Since late 2020, Australians have been going back into the office with numbers approaching pre-pandemic levels in some regions. A new survey of Australian workers identifies five workplace models being used: as it was, clubhouse, activity-based working, hub and spoke, and fully virtual. The author explores how companies might weigh this decision now that vaccines are increasingly available and restrictions are being relaxed in many countries.
In March of 2020, most companies would have seen their offices as essential to their business. But as the pandemic dragged on, leaders have been surprised to learn that people often work just as productively from home.
Now that vaccines are becoming available and social distancing restrictions are being relaxed in some regions, leaders need to decide whether to bring employees back to the office, remain at home, or use this as an opportunity to adopt a new, possibly more beneficial workplace model.
Where employees work has significant implications, not only for the design of workplaces, but for how corporations allocate capital and manage staff. Experts are divided on what is likely to happen next. Some argue that our experiment with working from home has been so successful that remote work is here to stay. Others speculate that people are starving for face-to-face interaction, and that central business districts are primed to come roaring back. Splitting the difference, another group believes that the future of work won’t be either of these two extremes, but a hybrid solution between home and the office.
We’ve already seen these dynamics play out in Australia, where companies have grappled with returning to the workplace after a largely successful effort to control the virus, providing an early indication of how businesses in other countries are likely to adjust their workplaces after the pandemic.
The Future is Already Here
To help get a clearer picture of the future of the office, I recently surveyed 1,600 Australian office workers and interviewed a number of business leaders and workplace experts in the country. Australia is an important case study; rather than waiting for the vaccine, the country has largely controlled the virus by closing its border to non-residents, limiting interstate travel, imposing stay-at-home orders, and conducting extensive contract tracing on any outbreaks.
In October 2020, as parts of the country were coming out of a strict, months-long lockdown, only 7% of employees in Melbourne, the nation’s hardest-hit city, were back at the office, according to the Property Council of Australia. By April, more than 41% had returned. In cities less affected by the pandemic, such as Perth and Adelaide, occupancy numbers are at 70%, just below pre-pandemic levels. Outbreaks still occasionally occur, prompting temporary restrictions from the government, and the border remains closed, but for the most part Australians are free to eat indoors, gather at large sports events, and return to the workplace. As people adjust to life without the threat of the pandemic, the situation provides an early indication of where people in other countries are hopefully headed.
Interestingly, companies in Australia aren’t all converging on the same workplace model. After a year of upheaval, some employers report that their employees are suffering from change fatigue and just want the comfort of a familiar office. This is part of the reason why office occupancy numbers climbed so quickly after the lockdowns ended. Others see the end of stay-at-home orders as a catalyst to try something new. The Australian software giant Atlassian recently announced that employees would only need to come into the office four times a year. In my conversations with business leaders and workplace strategists in the country, the models that they were using or considering typically fell into five categories:
- As it was: Employees return to the office and resume a regular nine-to-five routine. The office might be a bit more hygienic and flexible, but mostly this is the centralized office as it was before the pandemic.
- Clubhouse: A hybrid model where employees visit the office when they need to collaborate and return home to do their focused work. The office serves as a social hub — the place people go to meet, socialize, and work together.
- Activity-based working: Employees work from an office but don’t have an assigned desk. Instead, they spend their day moving between a variety of workspaces, such as meeting rooms, phone booths, hot desks, and lounges. Prior to the pandemic, most Australian activity-based offices had approximately eight desks for every 10 people (since people often worked elsewhere in the office). After the pandemic, firms are looking to shrink this as low as five desks between 10 people, anticipating that many of their employees will be out of the office, working from home a couple of days per week.
- Hub and spoke: Rather than traveling to a large office in the central business district, employees work from smaller satellite offices in the suburbs and neighborhoods closer to where they live. This saves them the commute to a central office while still providing the benefits of face-to-face interaction with colleagues.
- Fully virtual: Employees work from home — or anywhere else they like — allowing companies to ditch expensive leases and build on what they started during the pandemic.
None of these workplace models are necessarily new. Even reasonably radical workplace concepts, such as virtual offices, were tried and tested long before the pandemic. Major technology companies such as Yahoo!, IBM, and HP all experimented with allowing employees to work entirely remotely prior to the pandemic. The advertising agency Chiat/Day unsuccessfully attempted to adopt activity-based working back in 1993.
While some companies dabbled with these models prior to the pandemic, most were unwilling to try them. Today there’s almost an expectation that companies will try something different. JPMorgan CEO Jamie Dimon was recently criticized for announcing his plans to bring employees back to the office largely as it was and cancel all his Zoom meetings. Most business leaders I spoke to faced an unfamiliar decision, weighing an abundance of seemingly viable workplace models that most weren’t necessarily familiar with until now.
Weighing the Options
Each model involves its own set of tradeoffs. Activity-based working saves space but involves a significant cultural transformation. The hub-and-spoke model sounds logical, except it involves dividing a workforce not by project or job function but by geographic location. And returning to the office “as it was” is a comforting notion for many, but will only feel familiar if most people return. No matter what, it seems some degree of working from home will persist, meaning fewer people in the office, more remote phone calls, and nothing being quite “as it was.”
Employees themselves are split about what they want next. For Australian office workers, the most favored workplace models were the hybrid models that gave them the flexibility to work both at home and the office (clubhouse and activity-based working). At the other end of the spectrum, entirely remote work was the least popular option with less than 20% of people surveyed currently working from home full-time in Australia.
There were also significant demographic differences in what employees favored. Women were far more likely to value the flexibility of working both at home and the office than men. Managers were more likely to want to return to the office “as it was” than individual contributors. And young people were more open to remote work than older employees. These differences point to the danger leaders face in making workplace decisions without first gathering input from a range of stakeholders inside the company.
The Answer Lies Within
Leaders weighing these potential workplace options should look to their company’s purpose and strategy, as well as their employees’ preferences and work styles. A technology company paying a premium for offices in a tech hub and selling its product online may well choose to become fully virtual. But a small design firm that uses its office both as a showroom and a place of collaboration may prefer the clubhouse model. Whatever the case, firms need to be aware that what works for one company may not work for another.
The pandemic is far from over. Even in Australia, there are still outbreaks and lockdowns, and it seems unlikely the border will reopen completely before 2022. Given all of this, it may seem like a turbulent time to be making lasting changes to the workplace. Yet firms can’t afford to hesitate, because these decisions help define their path out of the pandemic. Depending on the local Covid situation, there may be setbacks and adjustments required. But like any strategic change, the success of adopting these models rests on the leadership team’s ability to choose a path forward and communicate the vision.
If there is one lesson learned about the workplace during the pandemic, perhaps it is not that working from home was better or worse than working from an office, but that each had its merits. In the future, it seems likely that firms won’t converge on a single workplace model but will instead go in many different directions as they seek out models that are tuned to their business needs. It’s possible that we’ll look back on the pre-pandemic workplace and think it was strange that offices were largely one-size-fits-all — that the headquarters of a legal firm, a newspaper, and a technology company could all look and operate much the same.