Employees want to be together again, but only if it's optional
Demand for office space is stronger in the Seattle/Bellevue area than it is in any other US city. It’s being driven by tech growth, according CBRE, a company that tracks real estate trends.
How many people actually end up working in those offices is the big unknown. We spoke to two local tech companies that are wrestling with how much office space to sign up for.
A small group of employees at a local startup gathered for a meal together at the CEO's house on Mercer Island. Unmasked in order to eat, the gathering almost felt like something from the Before Times. This group used to gather regularly at and near their old headquarters south of the Pike Place Market. But during the pandemic, they let their headquarters go, and went full-remote.
These employees work for Crowd Cow, a tech company that delivers gift boxes full of frozen chunks of gourmet meat by UPS. So of course they're frying up some steaks.
The event is part fun, part work. Senior Director Elizabeth Liu marveled at novelty of the scene.
“We have the marketing team here, we have the site merchandising team here, we have the gifting team here…” she said.
How does it feel to see each other again, after so long?
“Fucking amazing," she said. "Sorry, you can edit what you need to edit.”
Companies all around the world are facing questions about what the workplace of the future should look like. In many areas, companies have shelved expansion plans for later, depressing the demand for office space. Others are reconsidering how offices operate altogether. Crowd Cow is no different.
Managers at Crowd Cow have been polling employees regularly about when they'd like to come back to a physical office and where that office should be. And they've heard the workers want a place to gather together again. So they’re talking about leasing office space in the future. But there are lots of questions swirling around.
“I do think there’s a lot on the line," Liu said. "It is one of the biggest decisions that the leadership team is making.”
One question: How often should people be asked to come into the office? This will determine how much space they should lease.
Many employees have said they want flexibility.
Elliott Newsom commutes from Tukwila. He said he'd like to come in one day every two weeks at most, to avoid the commute.
"I don’t even need a desk with my name on it. I just need a space to come to and either work as a team or have a conference room to talk to people in, and that’s about it.”
Audrey Flatley, who lives on lower Queen Anne hill, has a personal reason for wanting the flexibility: She had a baby four months ago and is just coming off maternity leave.
“And when I think about going back to an office – you know, I think one of the great things about being at home right now is I can be around my child, instead of going to the office and leaving him all day.”
Flatley said she hopes Crowd Cow invites people into the office, but doesn't make it mandatory. She loves her job now more than at any time in the last three years, but said leaving is an option if the lifestyle doesn't work for her family.
Another question is where the headquarters should be.
Saba Kalaimani said the ideal location may depend on how people get to work. Before the pandemic, many employees took public transportation to work every day. But if they’re coming in just for a meeting in the middle of the day, Kalaimani said they might be less likely to tolerate a two-hour round trip bus ride. He said those that can, may choose to drive instead.
“So a lot of factors we have to consider as far as what is more efficient," Kalaimani said. "Is that a place where public transportation is easily available, or is it a place where you can drive in and out very quickly and don’t have to worry about parking? That’s a huge consideration for us.”
If they want parking, he said that favors Bellevue as a potential location for their new headquarters. But if they want a place with lots of interesting things to do after work, he said that favors Seattle.
As for who comes in when, Crowd Cow's letting managers decide what’s best for each team.
Different companies have different takes on this. And many workers may be required to come into work, as essential workers have done all through the pandemic. But in the tech sector, many companies are giving employees a lot of freedom. It’s true at Amazon and Microsoft. And it’s true at F5, a global tech company based in Seattle with 1,400 local employees.
F5 helps companies manage secure connections between remote workers and offices, so you can bet they’re doing a lot of business lately. At the time of publication, their stock price was up 53% over last year.
Starting in January, local employees at F5 will be able to choose from three options: They can come into the office full time, work remotely full time, or take a hybrid approach.
Ana White is the Chief People Officer for F5. She sent me photos of the shiny new office tower they’re leasing near Seattle City Hall.
“The building that we have in Seattle is – I just think it’s one of the best," White said. "And we all love it. But at the same time, we don’t want to be too headquarter-centric.”
They want employees to feel part of the team wherever they’re working.
“Let’s say you’re in Spokane, or a different country, or you’re working from your house – we want an even playing field for everyone, so everyone feels included and everyone has a sense of belonging.”
White expects employees’ preferences to change over time. Just like people’s attitudes have changed about working remotely after doing it a year and a half.
Employees' "newfound influence"
Colin Yasukochi heads the Tech Insights Center at CBRE, a firm that tracks real estate trends.
“Employees have newfound influence over what their working situations are," Yasukochi said. "Because many of the tech companies actually started off being a little more stringent on employees returning back to the office. They said 'No, we need to be back to the office; we need to be this many days per week.' And many of them have backed off that as they’ve gotten pushback from their employees.”
How full office buildings ultimately will be, Yasukochi notes, will influence the real estate market. An office that's built to accommodate one third of a company's workforce at any time has a much smaller footprint than one that's build for all employees to be at their desks every day of the week. If people come to work on different days, they can share desks.
Accommodating a hybrid workforce in that way isn't free, however. Yasukochi knows this from experience, as they've been sharing desks at CBRE for years.
"If I'm going to use your desk, all of your stuff can't be there, so you need file cabinets, lockers; you have to invest in all those types of things," he said.
"And then there's cleaning protocols, so that when the next person shows up to the desk, they're confident that there's a clean environment, because there's still health concerns out there."
Yasukochi points to office standards like the phone system. When people share a desk, they need to make sure one employee's calls go to the right spot. When the next employee sits there, they need to make sure their correct calls go there too.
"Maybe there's walls in some places that need to be removed," he added. "Maybe you need to create new team collaboration rooms."
CBRE research shows that in the greater Seattle metro area, demand for office space has remained strong, the strongest in the nation, if you look at rising rents for office space.
There are many reasons for this, Yasukochi said.
First, the tech industry dominates the market here, and many tech companies have done well during the pandemic.
Second, firms from based in places like San Francisco already had plans to expand in the Pacific Northwest before the pandemic. When Covid hit, Yasukochi said they continued to develop offices in Seattle and Bellevue, even as they pulled back from San Francisco, which is much more expensive.
Yasukochi said demand for office space in Seattle and Bellevue would likely have been even higher if the pandemic had not hit.
For tech companies today, it's all about employee retention, and making sure companies have enough office space for the people who do want to come in. What’s unclear now, Yasukochi said, is how many companies snapping up space in Seattle and Bellevue now will get rid of some of it later if coming back to the office proves less popular than companies expect.