A little more than a year ago, work was a place. Real estate accounted for a significant portion of all corporate assets, a seemingly immovable expense. Today, as we emerge from the pandemic, CEOs are zero-basing their thinking about their workplace, reconsidering how they work and weighing the moves they need to make now to build resiliency.
While the pandemic-forced shift to remote work presented a major challenge, it also revealed an unimaginable opportunity to free up real estate investments and unlock funds to fuel transformation, build agility and drive growth. Accenture Research takes a closer look at the reality of work post pandemic.
“Out of Office” notification
Our research illustrated the C-suite’s shifting lens on real estate investments post-pandemic, and the findings are clear: Only 1% of all respondents say they are not cutting back on their office space investments. Of the overwhelming majority that plan to reallocate funds by scaling back, 62% say they’re investing in technology. Nearly half (47%) say they’re going to use freed up resources to hire new talent or upskill existing employees, according to Accenture’s global 2021 CxO Pulse Survey.
Why not? After all, the great experiment of remote working worked better than many could have imagined. Freed from the grind of commuting, employees gained a new level of flexibility that they don’t want to give up.
A majority (54%) of those who can do their job from home want to continue to do so either all or most of the time after the pandemic, according to research by the Pew Research Center. A third said they would want to work remotely some of the time; and just 11% report rarely or never wanting to work from home.
CEOs are looking to reimagine office space to include some combination of traditional brick and mortar combined with digital environments to give employees more flexibility and save cost. This shift in mindset effectively mitigates or eliminates altogether the barrier of geographical borders. Which, in turn, makes attracting the specialized talent needed to accelerate digital transformation possible, widening their potential talent pool to welcome an ocean of possibilities.
In addition to opening up new talent pools, business leaders are reconsidering their ways of working to retain their top talent, offering greater flexibility to meet employees’ changing expectations post-pandemic.
Consider one North American retailer that recently announced its move to a hybrid model, announcing plans to leave its downtown headquarters, vacating nearly one million square feet of office space. They are dispersing thousands of employees to smaller officers for those times when they need to go into the office. Clients also are weighing a move from high-cost locations such as New York City to more remote (read: lower cost) areas – both onshore and off. Still, others are staying put for now.
In addition to where they work, businesses are reconsidering how they work. They’re rethinking how they manage real estate to provide global employee experiences and services. They are also looking at how they physically reconfigure workspaces given the new reality, and they’re considering how each of those moves affects other important aspects such as collaboration.
To be clear, this not a cost-cutting mission – it’s a growth imperative. Business leaders we’re speaking with recognize the opportunity to break down barriers to enhance collaboration and agility. The bottom line is – how can this shift drive growth?
Enabling growth through digital investment
The pandemic has presented opportunities unlike any we’ve seen in downturns before, shattering norms and paving the way for real lasting change.
How will they make that change a reality? Partly through investments in digital technologies. It’s not surprising given that 46% identify accelerating digital transformation across all parts of their businesses as one of their top strategic objectives over the next three years, according to Accenture Research.
Not only does digital enable new ways of working, it also drives visibility into costs. It’s surprisingly common for business leaders to lack visibility into the full line-item cost of real estate and surrounding service costs. Establishing full visibility is the first critical step.
Once costs are understood, a Zero-based mindset (ZBx), can provide a holistic view on real estate. So instead of the question being return to office or not, companies can zero-base their thinking and approach their space more intentionally in ways that drive business innovation and growth. Who needs to work together? Where? What are the moments when in-person collaboration is crucial? What are the fixed costs that can be made variable given the new configuration of physical space? How can AI and machine learning be deployed to cover routine tasks that should be automated?
Looking through the ZBx lens uncovers areas of savings that can then be funneled into more innovation and automation, creating a virtuous circle of savings followed by a boost in performance. ZBx infuses flexibility and agility into companies and makes it easier for them to evolve as marketplace conditions change.
Getting real about real estate
There’s never been a better time than now, in the midst of the disruption of the pandemic, to intentionally re-imagine real estate through a zero-based lens. Those that get it right can gain a competitive advantage by investing their resources where they will fuel growth and resilience.
By Robert Williams
About the author: Robert Williams is Managing Director at Accenture Strategy and Global Zero-Based Mindset (ZBX) Lead.