The Next Workplace Revolution
Telecommuting was supposed to change everything.
Powerful computers, video-conferencing and services like Skype would allow employees to work from home, and home could be anywhere. Traffic congestion would be reduced, and the traditional workplace model – and thus the office real estate market, in both urban and suburban locations -- would be transformed. A wired world was poised to change the way we think about cities.
The trend has indeed played out in an incremental way. The US Census Bureau reported that the number of Americans working from home soared 41 percent in the last decade, to 13.4 million. That’s 9.5 percent of all workers working from home at least one day per week as of 2010, up from 7 percent in 1999.
Yet the promised transformations never quite materialized. Innovation and collaboration and working with clients in the modern-day workplace requires face-to-face contact. As anyone who has worked from home knows, having kids around the home office is a challenge all its own. The very term telecommuting seems already outdated, like the earliest flip-open mobile phones.
There’s a new trend in the workplace, however, that really does seem poised to change corporate real estate: the rise of the mobile workforce. A growing number of employees don’t have the need to be in a cubicle at headquarters – but they are not staying at home, either. They are deciding where and when to meet with clients or fellow workers, as it suits their schedules, and employers are letting them do so.
"Employees are leaving work to get work done, and technology lets them. They have a phone and connectivity, and they are decoupled from the desk,” says Mark Gilbreath, founder and CEO of LiquidSpace, which coordinates "on demand" work spaces and meeting rooms nationwide.
Some of LiquidSpace's offerings.
Workers have for many years arranged to do business at "third places" like Starbucks amid nearly ubiquitous connectivity. But companies are formalizing the arrangement, reducing and even eliminating assigned offices or cubicles, and renting space in hotels and underutilized office spaces as needed. The consulting firm Accenture has moved 100 percent of its employees to this model, where workers book office space like booking a hotel room. Accordingly, hotel chains like Marriott are getting into the game, accommodating "co-working" and "community work club environments" so they are not just places to sleep, but to work, for professionals constantly on the go.
The exodus from the cubicle has been driven by various trends, beginning with recognition of greater productivity, creativity, and innovation when workers are set free. Employers are also looking for better efficiency in the bricks and mortar they inhabit. A study of corporate assets by Cisco showed that 60 percent of assigned desks or offices sit empty during the day. The average square feet needed per employee has dropped from 250 twenty years ago to 150 today. It’s 100 square feet in some corporate offices.
The workforce itself is changing in composition and character. A study by Intuit predicted that the number of "contingent" or freelance workers – those hired more on the consultant model for two days a week, for example, and who work for multiple masters – will rise from 20 million to 40 million by 2020.
So what does it all mean for the traditional corporate headquarters – and for cities?
On the whole, says Gilbreath, who participated in a panel called the Work-Life Revolution at the Meeting of the Minds in San Francisco last month, there is no substitute for coming into headquarters. It’s just that the ideal location may change – favoring urban environments, with all their amenities and propinquity, over suburban office parks.
San Francisco is a very desirable place to do business,” Gilbreath says. "Cities will become increasingly vibrant markets. The broad picture is you're going to have a massive excess outside that urban core."
Market Square. Images courtesy of Market Square SF.
With so much of a backlog of workpace sitting idle, though, even within cities there may be much more consolidation, streamlining, and super-efficient adapative re-use of existing and obsolete buildings. Twitter is moving into the massively renovated Market Square building in San Francisco, to be joined by Benchmark and Square. The original home of the Western Furniture Exchange and Merchandise Mart was built in 1937 and is an art deco icon.
It remains to be seen whether the mobile workforce trend will really have a transforming impact on office real estate. But for this piece of the rapidly changing workplace scenario, we are once again back to the future: cities re-imagining, reinventing, and re-using their assets.
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