Returning to the office amidst a recession and other bad ideas
As businesses gear up for a probable recession, we’re asking ourselves why any company would mandate a return to the office and cling to fixed costs. Some companies quickly recognized the opportunity to downsize when the coronavirus hit in 2020, including Pinterest when it decided to pay a one-time fee of $89.5 million to cancel a lease in San Francisco.
“As we analyze how our workplace will change in a post-COVID world, we are specifically rethinking where future employees could be based,”
Yelp followed suit this year, citing low-employee attendance at its offices and recognition that “the future of work at Yelp is remote” wrote CEO Jeremy Stoppelman in an open letter.
“But what about Tesla?” you may be thinking. Didn’t Elon Musk just put out an ultimatum to his employees to come back to the office five days a week? Unfortunately, yes, that’s true. And while we think there will always be outliers, we believe that companies offering flexibility and freedom will win out in the long run.
No matter a CEO’s philosophy around remote work, office leases are a huge fixed cost and an opportunity to increase a company’s agility, which is necessary in a recession.
In an uncertain economy, why would any forward-thinking CEO cling to fixed costs?
Harvard Business Review has a few ideas on this, which we’ve recapped here — but ultimately we think that it comes down to ego and getting stuck in the sunk-cost fallacy.
Remote work has proved again and again to meet or beat at-office work productivity, so it can’t be the excuse that employees aren’t actually working from home. No, we think it’s a desperate attempt to cling to the old ways of doing things - either because their egos are too big to admit they need to change their strategies, or because they’re so wrapped up in their sunk costs that they are incentivized to pretend that the old normal is coming back.
Instead of signing another 10-year corporate office lease and mandating employees to return, what if companies could downsize their real estate investment and put those dollars into:
Reducing customer costs
Investing in innovation
Providing their employees with pay raises
Binary Thinking
We believe that some leaders are still thinking in binary ways when it comes to the office: that it’s the central office vs WFH. There still seems to be a belief that if the traditional office is given up, it means that their employees will never see each other in person again and will be relegated to an isolated existence in their homes.
Well, we have some good news for leaders at this crossroads — Radious brings the best of both worlds: the in-person collaboration of the office, and the convenience and cost-savings of WFH. This kind of flexibility can help you reduce costs, increase flexibility, provide opportunities for your employees to meet when they need to, and give you a competitive edge.
Radious provides flexible and on-demand office and meeting spaces right in your employees’ neighborhoods. We’re making it easy for teams to meet when and where they want. As our CEO, Amina Moreau, recently said,
“Between pandemics, wars, mass resignations, inflation, market turbulence, and an ever-changing remote/hybrid landscape, agility is a competitive advantage.”
Not to mention, with gas prices at a record high, inflation pushing food prices higher, and the overall cost of living skyrocketing, employees are feeling the brunt of these decisions first and worst. And while remote work may not reduce productivity (quite the opposite, check the link above), we certainly know that employee dissatisfaction does.
So where will your company end up amidst all of this change?
Download our sample employee survey.
We’ve designed a survey for business leaders as an easy way to get started. This 8 question survey is designed to be short, sweet, and provide valuable feedback regarding what your employees think and feel about returning to an in-person option and staying remote.
Written by Cassidy Johnston