By Michael Copp, Executive Vice President
I recently read an article by Derek Thompson (2020) with The Atlantic, The Workforce Is About to Change Dramatically, in which he shares what economist David Autor and MIT’s Elisabeth Reynolds assert about the impact of “the rise of remote work—or what they call ‘telepresence’—[leading] to a more homebound life that creates less work for others.” (Retrieved from the World Wide Web on August 11, 2020, here). Businesses negatively impacted by this trend exacerbated by the COVID-19 pandemic include commercial building leasing, hotels, restaurants, airlines, and other businesses within the hospitality and leisure sector. This will have a ripple effect on the plumbing and HVAC industries- especially with “less work for office buildings’ cleaning, security, and maintenance services” and impacting roughly 30 million employees with non-essential maintenance and construction being deferred. Thompson (2020) shares several interesting observations as a result of increased teleworking:
- Remote working weakens our connection to fellow employees and “the office.”
- Employees “may take on side gigs and even start their own companies”. “A new era of entrepreneurship may be born in America, supercharged by a dash of social-existential angst.”
- Employees who live in “expensive cities may use their freedom to move to cheaper metro [areas] where they can afford more space.” Contractors need to position themselves as an “Employer of Choice” through competitive salaries and compensation, company culture and values, company reputation, employee engagement and inspired leadership.
COVID-19 has arguably changed the way people work with each other and where they work. As a result, many companies are reassessing their office space needs due to safety concerns, insurance and cost savings. Lisa Minneci (2020) wrote in her article, The Impact of COVID-19 on Lease Planning and Management, “a Reuters analysis of “quarterly earnings calls over the past week (week of July 15, 2020) revealed that more than 25 large companies plan to reduce their office space in the year ahead, a move designed to reduce the second-largest expense after payrolls.” (Retrieved from the World Wide Web on August 11, 2020, here). Leasers and renters are now asking landlords for concessions and lease amendment options to include decreases in space and early lease terminations. Building owners should develop “what if” scenarios ahead of those conversations. Landlords are also seeking to renegotiate tenant improvement, janitorial and security contracts, and building maintenance agreements with less usage of their facilities and contractors limiting their employee onsite support to ensure their safety.
On a related note, RENTEC DIRECT provides online state guidelines that landlords might keep handy: https://www.rentecdirect.com/blog/ultimate-state-guide-coronavirus/.