We recently ran a research programme, to understand what the ‘new normal’ means for high-growth companies. We interviewed a dozen mid-sized company CEO’s asking them about how COVID-19 had impacted their businesses and markets. The most interesting insights were regarding a workplace revolution. Clear patterns emerged of how talent & workplace strategies for companies are radically changing.

Our key take-away is that mid-size, service-based companies are facing a workplace revolution, as a result of COVID-19, based on the mix of talent in their workforce. Specifically, based on an age divide, approximately corresponding to the generation cohort cut-off between Gen X, and millennials (i.e. early to mid-30’s). The relative mix of these 2 key types of workers is deciding how companies arrange workspace practices going forward:

Cohort 1. City-dwelling Millennials

• Live in smaller flats, including flat shares
• Live closer to city centre, so can walk or cycle to work
• Don’t have children
• Enjoy work partly for the social connection and social life it provides

Cohort 2. Suburban and rural Gen X

• Live in ‘the regions’ (i.e. suburbs, towns and the countryside)
• Live in larger houses, with own home office
• Have a longer commute (60-90 minutes)
• Have children at home
• Enjoy work for the professional fulfilment it provides

The impact of remote working on these 2 groups is quite different. For the younger cohort it is a struggle, without the space to work effectively from home, and missing the social contact of work, so they are keen to get back to the office. For the older cohort, the main challenge of home working has been childcare. Other than that, there have been advantages to working from home, particularly saving them an uncomfortable commute, and timesaving.

Emerging Models

Based on the mix of the people in a team, companies are responding in two general ways, with two models emerging for the ‘new normal’ team:

Fully remote

For teams where the majority of staff are from cohort two, full remote working is now a serious option, and many are planning to close their offices for good. Take, Pearn Kandola, a team of highly educated, experienced psychologists, based in Oxford, who provide diversity and inclusivity training to large organisations. The majority of the team are in cohort two, so management is committing to making the business fully virtual, closing the office for good. This approach brings advantages and challenges:

Advantages:

• These teams talk about improved opportunity for communication, because without the disruption of travel, they can maintain consistent communication rhythms.
• Without constraints of geography, they can recruit from a global talent pool, such as Eastern Europe and Asia.
• This approach can tie in with a strategy for virtual service provision to customers, which brings significant efficiency improvements.

Challenges:

• Team bonding, without regular face to face contact. Some people just like to see each other physically. Needs to be addressed with a mix of virtual social activities, and regular team meet-ups.
• Dealing with team members who don’t have space at home for an office, such as by providing hot-desk solutions in shared office spaces.

The fact is that many companies have been remote for years. For example, the world-leading website conversion team Conversion Rate Experts – also based regionally – Staffordshire, and with a team or relatively mature professionals – have been a fully remote team from day one. COVID-19 has been the spur for others with the right team profile to follow their lead. At Petra Coach Europe we’ve always been fully remote. It really works.

Mixed remote / office

Teams that have a mix of both cohorts have to find a way to bridge the gap. They’re keen to get back to the office, and also need to cater to the different needs of the two groups. What is emerging is a ‘flexi-model’ whereby staff who need or want to return to regular use of the office do so, but those who don’t, have the option of reduced office working.

For example, Tictrac, a central-London based digital health app, are maintaining their office, and encouraging increased home working for those that want to want to. This also allows them more space, in order to enforce social distancing within the office. This approach also has advantages and challenges:

Advantages

• Able to attract and retain staff from different demographic groups.
• Enhanced social bonding within the team.
• Particularly beneficial for intensive creative processes and development.

Disadvantages

• Development of ‘them and us’ groups within the team; cliques and silos.
• Maintaining the cost base of an office.
• Risk of COVID-19 transmission within team.

What does this mean for the future of offices?

Based on these identified trends, what might this mean for the future? How will these trends play out in the wider market? Here are our predictions, based on the research we have conducted:

Big cities centres will not fade

There has been discussion and debate on the future of cities. Based on the trends identified here, city centres will rebound, driven by a youthful workforce. Yes, the middle-age crusties will be less in evidence, but the young, fun culture will bounce right back. In some ways it may be even more compelling, a little less crowded, and maybe more affordable?

Regional Business parks will need to adapt

Commercial office space is clearly going to be significantly impacted by COVID-19, but regional business parks likely more so than city central ones. They may have to adapt more to co-working for local individuals that do not have a home office, and away from tenants such as professional services firms. 

Travel patterns will change

If home working for middle-aged professionals increases, this will affect patterns of commuting, which won’t go back to quite what it was.

Home offices will continue to evolve

Those with home offices will continue to invest in them, including furniture, decoration, and equipment. Companies may have to get more involved in the procurement, design, and layout of these home offices, to ensure a consistent and safe working environment for all team members. The value of houses with a good home office space will be strengthened, and house building patterns will change.

Office layouts will change

For the offices that continue, there will be an enhanced emphasis on flexibility, as they will have to adapt to a workforce where a significant number of people are coming in just for occasional meetings and hot-desking. This may mean fewer, larger desks, and more meeting rooms.

What do you think? We’d love to hear from more companies who are facing a similar workplace revolution and coming up with their solutions. COVID-19 has been super disruptive, but it does also present opportunities for doing things better, such as improving efficiency by eliminating unnecessary travel, and allowing people to work in ways that better suit the rhythms of their lives.