Daily Digest News – May 12, 2021

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How Tenants Pivot When Flex Space Firms Go Bankrupt

By the time the pandemic had started to feel like a real threat, Knotel occupant L.D. Salmanson, CEO and cofounder of real estate data firm Cherre, knew there was uncertainty on the horizon for the flex space operator.

At the time, his company was renting out 15,000 square feet at Knotel’s 575 Eighth Avenue location in New York. However, Salmanson noted that the company was running out of money and was losing confidence in former CEO Amol Sarva.

Soon enough, Cherre began working on a Plan B to ensure they would have an office in case Knotel went belly-up. They then reached out to the building’s owner and management firm to discuss negotiations.

“We said, ‘We see what’s coming. If this is a prolonged event, Knotel is going to run out of money,’” said Salmanson.

It turns out, Salmanson’s intuition was right. Knotel had stopped paying rent at the property prior to filing for bankruptcy in January. By the beginning of 2021, Cherre signed a three year lease for the same space for less than it had been paying Knotel.

This story is just one of many grim looks at how the traditional model of the flex office market is not as sustainable as once viewed. The pandemic only highlighted this difficulty.

“We worked with [the building] to evict Knotel from the premises before the bankruptcy and assumed the lease directly under different terms,” said Salmanson.

Credit: Bigstock

Hana Creates Council To Guide Post-pandemic Office Design

Now that over half of Americans are fully vaccinated, the idea of returning to the office seems plausible. Although some companies have committed to permanent remote working policies, it’s clear that the past year has validated the need for some in-person collaboration.

Work arrangement plans need to be deeply thought out for the sake of employee satisfaction, health and safety.

“Businesses shouldn’t be overly handcuffed by the previous metrics for office space that were based on five-to-10-year scales and the need for cubicles,” said Andrew Kao, vice president of product at flexible workspace provider Hana. “Companies need to realize that they will try new approaches over the next 12 months and some won’t work. That’s how they’ll determine their success in the long run.”

Because of this, Hana has launched a product council called Hana Innovation Partners (HIP), which includes Samsung, office furnishing providers Herman Miller and Muraflx and construction firm Structure Tone.

This council aims to help provide a guideline for organizations who are trying to reconfigure their office spaces to be as safe as possible, while also nurturing collaboration and communication. For instance, workstations will no longer be seen as a necessity. Instead, zoned spaces that are adaptable and can be turned into meeting rooms or work environments will be emphasized.

According to Jeff Gibson, vice president of commercial real estate sales at Herman Miller, the adaptability has less to do with the reconfiguration of furniture, and more to do with accommodating various work styles and activities throughout the workweek.

Credit: Hana

Avoiding A Full Return To Pre-pandemic Normalcy

While parts of the world seem to be emerging from the pandemic and returning to their old lives, organizations must resist returning to total pre-pandemic normalcy as they move forward.

Although the strict policies of working from home may be tiring for some, it has offered insight into potentially new styles of working that suit employees more. 

So what can companies do to ensure that they don’t slip back into less-effective operations and work arrangements? For starters, leaders need to identify which practices are most beneficial to both employees and the bottom line.

The past year has been a time of experimentation and adaptability. Now, organizations should have an understanding of which policies are successful, why they were successful and how they can be implemented in the long run.

Leaders should encourage employee feedback to have a better understanding of what workers need from their work environment, whether that be a continuation of some remote working arrangements or a workspace close to their homes. 

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    Additionally, removing old language, rules or systems that make it easy to fall back into old work habits can help push the company forward. For example, some universities are facing pressure from trustees to justify large university infrastructures that require in-person attendance as online schooling has proven to be very successful.

    In this case, schools should identify which lectures are best conducted virtually, and which ones should require a physical presence. This same can be applied to the workplace. 

    Credit: Bigstock

    The Key To A Successful Remote Team? Invest In Employees

    Denver-based startup Flatfile thrived with a fully remote team even prior to the pandemic, giving them more time to work out the kinks of what makes a distributed workforce function optimally.

    Flatfile staffers have access to numerous perks, including ergonomic home workstations. Prior to the pandemic, Flatfile relied on coworking spaces, but the pandemic led the firm to introduce the home-office upgrade.

    For those who rent space, employees can apply for a stipend equal to the cost of a 150 square feet of real estate in their area.

    Additionally, the company invests up to $10,000 on bespoke home offices for their workers. To do this, Flatfile pairs employees with a designer to transform part of their home into a professional office.

    “Silicon Valley startups hand out gourmet lunches, free pet-grooming, and paid transportation like candy,” said David Boskovic, CEO of Flatfile. “We want working remotely to have truly exceptional benefits as well.”

    Employees at Flatfile also receive 12 weeks of paid family leave, four weeks of mandated vacation and a monthly allowance on random work-related perks such as coffee. 

    Credit: Bigstock

    Remote Working Benefits More Than Employees

    The benefits that employees receive from remote working arrangements has been lauded for years now.

    However, despite this, it appears that companies are in a hurry to bring workers back into the workplace. A survey from PwC found that 75% of executives expect to have at least half of their staff in the office by July. 

    But this policy doesn’t just have a positive impact on employees — companies can gain a lot too.

    The most obvious benefit is cost savings. Companies that have a more distributed or remote workforce can reduce their expenses by downsizing, consolidating or moving to smaller offices.

    Along with this, working from home can help organizations reach sustainable goals by reducing greenhouse gas emissions. In fact, research has found that U.S. employees that work from home save around 3.6 million tons of greenhouse gas each year.

    Maybe most importantly, analysis has shown that remote working can boost productivity. PwC’s survey found that 34% of employees have stated they are more productive when working from home and 52% of executives agree.

    This also means that companies can expand their talent reach. Without any geographical boundaries, employers can widen and diversify their talent pool more than ever.

    Credit: Bigstock

    Remaining Agile During The Next Workplace Transition

    While the initial transition to remote working mostly occurred out of necessity, demand to implement this policy in the future has grown. However, there is another side to this story as well.

    The death of the office was a farfetched concept. In fact, employees have started expressing feeling fatigued by remote working and wish to come into an office at least for part of the week.

    Since many companies resisted change until it became a case of life and death, can we expect that they are open to once again adapting to a new era that is the post-pandemic workplace?

    Yes, many traditional organizations have been stubborn about adopting more progressive workplace practices. However, one big takeaway from the past year is that employers had to instill into their employees. If they can continue to carry this with them in the future, success can be easy to achieve.

    For starters, this means understanding what role the office will play in the future. Not only is it necessary for times of collaboration and brainstorming, it’s also a necessity for the mental health of employees. 

    Additionally, understanding what productivity means will be key to finding the right arrangement for each worker. For instance, measuring productivity solely based on completed tasks is not an accurate look at how employees are doing. 

    Having a better insight into how well workers are performing, giving them the opportunity to upskill and allowing them to provide input about potential improvements is how a team remains truly engaged and productive.

    Credit: Bigstock
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