The same applies for collaboration and innovation, where Steinberg argues the advantages of personal interactions like casual chats and brainstorming together in a room add up to far more than what can happen on Zoom and Microsoft Teams meetings.
Good companies, he says, are dealing with these issues now because they know that productivity has fallen off a little over the last two years of COVID-19.
“They’re working through this and saying: ‘Hey, you got to be in the office … three days, four days, five days, whatever. But what you can’t do is upset the operating rhythm of the company’. Steinberg says. “So don’t confuse the marketing of the tech companies with the reality – they want to get their staff together.”
Company CEOs from Telstra to Atlassian would hardly agree, of course, having celebrated the ability of employees to work from anywhere, any time as a permanent advance and attraction. Yet it’s also notable that Atlassian has also just started construction on Atlassian Central, a pioneering $1.4 billion “sustainable” smart-building office tower in Sydney’s future tech precinct, with Dexus as its development partner.
Not that it’s surprising a continued faith in the value of high-quality office space in Australia’s big cities was widely shared at The Australian Financial Review Property Summit. It’s been a highly successful business model, after all. But a worldwide shortage of workers and record low unemployment still means most bosses aren’t willing to risk losing hard-to-replace staff by forcing them to return to the office if they don’t want to.
One starkly obvious result, especially in the lockdown capital of Melbourne, has been CBDs that feel and look much emptier than in 2019. That’s particularly apparent on Mondays and Fridays, but it’s starkly evident mid-week as well.
Happy to bet big money
Yet not only are property industry leaders happy to bet big money and future returns on the survival of the office and strong demand for the right sort of office space, they also insist there are extremely important reasons why this is a social and economic good.
David Harrison, CEO of property funds manager Charter Hall, is blunt.
“I think governments and corporates around the world – and Australia is no different – have been pretty weak at realising the risks coming from having all our 20-somethings coming from uni, not getting any mentoring and any training and any cultural understanding of what your organisation’s about,” he told the Summit. “So it’s a big problem.”
Some of that problem will be resolved automatically, according to several speakers at the Summit, when unemployment starts to rise again – as it will given rising interest rates and rising risk of recession. A tougher economic climate would clearly make it easier for employers to insist on a presence in the office, harder for reluctant employees to simply shift jobs. Harrison uses the increased automation in the logistics sector to make a broader point.
“If we keep having to deal with a lack of productivity and people saying I want to work from home, once unemployment rises, then we will see more jobs replaced by robots,” he says. “So I think we’re going to see quite a change over the next five years.”
And even for positions where robots or automation are not really an option? “People have got to decide whether they want a career or a job. It’s really simple,” he says.
But none of this necessarily means a return to old office patterns – certainly not to old-style offices. Most speakers emphasised the need to make any office more appealing to employees. The good news is their predictions include an end to the pre-pandemic fad for “hot desking” – more politely known as activity-based working, which was actually cost-cutting code for shrinking the space allotted to each individual.
Instead, the Summit focused on the demand for more collaborative spaces and amenities and various attractive features being included as necessary trade-offs for a return to the office.
Matthew Bouw, CEO of Cushman& Wakefield, calls it “justifying the commute” – saying the length and inconvenience of the commute is a major reason for people’s resistance to returning to the office.
And even for sparkling new office towers, there’s already evidence of at least temporary oversupply in a few areas like North Sydney. But people banking on their ability to work only from home may have misjudged the market long-term.
