While investors, operators, and employees contemplate the future of work, others like city officials and urban planners are working doubly hard to forecast what these changes mean for cities, their residents, and the local businesses that support them.
Change is the only constant, but I doubt few people properly predicted just how profound this shift to working from home would be – or the impact that it may have on our cities, commercial properties, mixed-used buildings, and more. In order to predict who the winners and losers may be in this shift, we break down some of the more granular questions that will influence who will “win” in this new hybrid work environment.
1. How do technology companies stand to benefit from a shift to hybrid work? What gains can they make that the pandemic-induced shift to remote work did not already create?
Changing a culture is hard and takes time. Technology companies are best set up to thrive in this new work environment because most had a head start in IT and employees were likely using Zoom, Atlassian, Salesforce, and other cloud-based tools before the pandemic hit. That’s why organizations who already embraced a cloud-first environment will, in my opinion, end up further ahead than others who are scrambling to implement new solutions.
2. How do home improvement companies and contractors stand to benefit from a shift to hybrid work? What gains can they make that the pandemic-induced shift to remote work did not already create?
Home improvement companies and contractors have a new source of demand for the work they do.
Previously reserved for home builders and owners who were looking to upgrade kitchens and living rooms in their residences, money is now pouring into improving spaces dedicated for home offices as more and more people are spending increased amounts of time there.
We have been renovating our home for the past 9 months, and we have experienced first-hand how a surge of demand impacts prices, wait times, and (a lack of) communication. The contractors who will do well are those who are organized, automate their quoting and billing processes, communicate clearly on timelines and delays, and can obtain materials cost-effectively.
The winners in this space also embrace the cloud-based technology in the first question. Trying to implement new software to run your business while things are insanely busy is near impossible. The teams who were set up before the pandemic – or that have been implementing over the past 18 months – are set up to be more efficient and capture more of the market moving forward.
3. Will office cleaning and maintenance services see cutbacks if companies adopt hybrid work? Will workers in these industries be better or worse off than they are now, with many companies still mostly remote?
I personally think commercial real estate is going to take a major blow. The tech company I help lead has multiple office spaces in LA, NYC, and other major metro areas. We do not plan on renewing our leases later this year. We may keep one of our premier spaces, but we will most certainly downsize our footprint.
The reason is because we have polled our employees and most prefer to continue working from home – or some type of hybrid setup. We will likely shift to a model where we rent a number of desks at a WeWork-type office spaces, where employees can come in and work from a “hot desk” as they wish to get a change of scenery. The biggest drivers of this shift are
- a reduction in commute times to work, and
- a preference toward using their own spaces which have become more productive over time.
As a result, I do think commercial cleaning services will take a hit. But I also think people and companies who are doing that type of work will have an opportunity to shift their skillset into the home for residential cleaning as more knowledge-based employees work from home.
4. How will public transit workers and riders be affected if corporate America largely adopts hybrid work?
Public transit has been down substantially since March 2020. Each city varies, but weekly ridership – as a whole in the U.S. – was down as much as 80% from its peak in February 2020.
As a result, the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 (CRRSAA) was the second wave of emergency funds provided to public transit agencies. In total, $39 billion has been provided by Congress to keep these organizations operations. However, it has been forecasted that they will continue to face budgetary shortfalls in 2022 if usage doesn’t start to get back to pre-COVID numbers… and quickly.
There will an impact on jobs transit-type jobs, but it is my guess that they won’t be as impacted as there will be on real estate-related services.
5. How will food service workers be affected?
Believe it or not, people still need to eat – multiple times per day.
Where people eat is the biggest thing that has changed. Grocery has seen a massive surge over the past year because so many people are working from home and cooking more as a result. That said, no one is going to cook every meal themselves.
Restaurant, serving, cooking, and cleaning positions will shift when compared to previously urban centers focused on catering to business workers with offices nearby.
6. How will downtown areas be affected by hybrid work, especially if large companies reduce their office space or leave these areas?
Each downtown area is different: some have commercial and residential spaces close to one another, while others are strictly business-focused.
The downtown areas that will change the most are the ones where large corporate headquarters go underutilized. If an office that previously had 3,000 employees visiting daily now sees 300-600, surrounding small and service businesses (convenience stores, parking, restaurants, print services, etc.) will suffer.