Work-from-home away from home: outlook on a hybrid future
Checks and Balances
The traditional office has been steeply declining, a trend accelerated by the COVID-19 pandemic. The shift to work from home was a revolutionary change from the daily grind of commuting and cubicles into a world of flexibility and autonomy for employees. The high lease and maintenance expenses seem to go to waste due to growing underutilization, resulting in businesses eagerly cutting costs. However, whether this enthusiasm is long-lived is far from certain. Workers from home are not more productive (although they claim they are), the effect on job promotion and raises is negative, satisfaction with the physical workplace is higher at the on-site office, and work-life boundaries are getting blurred. The long-term effects on the mental and physical health of working from smaller homes with family members present during office hours are unclear. The willingness to commute, however, remains at an all-time low (Figure 1, bottom). Commuting has been a consistent driver of the willingness to work from home. The further you live from the office, the more you want to work from home. As a matter of fact, the demand to work-from-home could be mislabelled as a desire to stay home, when it might actually reflect a desire to not commute or relocate to a distant office. Are employers correctly predicting the needs and wants of their (future) workforce? How could or should employers and employees adapt if this assessment turns out to be correct?
Age of the Amenities
The pandemic has instigated a complete mental overhaul of how we perceive the office. Instead of assuming employees will be in the office by default, employers now deal with the matter of preference: do employees want to come to the office? Many companies now struggle to get employees in, catering to the high standards they set for the modern, high-end, green, healthy, and attractive workplace (often referred to as the hotelisation of the office sector). This rise in demand for premium offices, or flight-to-quality, has been argued to lower susceptibility to the decreased demand for offices compared to low-quality properties (although the causality has been questioned). As the preference for the work location tilts even more towards the employees, the importance of amenities will undoubtedly be decisive in the further emergence and success of the hybrid office paradigm. Employees are very willing to pay (or forgo compensation) for wellbeing-promoting amenities such as fitness centers, childcare facilities, quality cafeterias, healthy indoor environments, and green spaces. However, facilitating and adapting to the diverse, high-end, and fast-changing preferences of all employees may be an uphill battle.
Figure 1. Global Survey of Working Arrangements 2023
source: WFHResearch.com
Redefining Hybrid Home Work
What else can companies do to facilitate this change in employee preference? Most frontrunners are taking it upon themselves to redesign their office to facilitate hybrid work: some time is spent at home, some at the office (Figure 2, left). Workspaces previously fixed are now flexibly available for all employees present at any time. Since much of the time spent at the office will now focus on face-to-face meetings and cooperation, more surface area can be dedicated to facilitating work-related activities at the cost of the desk-per-employee ratio. By doing so, they aspire to motivate workers to spend at least some days a week in the office. This hybrid composition is currently the main answer to the homework demand: as of 2023, 12.7% of full-time employees work from home, while 28.2% work in this hybrid model. Nevertheless, in this format, the tug-of-war between an attractive office and commuting remains.
Hybrid could also refer to an alternative concept: instead of a mixture of time spent at the office and home, it could be a mixture of (physical and locational) office and home advantages (Figure 2, right). For example, a satellite office, a collection of fixed office spaces acquired or leased by a company, allows for more flexibility regarding location and leasing contracts to combat uncertain peak occupancy in the future for the employer. Companies can opt-in, instead of redesigning, segmented workspaces that offer high-end amenities, health and wellbeing support, and flexible workspace facilities. Smaller workspaces with shorter leases further allow for more swift adaptation to (future) volatile demands of the workforce. They additionally retain the benefits a classic physical office offers like organized cooperation and meetings as they are managed by the employer. Although this might improve the commute for some employees, the fixed nature of a satellite office limits the commuting gain for all.
Figure 2. Hybrid Work Framework
source: author
Work-from-Home away from Home
One step further is the mature sibling of the ‘digital nomad’ (highly popular amongst the new generations: 40 million nomads in 2024): the hybrid office allows for complete discretion for the employee on where to ‘work-from-home’. This working-from-home away from home promotes autonomy and mobility to the employees without involuntary commute, offering the optimal environment to perform for the company. This option includes all benefits mentioned for both the office and home (as stated in Figure 1), whilst only compromising face-to-face collaboration at the office and spending time with family at home. For example, employees could command a budget, similar to leasing a company car, to lease short-term co-working or flex spaces close to their desired workspace that matches their personal preferences. This provides freedom to decide where to work, to alternate locations, and to choose the office amenities to match their personal desires. High-end upgrades would directly depend on the willingness to pay for the employee – and they are willing to pay! In 96% of the US cities hybrid offices appear more affordable than office leasing in 10-person teams. Business models where companies have discounted workspace partners meeting company requirements are likely to follow, stimulating (perceived) self-selected clustering of employees. Now, the responsibility (and part of the costs) for adapting to the volatile needs no longer resides with the employer, but with the employee itself.
Future outlook
The main office, satellite, hybrid, and home workspaces attempt to complement or offset the growing demands of the employees to cut commutes and increase quality amenities. A future with rigid requirements to expect employees to be around or move to the physical vicinity of the main office will severely limit access to talent. On the other hand, the willingness to work from home might actually be a willingness to not work from the office. Dissatisfied employees preferred to work from home, and satisfied employees preferred to work-from-home away from home (still not in the office though). In order to facilitate these evolving demands and attract talent who might prefer out-of-home work, a hybrid version is likely.
Instead of a combination of the office and home, transferring responsibility and decisional discretion to employees could be a sustainable solution, without sacrificing productivity expectations. The hybrid office could spur the emergence of workspace hubs in both urban as well as green (well-connected) areas: although they currently only account for 1.7% of the US office inventory, they are projected to to grow to $96.77 billion by 2030. Positive spillovers on professional networking, urban planning, and the housing market already associated with remote work, would further expand.
Time will tell whether the hybrid office truly is a viable new office paradigm that will survive the current revolution. Nevertheless, it might be smart to anticipate the true preference of the workforce to ‘work-from-home’. The future of workspaces will need to be as dynamic and adaptable as the people who use them.
