capital and subsequent risk of infection is worth the investment. Most organizations lie somewhere in between—grappling with how many people should return to a workplace that has been inexpensively modified to accommodate an indefinite period of working under slightly distant conditions.
Regardless of the approach, many organizations are considering a two-week trial period where representatives from Shared Services, including CRE and Facilities, ensure safe operations prior to the return of the first wave of employees.
“The workplace of the future might look more like a destination for team interactions. A place for on-sites.”
Trajectory of Recovery and Day One: The Return to Work(place)
Regardless of when the workforce returns to the workplace, there are several hurdles to clear in order to get people back into a safe, stable, proximal, and productive operating environment. A measured response includes consideration for the following factors:
- Workforce Planning and Transportation – understanding who will be on-site when and the means by which people will travel to get there.
- Physical Environment – spacing between seats in both open and closed environments, entry/egress, circulation routes, choke points, social spaces, and surface contact.
- Operational Procedures – protocols, procedures, and signage regarding seating, sanitation, and shared services. Elimination of weak links.
- Individual Hygiene and Well-Being – access to personal protective equipment and sanitizer, dedicated devices, indoor air quality, movement, and exposure to outdoors.
- Psychological Safety – support for comfort, grief, and emotional distress.
- Social Norms – social distancing comes to work. No hugs, handshakes, or high-fives.
To combat the risk of spread, CREs have generally aligned on a number of tactics, including:
CONTROLLING THE EXPOSED POPULATION
- Virtual Workplace – Remaining physically distant and digitally present is the most effective means of limiting the transmission of the disease and starving the virus.
- Attendant Workforce Planning – Understanding which job functions demand physical presence and proximity and enabling those people to return in a phased manner underscores the need to determine which functions are “Essential.” Sick people should not report to work under any circumstances.
- No Visitors Allowed – Preventing visitors from entry onto the premises reduces both the total population and the variability within the population.
- Public Transportation – The population dependent on public transportation bears perhaps the greatest risk of exposure. As evidenced by the data, urban cores pose the highest likelihood of presenting as epicenters.
- Phased Arrival/Departure – Sequencing arrivals and departures of the attendant population might minimize the risk of contamination through unintentional interaction.
- Health Screenings Upon Arrival – Temperature checks and brief general inspections for every individual entering the premises.
- Vertical Circulation – Poses a high degree of risk due interaction with surfaces like handrails or elevator buttons and nature of confined spaces. Should be avoided if at all possible.
- One-Way Circulation – Mandating circulation pathways decreases the likelihood of crossing paths. Additionally, wider circulation paths should be encouraged, and pinch-points addressed.
- Social Distancing – Limiting or outright closing of social centers including cafeterias, break areas, common areas, gyms, rec centers, etc. reduces overall exposure and decreases the likelihood of singular carriers interacting with multiple healthy individuals.
- Social Spacing – Maintaining 6-feet or ideally more separation at all times from all other individuals reduces the risk of airborne transmission. Individual work areas should be modified to match.
- Outside Air – Though there is scant evidence to suggest that coronavirus can be transmitted via re-circulated air, increasing the percentage of outside air and considering the inclusion of HEPA filters in the mechanical air system are generally positive ideas. Some studies indicate UV Lighting can also eliminate the virus.
“Psychological safety is of the utmost concern. I am very interested in learning how others are incorporating ‘fear management’ into their change management efforts.”
ADDRESSING COMMON CONTACT POINTS
- Contactless Access – Minimizing or eliminating the need for people to physically touch common surfaces like doors, transaction registers, security access points, etc. reduces the degree of exposure each person man face.
- Public Restrooms – Minimizing touch surfaces and implementing frequent and thorough cleaning schedules help reduce the great risk of shared exposure in these spaces.
- Nourishment – Water coolers, cantinas, etc. that present common and frequent interaction points for people should be reconsidered.
- Shared Services – Printing, copying, scanning, etc. should be reduced or completed following strict sanitation procedures.
- Sanitation – Frequent sanitation of all common spaces should be performed to reduce the risk of spread via surface-bound contaminants.
PROMOTING PERSONAL RESPONSIBILITY
- Mask and Gloves – Wearing a mask and gloves reduces (but does not eliminate) the likelihood of an individual contaminating others. Similarly, this equipment might reduce personal exposure from others. However, personal equipment does not guarantee risks are mitigated.
- Personal Sanitation – Frequent and thorough cleaning of all surfaces that everyone contacts is both a personal and a shared responsibility.
A variety of resources exist to help CREs plan through this period. Cushman and Wakefield, for instance, has produced an exceptionally detailed report – Recovery Readiness: A How-to Guide for Reopening Your Workplace (Cushman and Wakefield, 04.27.2020). It is important to emphasize, however, that no checklist can capture the specificity and nuance of each organization. There is hard work ahead of every CRE and there are partners with expertise in sanitation, security, design and strategy to provide support.
The New Normal
The coronavirus pandemic is a watershed event. Just as Millennials’ entry into the workplace coincided with the Great Recession, most of the next generation (Gen Z) will never know a pre-pandemic workplace. When asked how the workforce will be distributed in the future in response to this event, CREs indicated that as much as 25% of the population would remain remote. Compared to the 3% noted in the 2017 Census Bureau report, that is a profound shift that will likely restructure both the labor market and the workplace forever.
The degree to which our space will be forever shaped by the pandemic depends upon the severity of our response. If the pendulum swings too far and we “pandemic proof” the workplace, there is the risk of over-investing in a safe but costly solution that is over-sized, under-utilized, empty, and austere. Doing so would erode the workplace gains of the last decade. On the other hand, under-estimating the virus could result in even more costly and irreversible outcomes. This is the career-defining challenge at hand. There are no easy answers, no checklists, no silver bullets.
Our collective memory will linger long after this period has passed. The billions who have lived and worked through this event have learned a host of new skills, tools, and workflows. Old paradigms will fall. Millions of workers have already been displaced by the pandemic. Some will remain remote indefinitely, having proven that remote work can be effective. Others will invariably return to the workplace. Still others will be forced to seek new employment. Regardless, the composition of the workforce will change, and corporate real estate will be challenged as before, to foster the collective identity and productivity of a dispersed workforce.
As humans, we thrive when we are connected—to a mission, to a cause, to a place, to each other. The workplace matters because it facilitates those connections. As such, the workplace will never go away. It will also never be the same.
“The conclusion I’m beginning to form is that we need what we’ve always needed. Generally folks aren’t lobbying to be always home or always in the office. They’re asking for choice and flexibility to be where they need to be when they need to be there. To be trusted to know the difference. To have the tools to team well no matter where they are working on a given day. In some ways, nothing has changed.”