Organizations That Are Slow to Adapt
Downtown areas, central business districts, and nearby neighborhoods that were thriving before the pandemic could become less popular if the appeal of living near and working in major employment centers dwindles, and businesses such as restaurants, bars, and coffee shops that largely rely on nearby office workers don’t come back.14 Indeed, many of these neighborhoods have already changed dramatically because of the pandemic, despite government subsidies such as the Paycheck Protection Program and the Restaurant Revitalization Fund geared to help keep these businesses afloat.202122
A number of major companies have reduced their corporate office space. The list includes Target, REI, CVS, Ralph Lauren, Old Navy, and Nordstrom.23 Commercial real estate firm CBRE reported that as of July 2021 the only major U.S. office market whose tenants’ demand for square footage exceeded 2018-2019 baseline levels was Boston (though Denver was close, and seven markets showed notable gains in the first seven months of 2021).24
Still, a shift away from working in concentrated downtown areas could create new economic opportunities around the satellite offices that many employers, including Apple, REI, and Google, are opening or expanding.252623 “Companies are facing a lot of office relocations right now,” says Wiener. “We’ve talked to many that are building more satellite offices in the ’burbs, to shorten commutes for employees that already were living out there or have moved out of the crowded downtown areas with the COVID trends.” Employees benefit from more space, easier commutes, and easier parking.
“Bottom line: Employees feel safer and are more likely to stay with the company when given the option to work at a smaller facility that’s closer to where they live,” Wiener says.
Numerous organizations are making transformative changes in response to both the pandemic and the increased awareness of workplace inequities related to race, gender, and ability. Companies that remain stuck in their old ways may find themselves struggling to attract and retain talent if they don’t address the needs of a diverse workforce.
“Economic losers will be organizations that are slow to change or adapt—ones who hedge their bets or pretend to embrace hybrid or remote-first work but who don’t actually put the systems, policies, and resources in place that are needed to make it successful,” says Wendy Ryan, CEO of Kadabra, a leadership and change consulting firm based in San Jose, Calif. “Organizations who embrace a human-centered approach to designing their workplaces, schedules, and in-person collaboration requirements are going to be best positioned to thrive over the next 20 years.”