I truly think it’s just the corporate real estate thing. Those 80% that regret return to office are CEOs that weighed the loss from real estate contracts against the blowback from forcing employees back to office, and they are saying that they feel they made the wrong decision.
I might argue this statistic also shows that 80% of CEOs underestimate the value of their employees. Not exactly a hot take in 2023, but it’s fun to put a number to it.
Unless your or the company’s portfolio has lots of commercial real estate securites. The commercial real estate and the financial securities behind them are in a bubble and there is a fear it could pop like it was 2007 with the mortgage securities. That was the fear behind it. And many cities had mayors pushing for a return to office because the downtowns were threatened.
Most of this comes from the C-level execs being “inbred.” Meaning many C-level execs sit as board members on other companies. These guys are all trying to scratch each others’ backs.
I guess it’s possible. It just seems a reach for people to think that’s the /only/ reason.
Honestly. I think people would be more successful if they actually tried to understand some of the nuance and understand what things are better in person than remote. Then try to solve for those things, rather than just saying “remote is better in every way” like everyone seems to think.
That’s going to be highly dependent on the work done and the structure of the company. Even then, it is also about demonstrating power. I work in IT where our datacenters are in different states, and we work more and more with cloud infrastructure. Even when I’m in the office I’m working remotely. We don’t see clients. Our teams are scattered across the country, hell my manager lives in another state. So even in the office the people part of it is still done remotely. There is zero reason to be in the office for us.
If you have an unutilized asset, there’s pressure to get rid of it for the cost savings.
If you sell your asset at a loss, it looks bad for you and the company. Same for paying cancelation fees.
If you legitimately think that you’re going to need that space in the future, for example because you think that we’ll find an equilibrium between “everyone work from office” and where we are now, and that we’re trending towards an organic level of office need/desire higher than we’re at now, you might see selling now as the first step to needing to buy again later, likely for higher than you sold for. So you try to “mandate” the equilibrium that you expect so you’re not in a position to have to explain why you’re holding onto a dead and losing value property.
Executives spend a lot of time talking to people and having meetings. The job selects for people who thrive on and value face to face communication. Naturally, they overestimate how much that social aspect of the job is true for everyone else, so they estimate that the equilibrium will have a lot more office time than other people would.
To make it worse, the more power you have to influence that decision, the more likely you are to have a similar bias.
This isn’t an excuse of course, since you can overcome that bias simply by telling teams to discuss what their ideal working arrangement would be, and then running a survey. Now you have data, and you can use it to try to scale offices to what you actually want.
I truly think it’s just the corporate real estate thing. Those 80% that regret return to office are CEOs that weighed the loss from real estate contracts against the blowback from forcing employees back to office, and they are saying that they feel they made the wrong decision.
I might argue this statistic also shows that 80% of CEOs underestimate the value of their employees. Not exactly a hot take in 2023, but it’s fun to put a number to it.
I dont understand this real estate thing. Cancelling contracts or having empty space is still cheaper than everyone back in the office.
More people in the office means more maintenance, more snacks, more hvac needs, etc.
Unless your or the company’s portfolio has lots of commercial real estate securites. The commercial real estate and the financial securities behind them are in a bubble and there is a fear it could pop like it was 2007 with the mortgage securities. That was the fear behind it. And many cities had mayors pushing for a return to office because the downtowns were threatened.
Most of this comes from the C-level execs being “inbred.” Meaning many C-level execs sit as board members on other companies. These guys are all trying to scratch each others’ backs.
…with affordable housing. The horror!
I guess it’s possible. It just seems a reach for people to think that’s the /only/ reason.
Honestly. I think people would be more successful if they actually tried to understand some of the nuance and understand what things are better in person than remote. Then try to solve for those things, rather than just saying “remote is better in every way” like everyone seems to think.
That’s going to be highly dependent on the work done and the structure of the company. Even then, it is also about demonstrating power. I work in IT where our datacenters are in different states, and we work more and more with cloud infrastructure. Even when I’m in the office I’m working remotely. We don’t see clients. Our teams are scattered across the country, hell my manager lives in another state. So even in the office the people part of it is still done remotely. There is zero reason to be in the office for us.
Totally fair in many environments for sure.
If you have an unutilized asset, there’s pressure to get rid of it for the cost savings.
If you sell your asset at a loss, it looks bad for you and the company. Same for paying cancelation fees.
If you legitimately think that you’re going to need that space in the future, for example because you think that we’ll find an equilibrium between “everyone work from office” and where we are now, and that we’re trending towards an organic level of office need/desire higher than we’re at now, you might see selling now as the first step to needing to buy again later, likely for higher than you sold for. So you try to “mandate” the equilibrium that you expect so you’re not in a position to have to explain why you’re holding onto a dead and losing value property.
Executives spend a lot of time talking to people and having meetings. The job selects for people who thrive on and value face to face communication. Naturally, they overestimate how much that social aspect of the job is true for everyone else, so they estimate that the equilibrium will have a lot more office time than other people would.
To make it worse, the more power you have to influence that decision, the more likely you are to have a similar bias.
This isn’t an excuse of course, since you can overcome that bias simply by telling teams to discuss what their ideal working arrangement would be, and then running a survey. Now you have data, and you can use it to try to scale offices to what you actually want.