Here’s the Latest WE:Brief – WE keep you in the know – 8th Edition!

This 88-page report from the McKinsey Institute is a must read for our industry. It looks at how the pandemic has affected, and will likely continue to affect, where people work, live, and shop in the world’s largest cities. Here are a some highlights from just the first ten pages: 

– Their moderate scenario estimates the decline in demand for urban office space to be, on average, 13% lower in 2030 than in 2019. The severe scenario puts the decline at 38%.

– The estimated decline in value associated with those scenarios is between 26% ($800B) and 42%.

– The impact will be vastly different from one city to the next. San Francisco, New York, and Munich will be the hardest hit.

– Office occupancy dropped by 90% at the peak of the lockdown. Currently, it is still down 30% from the pre-pandemic level. 

– On average, office workers were in the office 3.5 days a week. That frequency was slightly less among the professional services and information sectors (3 days and 3.2 days, respectively).

– Up to 7% of people made a permanent move from the city during the pandemic. The greatest outbound migration occurred in Dallas, New York, and San Francisco.

– Foot traffic near urban stores is 36% lower than it was before the pandemic. Owing to increased online shopping, suburban stores saw a 16% decline.

– Transaction volume (the total dollar value of all sales) fell by 57% in the top US cities, the average sale price per square foot fell by 20%, and asking rents fell by nearly 22% (all in real terms) from 2019 to 2022.

“To cope (with aging populations), experts say, rich countries will need to rethink pensions, immigration policies, and what life in old age looks like.”

In 2013, a quarter of the population of Japan was over 65 years of age. In all of recorded history, no population has ever been as old as Japan’s is now and others are expected to get there over the next ten to thirty years. By 2032, most of Western Europe will hit the twenty-five percent mark, and by 2044, South Korea, Britain, and Eastern Europe will do the same.

Meanwhile, the working populations of developing countries are growing.

In 1990, eight of the ten largest economies in the world also had the highest percentage of working age citizens. According to World Bank data, by 2023, only two were in the top ten (South Korea and China) and by 2050, India will be the only country on the list. If these predictions prove correct and the aging countries don’t prepare for a shrinking percentage of their working age populations, they may face a gradual decline in well-being and economic power. 

It’s a 158-page treasure trove of nuanced insights about the impact of return-to-office mandates on employee attitudes and intentions, company plans regarding real estate, space design, incentivizing RTO strategies, uptake of the four-day workweek, employee location preferences for different types of work, and much more! Individual reports are provided for a number of countries and regions.

While many have embraced ChatGPT and similar AI technologies, companies including JPMorgan Chase, Deutsche Bank, Verizon, Northrop Grumman, Samsung, Amazon, and Accenture have, at least for now, blocked employees from accessing them. The majority have done so for, what they consider to be, safety reasons.

It’s not that they are rejecting the potential utility of the technology, but they worry that, left unchecked, employees could inadvertently expose private customer data and/or intellectual property.

If you or your company is using ChatGPT, and let’s face it most are, be sure you/they understand that what goes into most of these intriguing platforms, feeds the algorithm and could, therefore, come out. 

Remote work advocates have long suggested that remote work would help create employment opportunities for those with physical or mental disabilities. It turns out WE/they were right. More than 1.5 million workers in this category have joined the workforce since prior to the pandemic. While there is still a long way to go, the employment-to-population ratio among those formally designated as disabled stands at a record high of over 22% and it’s growing at a rapid pace since mid-2020. 

Allison Chase, president and CEO of The Able Trust, a Florida-based nonprofit focused on the disabled community says “basic transportation is one of the biggest barriers many people with disabilities have faced when looking for work. The post-pandemic remote-work boom has helped to eliminate that obstacle.”

Experts estimate that one-quarter of the U.S. population lives with a disability, but 70% are not counted. As a result of stigmas, fear, and other barriers, only 4% of workers self-identify as disabled. Those whose disabilities are cognitive in nature, are particularly “invisible.” And a 2023 report from PWC‚ a good read on its own, indicates that only 13% of companies are actively addressing neurodiversity. 

Unfortunately, even the ADA does not automatically protect even those with a formal disability designation from being required to be in the office. This needs to change if we want to expand opportunities for not just this group, but other marginalized populations such as those who live with undisclosed disabilities, military spouses, caregivers, and others. 

A new GAO report shows the large majority of the US federal government’s nearly 700 million square feet of owned and leased space is less than 25% occupied. This is based on occupancy data (as measured by space usage vs. capacity) from 24 agencies that account for nearly 98% of the government’s real property. The GAO testimony indicated:

– All of the agencies had completed their return to office transition by the end of 2022 and occupancy has since stabilized.

– The annual cost of leasing and operating those buildings totals approximately $7B a year.

– More than half of 180 million square feet of leased space will be up for renewal in the next three to four years  

– Seventeen of the 24 agencies reported occupancy of less than 25%. Among the other seven agencies, none reported occupancy higher than 49%. 

The report identified three primary causes for the low utilization: 

– Agencies have long retained more space than they needed

– Much of the space is not configured to support a modern workforce

– In-office work has not returned to pre-pandemic levels due to continued telework.

This article comes from a respected peer-reviewed journal (JSTOR). It’s interesting in its own right, but what I enjoyed were the unexpected giggles about AI and remote work. Though the author probably didn’t set out to be funny but I did get a giggle from these lines:

Citing a Gallup survey that found 94% of employees in remote-capable jobs want to keep working from home at least part of the time, the author concludes “We might miss the human contact with colleagues, but we don’t miss it enough to put on pants and go to the office every day.”

In defense of some of the criticisms around the current AI offerings the author writes “An always-on, nearly infinitely knowledgeable colleague who is happy to brainstorm or spitball on the subjects of your choice. So maybe it’s a little prone to spouting false info, but really, is that any different from the reliability of human colleagues?”

And regarding the argument that there are just as many interruptions at home as there are in the office the author notes “Sure, your dog might bark—but he doesn’t expect you to answer!”

Recognizing that a hybrid work environment would create new problems around noise, Meta has been prototyping new solutions that would allow someone to say, take a zoom call at their desk without disturbing your colleagues. They considered adding more ‘phone booths’ but a building code requiring separate sprinklers for each one sent them back to the drawing board.

The current design iteration, is a felt-like semi-flexible screen that can be wrapped around an existing desk for both visual and sound privacy. Testing showed these units could reduce noise by 20db. Their engineers took to the new idea and quickly staked their claim on spaces they could call their own by personalizing them with items they brought from home. 

While I feel like I’m having groundhog’s day return to the cubicle experience, Meta sees it as a flexible way to solve two of the biggest complaints around open offices, noise and privacy. They have ordered 7,000 units and plan to make these available in about 10% of spaces.

You can’t blame the pandemic for instigating the outbound migration of talent from big cities, but it did accelerate the trend. Data through 2021 shows:

These cities are not alone in the net brain drain. Other high cost areas including Los Angeles, Chicago, San Jose, and Seattle, are in the same boat. Even Boston is losing it’s pull. The large majority have opted for somewhat smaller metro areas such as Phoenix, Austin, and Raleigh N.C. In 2020 and 2021 some opted for mid-sized metros and even rural areas. 

The NYT article points to cost of living as the primary reason white-collar workers are following the outbound trend set by their blue-collar neighbors years ago.

The end result is that if employers expect to hire the best and the brightest, they are going to have to think beyond their downtown office towers.

Would you like to join our illustrious group of sponsors? Download the WE 2023 Sponsor Benefit table for all the details about the benefits or contact David Karpook, Susan Spiers, or Pat Turnbull for questions and opportunities. 

This 88-page report from the McKinsey Institute is a must read for our industry. It looks at how the pandemic has affected, and will likely continue to affect, where people work, live, and shop in the world’s largest cities. Here are a some highlights from just the first ten pages: 

– Their moderate scenario estimates the decline in demand for urban office space to be, on average, 13% lower in 2030 than in 2019. The severe scenario puts the decline at 38%.

– The estimated decline in value associated with those scenarios is between 26% ($800B) and 42%.

– The impact will be vastly different from one city to the next. San Francisco, New York, and Munich will be the hardest hit.

– Office occupancy dropped by 90% at the peak of the lockdown. Currently, it is still down 30% from the pre-pandemic level. 

– On average, office workers were in the office 3.5 days a week. That frequency was slightly less among the professional services and information sectors (3 days and 3.2 days, respectively).

– Up to 7% of people made a permanent move from the city during the pandemic. The greatest outbound migration occurred in Dallas, New York, and San Francisco.

– Foot traffic near urban stores is 36% lower than it was before the pandemic. Owing to increased online shopping, suburban stores saw a 16% decline.

– Transaction volume (the total dollar value of all sales) fell by 57% in the top US cities, the average sale price per square foot fell by 20%, and asking rents fell by nearly 22% (all in real terms) from 2019 to 2022.

“To cope (with aging populations), experts say, rich countries will need to rethink pensions, immigration policies, and what life in old age looks like.”

In 2013, a quarter of the population of Japan was over 65 years of age. In all of recorded history, no population has ever been as old as Japan’s is now and others are expected to get there over the next ten to thirty years. By 2032, most of Western Europe will hit the twenty-five percent mark, and by 2044, South Korea, Britain, and Eastern Europe will do the same.

Meanwhile, the working populations of developing countries are growing.

In 1990, eight of the ten largest economies in the world also had the highest percentage of working age citizens. According to World Bank data, by 2023, only two were in the top ten (South Korea and China) and by 2050, India will be the only country on the list. If these predictions prove correct and the aging countries don’t prepare for a shrinking percentage of their working age populations, they may face a gradual decline in well-being and economic power. 

It’s a 158-page treasure trove of nuanced insights about the impact of return-to-office mandates on employee attitudes and intentions, company plans regarding real estate, space design, incentivizing RTO strategies, uptake of the four-day workweek, employee location preferences for different types of work, and much more! Individual reports are provided for a number of countries and regions.

While many have embraced ChatGPT and similar AI technologies, companies including JPMorgan Chase, Deutsche Bank, Verizon, Northrop Grumman, Samsung, Amazon, and Accenture have, at least for now, blocked employees from accessing them. The majority have done so for, what they consider to be, safety reasons.

It’s not that they are rejecting the potential utility of the technology, but they worry that, left unchecked, employees could inadvertently expose private customer data and/or intellectual property.

If you or your company is using ChatGPT, and let’s face it most are, be sure you/they understand that what goes into most of these intriguing platforms, feeds the algorithm and could, therefore, come out. 

Remote work advocates have long suggested that remote work would help create employment opportunities for those with physical or mental disabilities. It turns out WE/they were right. More than 1.5 million workers in this category have joined the workforce since prior to the pandemic. While there is still a long way to go, the employment-to-population ratio among those formally designated as disabled stands at a record high of over 22% and it’s growing at a rapid pace since mid-2020. 

Allison Chase, president and CEO of The Able Trust, a Florida-based nonprofit focused on the disabled community says “basic transportation is one of the biggest barriers many people with disabilities have faced when looking for work. The post-pandemic remote-work boom has helped to eliminate that obstacle.”

Experts estimate that one-quarter of the U.S. population lives with a disability, but 70% are not counted. As a result of stigmas, fear, and other barriers, only 4% of workers self-identify as disabled. Those whose disabilities are cognitive in nature, are particularly “invisible.” And a 2023 report from PWC‚ a good read on its own, indicates that only 13% of companies are actively addressing neurodiversity. 

Unfortunately, even the ADA does not automatically protect even those with a formal disability designation from being required to be in the office. This needs to change if we want to expand opportunities for not just this group, but other marginalized populations such as those who live with undisclosed disabilities, military spouses, caregivers, and others. 

A new GAO report shows the large majority of the US federal government’s nearly 700 million square feet of owned and leased space is less than 25% occupied. This is based on occupancy data (as measured by space usage vs. capacity) from 24 agencies that account for nearly 98% of the government’s real property. The GAO testimony indicated:

– All of the agencies had completed their return to office transition by the end of 2022 and occupancy has since stabilized.

– The annual cost of leasing and operating those buildings totals approximately $7B a year.

– More than half of 180 million square feet of leased space will be up for renewal in the next three to four years  

– Seventeen of the 24 agencies reported occupancy of less than 25%. Among the other seven agencies, none reported occupancy higher than 49%. 

The report identified three primary causes for the low utilization: 

– Agencies have long retained more space than they needed

– Much of the space is not configured to support a modern workforce

– In-office work has not returned to pre-pandemic levels due to continued telework.

This article comes from a respected peer-reviewed journal (JSTOR). It’s interesting in its own right, but what I enjoyed were the unexpected giggles about AI and remote work. Though the author probably didn’t set out to be funny but I did get a giggle from these lines:

Citing a Gallup survey that found 94% of employees in remote-capable jobs want to keep working from home at least part of the time, the author concludes “We might miss the human contact with colleagues, but we don’t miss it enough to put on pants and go to the office every day.”

In defense of some of the criticisms around the current AI offerings the author writes “An always-on, nearly infinitely knowledgeable colleague who is happy to brainstorm or spitball on the subjects of your choice. So maybe it’s a little prone to spouting false info, but really, is that any different from the reliability of human colleagues?”

And regarding the argument that there are just as many interruptions at home as there are in the office the author notes “Sure, your dog might bark—but he doesn’t expect you to answer!”

Recognizing that a hybrid work environment would create new problems around noise, Meta has been prototyping new solutions that would allow someone to say, take a zoom call at their desk without disturbing your colleagues. They considered adding more ‘phone booths’ but a building code requiring separate sprinklers for each one sent them back to the drawing board.

The current design iteration, is a felt-like semi-flexible screen that can be wrapped around an existing desk for both visual and sound privacy. Testing showed these units could reduce noise by 20db. Their engineers took to the new idea and quickly staked their claim on spaces they could call their own by personalizing them with items they brought from home. 

While I feel like I’m having groundhog’s day return to the cubicle experience, Meta sees it as a flexible way to solve two of the biggest complaints around open offices, noise and privacy. They have ordered 7,000 units and plan to make these available in about 10% of spaces.

You can’t blame the pandemic for instigating the outbound migration of talent from big cities, but it did accelerate the trend. Data through 2021 shows:

These cities are not alone in the net brain drain. Other high cost areas including Los Angeles, Chicago, San Jose, and Seattle, are in the same boat. Even Boston is losing it’s pull. The large majority have opted for somewhat smaller metro areas such as Phoenix, Austin, and Raleigh N.C. In 2020 and 2021 some opted for mid-sized metros and even rural areas. 

The NYT article points to cost of living as the primary reason white-collar workers are following the outbound trend set by their blue-collar neighbors years ago.

The end result is that if employers expect to hire the best and the brightest, they are going to have to think beyond their downtown office towers.

Would you like to join our illustrious group of sponsors? Download the WE 2023 Sponsor Benefit table for all the details about the benefits or contact David Karpook, Susan Spiers, or Pat Turnbull for questions and opportunities.