For the world of tech talent, times have changed.
“In 2022, the world adjusted to new ways of working, and many companies experimented with new and exciting technologies to optimize the workplace,” wrote Chase Garbarino chief executive of HqO, in the workplace experience company’s annual report. “In 2023 … the latest data tells us that many employees are dissatisfied with their workplace environments and are resistant to return to the office, despite more and more companies demanding it.”
As a result, he expects to see strong investments in workplace technology continue. Deloitte’s 2023 CRE Outlook Survey found, for example, that 48% of commercial real estate CFOs will look to increase their spending on technology in the coming year, with many planning to increase that spending by 5% or more.
“As industry leaders consider adding workplace experience technology as part of their increased technology investment, they’ll have to make sure that they’re choosing the right technology to meet their business needs, especially in today’s challenging economic climate,” notes Garbarino in HqO’s annual edition of “The State of the Workplace.”
In 2023, corporate real estate leaders continue to make investments in workplace experience but “under radically different economic conditions,” the report suggests. While office occupancy rates, for example, have largely rebounded from mid-pandemic lows, today’s rates are still significantly beneath their pre-pandemic levels.
Covid Killed the Five-Day Office Week
80% of companies now operate in a hybrid work setting, according to Gartner data. This is one area where a return to pre-Pandemic levels is not expected. It is predicted that by 2025, fewer than 5% of desk workers will prefer to work from a corporate workplace full-time—a paltry figure with a downward anticipated trajectory from an already dismal 17% recorded mid-Pandemic in 2021.
Gartner projects that the frequency of five days per week in-person work will continue to fall. This reasonably safe bet corresponds with data from Leesman and other industry sources, which have widely registered the falling prevalence of full-time in-person work.
Combined with a relatively slow pace of post-COVID recovery in other areas, this shift “has led some in the industry to alter their long-term business plans,” according to the report.
“Hybrid work has changed the nature of our workplaces more than anything else since the invention of the internet,” Ryan Wong, CEO of Vancouver-based tech unicorn Visier, posited last year.
Wong’s statement holds true even in major Canadian hubs such as Visier’s hometown, where the downtown core has long served as the vibrant pulse of the city, especially within tech. Vancouver houses the broader region’s “greatest pool of educated employees and is located at the cross-section of capital flows,” according to a report from Avison Young. The city boasts the highest tech-job growth in North America over the past decade, according to CBRE.
And yet little there remains the same as a few years ago. A full recovery to the “old normal” appears unlikely at this point.
“With different-sized tenants adopting a range of strategies … Downtown Vancouver is now in a state of flux,” stated last year’s Technology Occupancy Insights report.
Being in a state of flux is not inherently bad, suggests Garbarino, who believes some change is necessary to optimize the next generation of workspaces.
According to HqO, the critical takeaway is that “office space isn’t necessarily being used less— it’s just being used differently.”
“The importance of these built amenities will continue to change as the workforce itself changes,” the report affirms, which further projects that a vast majority of millennial workers will come to prefer hybrid work over full-time office work or remote-only work. 61% already feel this way, according to data from Gartner; it is estimated that over three-quarters will agree by 2027.
“Hybrid employees might be working from your office on a given day—but they might also be working from home, from a coffee shop, or from another place entirely,” the report notes. “This means that the needs of hybrid workers are both highly-individualized, and highly susceptible to change.”
It’s a complex web that each company needs to untangle with the help of workplace experience professionals, modern technology, and above all: the feedback of their own staff.
Operate Remote founder Shauna Moran was prescient in 2021 to pinpoint the hybrid work model as the future. Even then, Moran foresaw challenges many contend with today: “For the hybrid model to succeed, it’ll require some changes and effort from both management and employees,” she warned TechTalent.ca.
It doesn’t have to be a tug-of-war, though. Moran and others frame the ideal outcome as a win-win for both employers and their staff.
The Other Impact
Hybrid work is a boon overall but we cannot discuss pros and cons exclusively in terms of people.
The impact on physical office space cannot be understated. As the ghost of the pandemic recedes, North America grapples with a growing number of deserted office spaces—a trend that threatens to hollow out downtown cores, which often function as the heart and soul of a city.
It’s a problem, which means it’s also an opportunity.
Developers are converting unused offices in downtown cores into mixed-used, residential-based buildings that increase housing supply and restore neglected urban neighbourhoods. By responding to the supply and demand of the post-pandemic market, developers are helping to reshape city cores around the hybrid workforce.
Collaborating with global construction giant DIRTT, for example, Alberta-based Arthrotó launched this year as a natural reaction to high residential housing costs beside devalued commercial spaces.
Arthrotó intends to strike partnerships covering a gamut of aspects, from prefab interior structures to building information management systems, smart home tech, and AI-powered design tools.
“The launch of Arthrotó marks a groundbreaking evolution in the housing industry as we strive to repurpose underutilized office spaces into thriving residential and mixed-use communities,” says Doug Hayden, founder of Arthrotó.
Founded in 2021, Calgary’s Peoplefirst is also part of Canada’s emerging movement toward converting unused office space into residential units ready for occupation.
The company partnered with Vancouver fintech addy to fund The Cornerstone, a 10-story, 129,000-square-foot office building. It is set to undergo conversion into 112 two- and three-bedroom residential units with co-working and retail space.
Imagine if you will an old office building converted now to a residential building in which former office workers perform their tasks from their new apartment or the attached co-working space. Think about it—the same work is happening on that same plot of land, but it’s virtually unrecognizable from a typical setup pre-Pandemic.
It’s just one way which knowledge economy work has altered forever.
