The coronavirus pandemic has been a major disruptor to the employment environment in virtually every industry.
Within a very short period of time, we moved from the lowest unemployment figures in 50 years to millions of people out of work. Moreover, in order to comply with social distancing mandates, many companies asked their employees to shift from reporting to an office building each day to working out of their homes.
While the commercial real estate industry’s unemployment figures are typically lower than overall national statistics, commercial real estate was still significantly affected by the economic shutdown and the transition to working from home. These factors undoubtedly impacted the way commercial real estate firms and their teams view the hiring landscape and remote working.
Now, as we face a second wave of this pandemic, employers are seeking advice on how to approach the remainder of 2020.
As a real estate executive search firm, RETS Associates recently conducted a survey of commercial real estate professionals to gather data on their work-from-home experience over the last several months. Based on the survey results and our depth of experience in working with real estate companies, RETS recommends the following hiring and office management strategies for commercial real estate employers in the months ahead.
Give employees the option to continue working from home, at least occasionally
Of the commercial real estate workers surveyed, 93.7 percent said their employer instituted a work-from-home policy during the COVID-19 shutdown. While most respondents (72.9 percent) said they would like to work from home sometimes, only 55.2 percent said their company plans to continue allowing them to do so. The remaining companies may want to rethink this.
While it may seem as though employers have the upper hand in a job market where millions of people have filed for unemployment benefits, the market is improving rapidly. According to the Bureau of Labor Statistics, in June the unemployment rate declined by 2.2 percentage points to 11.1 percent, and the number of unemployed persons fell by 3.2 million. As the economy ramps up, the hiring landscape becomes less of an employers’ market and more in favor of employees—which means offering employees what they want becomes more important in terms of hiring and retaining top talent.
Rethink negative assumptions about productivity and remote working
Many commercial real estate employers are reluctant to allow employees to work from home because they are concerned that productivity will decrease without the structure of the office environment. However, when the pandemic forced a large section of the workforce to work from home, in most cases productivity did not decrease.
RETS’ survey revealed that 66.9 percent of respondents were at least as productive working from home as they were in the office—with 22.9 percent saying they were much more productive. Only 8.3 percent of respondents said they were much less productive working from home.
Commercial real estate firms who recognize that their team can be just as productive occasionally working from home will be better positioned to handle the imminent second wave of the pandemic—which may require companies to extend work-from-home policies—while providing a much-desired option for team members.
Think twice before decreasing the office footprint
Even though COVID-19 has created some concern about potentially rising office vacancy, experts are predicting that companies may need the same amount of space, if not more, as before the pandemic, for a couple of reasons.
First, there’s a growing trend toward a “hub and spoke” model, whereby companies occupy a central office, as well as several smaller offices nearby. This model allows firms to decrease density in the workplace, reducing the potential spread of germs, while keeping team members onboard.
In addition, while employees may be working from home more now and in the future, the office remains a vital place to set the tone for a company culture, and to establish a firm in the minds of potential talent. In fact, of the commercial real estate employees RETS surveyed, the overwhelming majority (82.2 percent) of respondents said it was either very important or somewhat important to have a physical office to work in on a regular basis. This indicates that most commercial real estate employees would like the flexibility to work either from home or in a physical office on a regular basis.
Even with office attendance currently in flux, there are many indications that commercial real estate firms will need to maintain their office footprints as we move through and past the pandemic.
Take a proactive approach to hiring.
Now is the time for commercial real estate companies to make sure they have the right team in place to thrive in the upcoming recovery. It’s a mistake to wait, thinking that in a few months the job market will be filled with candidates eager to accept an offer for less than they were making before the pandemic.
When candidates accept offers for less than their worth, they typically continue to search for something more aligned with their previous salary and responsibilities. This means a new hire may jump at the next higher offer, which leaves companies needing to refill positions quickly—resulting in increased costs and lost opportunities.
A wiser strategy is to explore the playing field early, making connections and engaging with candidates now, while top talent is still considering their options. This gives commercial real estate employers an opportunity to find a middle ground in salary and benefits that will work for both the employer and the talent they wish to attract.
While COVID-19 profoundly changed attitudes about working from home and going into the office, there is an opportunity for commercial real estate firms to make adjustments now in preparation for an imminent second wave.
Commercial real estate firms that offer employees the option of working from home, rethink negative assumptions about productivity and remote working, maintain their office footprint and take a proactive approach to hiring will find themselves ahead of the game once the pandemic has passed and the economy and industry are restored to full swing.
Jana Turner serves as principal of RETS Associates, a national real estate executive search firm. She can be reached at [email protected]