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Decentralization


Apparently being cooped up inside our homes has made many consider moving, or even jettisoning their homes entirely.


A dramatic case in point, Elon Musk tweeted about his plan to rid himself of all possessions, including his home. Why is he doing it? Freedom, he says.


But seeking more freedom is not just an elite luxury. Recent studies suggest many working professionals are at least considering relocation as well. Meanwhile, technology and shifting attitudes could accelerate the trend, making it easier to work anywhere. Possibly for the first time in history, people may soon be able to prioritize where they want to live, instead of setting up camp where their job demands.

As more companies offer remote work opportunities, increasing numbers of employees may also be presented with the option to choose where they want to live. That approach could be attractive to talented workers, but it also represents unique challenges for organizational culture-building and workplace design strategies.

So what are some forces driving this wandering trend? And how can workplace strategy and innovative office design respond in ways that deal with decentralization?


What Could Drive This?

For many people, a key driving force behind relocation will likely be the economic crisis. CNBC reported that in June, 30% of Americans missed their housing payments, a number that has been rising month-to-month. And in a recent survey of 2,000 American homeowners, 47% say they’re considering selling their home. Unfortunately, that’s because many are struggling to afford their mortgage. 52% of respondents felt a consistent concern about making their mortgage payments on time.


The economic crisis is not just impacting low-wage jobs either. With an extended economic decline of unknown length, many talented professionals and promising young talent are scrutinizing their budgets. In cities with high costs of living, such as Los Angeles, freelance and project-based workers in the gig economy are facing an especially precarious situation that could push them to new locations. According to a recent Wall Street Journal report, LA has the highest percentage of freelancers in creative fields of any of the 15 largest metro areas, and an unemployment rate nearing 21% as of April. Many freelancers WSJ spoke to in L.A. said they are considering leaving.


Where To Go?

Of course, most people, even those who could become globe-trotting “digital nomads,” will likely land on homeownership as a safe bet for personal finances. So where might they go?


One clue is coming from online real estate platforms reporting increased buyer demand in new directions in recent months. It’s what Zillow CEO Rich Barton is calling “the great reshuffling.” As he puts it: “It’s going to cause people to move to different places and work in different ways, and move in bad instances and good instances, and get vacation homes, because most people wish they were at their vacation homes right now.” Similarly, as noted in the Wall Street Journal, Redfin has reported stronger demand in places like Seattle and Austin, so-called spillover cities and tech hubs relatively more insulated from layoffs. They are also reporting higher interest in suburban home listings.


Many are looking at more remote and even rural locations, including farms. For example, Billings, Montana has seen a surge of home-buying interest, and realtors there noted that the increase is mainly driven by out-of-state residents, especially from California. Now, some home hunters are making their choices based solely on virtual tours.


And millions of Americans are also just moving back in with their parents, which will also drive relocation among young and emerging talent. A Zillow analysis claims that about 2.7 million adults moved in with a parent or grandparent in March and April of 2020. 80% of those adults are Gen Z, between the ages 18 and 25.


In response to these emerging trends, many smaller cities, sensing business development opportunity, are incentivizing remote workers to locate there, much in the same way their larger urban competitors incentivize businesses to relocate. Savannah, Georgia recently announced a $2,000 remote worker incentive program. “If a technology company opens a small office in Savannah, I’ve always been able to give that company relocation fees of up to $2,000 per person,” said Jennifer Bonnett, the vice president of innovation and entrepreneurship for the Savannah Economic Development Authority. “All we really did was disconnect the need for the company to move here.” A new Fast Company article cited similar programs for attracting remote workers in Tulsa, Vermont, Topeka, and Alabama.


Is It Good For Company Culture?

Not all companies can offer WFH on a permanent basis, but many can—and many more have learned they can in recent months. Still, just because a company can work remotely doesn’t necessarily mean it’s an optimal situation. Some companies will be fine with this arrangement and claim that it doesn’t matter where an employer is headquartered. But many more companies have developed organizational cultures not well-suited to this arrangement.

It’s been reported recently that Citigroup will offer WFH for the remainder of 2020. But while productivity is doing well at Citi, they recognize the benefits of working together in place. Citi has about 201,000 employees globally and calls itself an “apprentice” business invested in relationship-building. They are concerned about losing that equity. “People talk about the productivity gains and how efficient we’ve become in terms of working remotely — I don’t know, I’m not certain how that ages,” said Citi CEO Mike Corbat. “What I don’t want to do is find Citi in a place where we’ve actually hollowed out our talent in terms of the skills that we’ve given them.”

Many other company leaders have echoed these concerns that collaboration, informal relationship-building, mentorship, and other forms of social bonding are better accomplished in-person—at least from time to time.

What Does It Mean For The Future Workplace?

Considering the case of Citigroup alongside the companies more fully embracing remote work, we think the future of the workplace requires a strategic response customized to the unique needs of a given company culture. Contact Wolcott to talk more about exploring your options. In the meantime, here are a few examples of what comes next.

Satellite offices spread throughout the country could soon become more common. Unlike regional offices, satellites would likely be smaller and require a more flexible format. Consider one such opportunity in a recent Wolcott test case, with a Pop-Up Office fit inside vacant space for a mixed-use development.


Flexible work and living solutions could also suit the needs of some organizations. For example, the online rental firm Landing, launched in late 2019, offers flexible long-term living arrangements, including fully finished apartments without strict leases or security deposits. Landing’s CEO noted that markets outside of major metro work areas are now showing growth, with Texas making up 30% of total reservations in May, while reservations in Florida increased nearly 20%.

Programmatic change management could also provide an optimal balance of WFH and office visits, with shifting schedules based on workflow. To do this effectively, we would recommend a Work From Home solution that optimizes the home office for employees, similar to what we’ve proposed in a WFH package you can see here.

No single solution will fit all organizations. Some combination of these things will likely be the future of the workplace. Each organization is going to require a customized design solution based on their unique business needs. Wolcott is prepared to consider a strategy that is right for you.