The Office is Dead: What Now?

The Office is Dead: What Now?

Three Actionable Steps Leaders Can Take to Help Their Teams Thrive in This New Reality.

The workplace has been irrevocably changed by the pandemic. Years of working remotely have forever changed our relationship with the physical office, reshaping work into something we do, not somewhere we go. Yet office buildings of all shapes and sizes sit there, waiting. They have become a glaring expense line item that has been the true reason for most, if not all, of the return-to-office mandates.

In this blog post, I share some startling facts that underline just how dead the office is, specifically the emptiness, obsolescence, boredom, and overall lack of purpose associated with conventional office environments. More importantly, I propose three actionable steps leaders can take to help their teams thrive in this new reality.

Dead as in Empty

Offices are emptier than ever. Across Canada, the office vacancy rate is at an all-time high of nearly 18%. In downtown Toronto, the office vacancy rate is four times what it was before the pandemic and the numbers are expected to climb. Only one-third of leases scheduled to expire 2020-2030 occurred as of the end of 2022, meaning two-thirds of lease expiries are still to come.

Despite return-to-office mandates, mobile phone data indicates Canadian cities are only half as full of people during the workday compared to pre-pandemic numbers. The weekly occupancy rate in Toronto is averaging around 40%. Traffic patterns show that employees are returning TWT (Tuesdays, Wednesdays and Thursdays), with Wednesdays the peak occupancy at 61%.

Dead as in Obsolete

As office inventory grows, landlords, builders and investors are left with spaces that no longer meet the needs of a hybrid workforce. Businesses are increasingly looking for properties that are designed for flexibility, collaboration and offer a range of amenities to make the trip to the office “worth it”. What they are faced with are inflexible floor plans, ill-equipped meeting rooms, and rows of dated cubicles in urban office towers or suburban industrial parks.

Commercial realtors are seeing a huge trifurcation of office space. By 2030, some projections show 60% of office properties will be obsolete and 25% will be undesirable. Only 15% of properties will be highly desirable, and those will command premium pricing.

Dead as in Boring

Offices at their historic best were filled with teams of colleagues working side-by-side, attending team meetings, catching up over the water cooler, enjoying lunch together, celebrating birthdays, and grabbing a drink after work.

Based on the data, today’s offices are half-empty, out-of-date buildings filled with employees that have been mandated to be there. People are commuting to the office only to spend up to 4 hours a day on Zoom calls, surrounded by colleagues doing the same.

Dead as in Lacks Purpose

Business leaders have been fairly consistent in their stated benefits of return-to-office mandates. They believe there will be better communication, more creativity, and better productivity.

Two issues. The first is that the layouts and designs of conventional offices do not serve any of these purposes. The second is that communication, creativity, and productivity are more about ways of working than they are about going to a place.

What Now? 3 Things Leaders Can Do

1. Reassess WHY you want people in the office. Is it truly about communication, creativity, and productivity? Or is it because your company has real estate commitments? Be aware of the sunk cost fallacy, which is the tendency for people to continue investing in a decision or strategy because they have already invested resources into it, even if it’s not the most effective solution. Here at Sklar Wilton, we sub-leased our office when we determined it no longer suited our needs. We are now “mandating” employees to attend monthly meetings (we call them Bevys) that are designed around collaboration, connection, and celebration (our “3Cs”).

2. Think about HOW to design for the outcomes you want. Designing your physical office space to be more flexible and structured for collaboration is an obvious consideration, and likely worth the investment. The second element is designing meetings to be “can’t miss opportunities” for employee interaction. Here at Sklar Wilton, the content for our monthly Bevys is designed to deliver on our 3Cs and includes lunch and time for unstructured connections. These meetings didn’t exist pre-pandemic, and they have become a cornerstone of our thriving culture.

3. LEAD the change. If you have the ability to influence your company’s office policies, rethink blanket mandates that are forcing employees to work in empty, obsolete, boring spaces. If you need to work within those mandates, rethink how and when your team(s) come together. What might the desired outcomes be, and how will you lead those meetings or design those days? At Sklar Wilton, we have teams dedicated to planning and executing our monthly Bevys. Our leaders show up, lead the content, and actively engage in connection time.

By being purposeful about both why and how you show up IRL, you have an opportunity to breathe life into offices that are otherwise dead.

About the Author

Debra Kavchak-Taylor is a Partner at Sklar Wilton & Associates. She is passionate about driving brand growth and empowering others to reach their full potential. With strategic thinking, a love of data, and the ability to simplify complex issues, she brings clarity to challenging situations. Outside the office, Debra loves laughing with family and friends and working with her non-profit organization.

Looking for more on this topic? Read our blog on The Future of Work.

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