With the entire economy disrupted and remote work on the rise, corporate location strategy is being redefined in the wake of the COVID-19 pandemic.
It’s an understatement to say that location is critical to a company’s success. There’s a reason why “location, location, location” is the real estate industry’s mantra — location truly is everything, particularly when it comes to creating the conditions of possibility for realizing a specific business strategy. In the business world, location and strategy are inextricably intertwined, as a company’s location determines its access to employees, customers, transportation, materials, and more.
Of course, strategies — and the considerations that come with them — differ wildly across industries, as some businesses may need to be located near a major airport, while others may require abundant space for large manufacturing or storage facilities. Regardless of an organization’s unique needs, selecting and developing a location is both time- and cost-intensive — and there’s little room for mistakes.
What’s more, as the COVID-19 pandemic has caused supply chains to evolve, social distancing to become the norm, and remote work to become nearly universal in many industries, the old playbook for location strategy has been all but tossed out the window. With an uptick in onshoring and declining demand for commercial real estate — especially in high-cost markets like Manhattan — organizations’ site selection strategies are being forced to undergo a radical transformation.
In the wake of the COVID-19 pandemic, companies have two new leading priorities: keeping employees safe from infection and ensuring operations can continue if future lockdowns occur. As a result, it’s likely that corporate real estate planning and management will look much different moving forward than they have in the past. Three aspects of corporate location strategy that will need increased consideration include:
1. How Much Office Space Is Needed
Space is already becoming a huge question as companies move toward returning to their offices in many parts of the country. On the one hand, many companies have discovered that remote work is not only effective, but, for many employees, preferable. Google, Facebook, Microsoft, and Instagram have all told their employees to expect to work remotely until 2021, and Twitter has gone so far as to tell employees they can work remotely indefinitely.
On the other hand, if and when employees do return to the office, physical distancing measures will almost certainly need to be in place, potentially making the open floor plan office a relic. Companies that haven’t adapted to remote work as smoothly as Twitter or Google have may end up needing more space, not less, in order to facilitate their employees’ adherence to social distancing guidelines.
2. How to Utilize Space
Irrespective of how well they have adapted to remote work, every company will have to reckon with how to properly utilize their office space moving forward. Even companies that opt to go fully remote will likely need to preserve some office space for important meetings and collaborative projects, and those spaces will need to be rearranged to reflect their new purposes.
What’s more, the locations of these spaces should not be chosen based solely on former ease of access, as primarily remote employees will likely move away from choosing residences based on an office they rarely have to visit in person. As a result, companies shifting to this model should favor major cities with accessible transportation hubs. Fortunately (from a budgetary standpoint), these part-time offices don’t need to be as large as offices that are expected to be used every day.
Companies that are planning to have their full workforce return to the office may need to space desks further apart or consider switching from an open floor plan to cubicles. The need for more space to accommodate these new layouts may push these companies to consider suburban or rural home bases to reduce their real estate costs.
3. How to Build a Smart, Safe Office
Data analytics and smart technologies are likely to play an essential role in preventing the spread of COVID-19 as employees return to physical workspaces. Predictive maintenance, UV cleaners, HEPA air filters, and even body temperature cameras may become standard as preventing the spread of the virus becomes a leading priority in every office.
Moving forward, employers will need to have an increased awareness of how many employees are in the office at any given time, the health of those employees, and where in the office they’re physically located. Smart technologies can help companies keep workers safe and healthy while continuing to utilize space effectively.
Forging Ahead Together
Organizations that are looking ahead to their return-to-office — or to their transition to long-term remote work — will need to consider more than just their square footage needs (or lack thereof). Whatever it ends up looking like, adjusting to the new normal will require many organizations to engage in adept change management, evolve their data governance regimes, undergo agile transformations of their technological infrastructures, and more.
Doing so — particularly amidst a global pandemic — can be incredibly difficult, which is why organizations of all kinds would be well-advised to work with a committed partner like SEI. Our seasoned consultants have worked through trying times before, and we have the expertise to help organizations of all kinds refine — or completely overhaul — their location strategies in the wake of the COVID-19 pandemic.
Reach out today to learn more about how SEI can help guide your organization through these complex times.