TO HQ, OR NOT TO HQ? THAT IS THE QUESTION.
The transition to remote work during the pandemic has freed companies to rethink corporate headquarters, the purposes they serve and — in some cases — whether they need them at all.
It’s yet another example of how the Covid-19 cataclysm also has served as a catalyst for economic innovation that’s forced businesses, workers and policymakers to adjust on the fly to a new normal. Now, instead of planting a corporate flag in one location, companies are testing dual-campus and hub-and-spoke models to better accommodate employee and client needs. Some are even transitioning to a fully remote HQ, perhaps permanently.
“This is one of those things where the pandemic has accelerated a trend, not changed the trend,” said David Smith, global head of occupier insights for Cushman & Wakefield.
Employee demand is driving the conversation. Smith said an array of polls and surveys shows many office workers want to continue to clock in remotely two to three days a week, even after the pandemic. About 5% of U.S. workers were fully remote pre-pandemic, according to the Bureau of Labor Statistics, and an additional 20% were considered “agile,” or able to shift between in-office and remote environments.
Smith predicted both categories would double post-pandemic. Translation: About half of office workers will be remote at least part of the time.
“I think what we’ll actually see is [companies] being smart about their [office] portfolios and how much space they need, but really investing more in that space so that it elevates your work experience when you are there,” he said.
The workplace evolution poses several advantages to employers, among them the ability to hire far-flung talent — potentially even more affordable talent — living in secondary or tertiary markets versus high-cost metropolitan areas. It also creates opportunities to simultaneously maintain physical presences in multiple key markets.
But those come with tradeoffs. Corporate culture and connectivity are especially important for younger workers and new hires, and a fumbled transition to a more flexible or even fully remote headquarters could lead to higher turnover, Smith cautioned.
“I think in a lot of cases, the benefit(s) of high-quality core office and HQ locations that bring people together, that drive innovation and product development … are going to outweigh any cost savings from going away from having an office at all or dramatically reducing your footprint,” he said.