Investing in people not buildings has never been more pertinent than the present fall-out of the Covid-19 pandemic. Not only have office buildings been less accessible due to shut-downs, travel restrictions, and hygiene concerns, but virtual working has proved more effective than many would have dared to anticipate. Very large companies, as well as many small to medium size ones, have chosen to extend some virtual working arrangements for employees indefinitely. Many are re-evaluating their commercial real estate portfolio and creating strategies which have a much greater component of virtual working. The main reasons for this being (a) virtual working can be effective, (b) technology has enabled more virtual working, and (c) virtual employees can obviously be located anywhere with reduced overheads.
The three examples below highlight how companies are investing in people not buildings:
- Build your talent pool
The pandemic has resulted in significant job losses across the world. Not in every industry, but some sectors have been very badly hit. Taking decisions to rationalize the workforce, retaining those who have most potential to win back business, and investing in employee development for remote working, are all strategies that companies are investing in. Organizations should always have a lean employee population, all of whom add definable value to current and future successful performance.
Corporations have had to make tough decisions about lay-offs and furloughs. While many of these decisions have accompanying stressful personal implications, they are primarily made with survival and organizational health in mind. With the increasing effectiveness of virtual working, the reduction in employees can be mirrored by a smart real estate strategy. This is sometimes not achievable swiftly, mainly because of lease clauses or just because disposing of real estate is very difficult in the current climate. But organizations can and should be shifting the balance of cost from real estate to value-adding employees wherever possible.
- Cost effective & flexible
Not every role is possible to carry out remotely. But many are. The cost of engaging remote employees is more attractive than providing office space for them. I would add that managing remote employees requires a specific skillset that is different to office-based supervision. Managers need to be much more proactive in connecting with their team members, ensuring they have the right skills and training for remote working, establishing networks and collaborative opportunities, and proactively engaging employees who are experiencing remote working challenges in abundance.
Hiring remote workers provides a great deal of flexibility in building the skill-base of any organization. Re-imagining compensation options for remote workers is also an opportunity to change things up, e.g. they do not need commuting assistance, or staff restaurants. But considering how remote employees access stationery, copying, and office furniture for home use, all provide an opportunity for HR departments to use their imagination. There is also the significant reduction in the cost of services (electricity, etc.) for organizations who reduce their real estate footprint.
- Fuel your strategy
People strategy should never just be a short-term reaction to an external event. The opportunity for more strategic planning with an increasingly remote workforce means that a more inventive people strategy can be considered. The overheads of investing in buildings can be replaced by the investing in people. Not only from a skills perspective, but from a resource type and location perspective. Strategically, is it better to consider a more flexible mix of permanent, interim, contract, consulting, and on-shore/off-shore resources?
The presence of global pandemics can only fuel the advance of AI and other forms of automated services/manufacturing. But some industries rely heavily on buildings in which to build products, hold inventory, or deliver services. For jobs that do not require presence in a building provided by the employer, remote working opens up many diverse strategic possibilities.
Investing in people not buildings is smart. But a world without buildings which house corporate employees is hard to imagine. I also do not know if the world-at-large is ready for the wholesale psychological impact of permanent remote working at scale. But if you are looking to buy or renovate a house, make sure you have a home office!