WFH’s Sheen Wears Off for Some Large Companies

Another day, another breathless survey repeating what we’ve been hearing for the last year: work-from-home is more than just a passing trend, and it just may be here to stay. 

But the most recent one—from the National Association for Business Economists—gives us pause. NABE is, after all, the arbiter of when recessions begin and end. So when a mere 11% of panelists NABE surveys say they expect all of their staff to “eventually” return to pre-pandemic working arrangements, many in the CRE sector straighten up and take note. 

The report compiles the responses from 97 NABE members across a variety of economic indicators and issues. Around 65% of those surveyed reported letting employees work from home during the pandemic.  And of the 11% of those who think all staff will return to physical offices, the majority come from the services sector.

Findings like these do little to ease office landlords’ increasing anxiety about the long-term viability of office as an asset class.  Nearly 40% of companies surveyed in a recent Visual Lease report have either reduced their office footprint as WFH took over this year or plan to, signaling decreased demand and occupancy will likely continue in many markets, and many companies are completely reimagining location strategies to cater to secondary markets increasingly favored by workers as the pandemic wears on. 

Among these dire findings there are, however, some glimmers of hope. 

This week, at a virtual meeting of the World Economic Forum, Barclays Chief Executive Officer Jes Staley and Mary Erdoes, who runs asset and wealth management for JPMorgan Chase & Co, both cast doubt on the notion that WFH is viable in the long-term for many companies, according to Reuters. 

Staley indicated that work from home is beginning to wear on companies and their employees and predicted more people will come back to an office environment with the option to work from home when necessary. 

“It will increasingly be a challenge to maintain the culture and collaboration that these large financial institutions seek to have and should have,” Staley said. 

Erdoes noted that the initial success of WFH resulted from the “adrenalin” required to quickly adapt to new working arrangements, which require “a lot of inner strength” to sustain.  

Now, nearly a year into the great WFH experiment, there are signs of wear, according to Erdoes: “It is fraying,” she said. “It is hard.”

The comments come on the heels of other indicators of cracks in the WFH veneer with large companies. In August, JPMorgan’s co-president Daniel Pinto told CNBC the company was emphasizing WFH across its policies:  “Depending on the type of business, you may be working one week a month from home, or two days a week from home, or two weeks a month,” he said. Fast  forward one month to September and the bank’s CEO Jamie Dimon was telling analysts in a private meeting that its productivity was falling, according to a report in Bloomberg. 

And around that same time, Google CFO Ruth Porat told Bloomberg TV that innovation, a hallmark of the company’s culture, requires in-person collaboration—a subtle marker that WFH wasn’t working so well for the tech giant. 

Survey data from the National Association for Business Economists foreshadows some companies scrapping their WFH policies once the pandemic is over. The survey also notes that roughly half (51%) of respondents anticipate their firms will suspend their stay-at-home policies in the second half of 2021, a significant increase from 22% reported in NABE’s October findings.