Execs Spend Tens of Millions to Avoid Remote, Hybrid Work
Have developers discovered the secret sauce to luring workers back to the office?
Some think so. The Wall Street Journal explains how offices from Manhattan to New Jersey to California have increased occupancy rates by investing in amenities. Gyms, tenant lounges, arcade games, ping-pong tables, sky decks, concierge services and more abound.
So, let me get this straight. Executives worry that remote workers aren’t productive enough, despite numerous studies that say otherwise. But forcing employees to commute to the office and letting them play ping-pong makes them more productive.
That doesn’t compute for me. But obviously, it does for others.
NFL Games and Movies Add to Office Appeal
One office tower in Midtown Manhattan has a Michelin-star chef’s restaurant and outdoor space. The site is fully leased. Another office near Los Angeles includes a sky deck, concierge services and recessed balconies. The New Jersey building sports a movie theater, golf simulator, fitness center and other swank enhancements.
But they have invested big, The WSJ’s Peter Grant reported.
Beyond the $38 million American Equity Partners paid for the New Jersey office tower, the company forked over $20 million for renovations. The payoff is a fully leased building while neighboring offices struggle with high vacancy rates.
But the three sites discussed above also have other attractions: The old real estate maxim of location, location, location.
Many people still covet the Midtown Manhattan lifestyle or the Southern California vibe. Although New Jersey does not sound attractive, 1 Tower Center is near millions of workers and just off the New Jersey Turnpike.
It’s also near MetLife Stadium, home to the NFL’s New York Giants and New York Jets. Yes, I know both teams are near the bottom of their respective divisions. But it’s still the NFL.
And if you’re a music buff, The Rolling Stones, Travis Scott and Taylor Swift have all performed there. English rockers Oasis will play MetLife next year, part of their first tour since 2009.
Football games and concerts certainly add to 1 Tower Center’s appeal.
HCLTech, one tenant at 1 Tower Center, has a 75-person suite on the 50-yard line. I’m sure other tenants have blocks of seats as well. As an HCLTech executive told the newspaper, “All of our clients love to fly from distant locations to experience the suite and stadium.”
Distractions Do Not Increase Productivity
So, you only need a few things to fill office space these days. A prime location, tens of millions of dollars in renovations and maybe easy access to concerts and pro sports.
Well, just in case you don’t know, real estate in Manhattan, Los Angeles County and near NFL stadiums does not come cheap. Neither do concert tickets, nor NFL suites.
You know who pays those high rents, extra amenities and added costs?
You. The business owner.
Yes, the occasional get-together at a topnotch event can go a long way. In fact, at this year’s annual Tompkins Ventures retreat, we enjoyed dinner and a Carolina Hurricanes hockey game at the then-PNC Arena. (Dinner was great. Let’s not discuss the hockey game’s final score.)
But that was a one-off event. Although important for company culture, it did not cost Tompkins Ventures a yearlong club level suite above center ice.
So, I have three takeaways from The Wall Street Journal story:
1. We are in a new era. More businesses are paying attention to every expense, including overhead. All those amenities and extras are just that, extra expenses.
2. The story did not quote a single front-line worker. No employee feedback. It relied on executives and the owners of said office spaces. How do employees feel about coming back to the office?
3. If you’re so worried about remote work productivity, why do you fill your office with distractions like movie theaters and golf simulators?
Hybrid, Remote Still Beats Returning to the Office
In general, if you hire good workers, give them solid direction and show you trust them, they won’t abuse the privilege of working remotely.
I have four years of experience with Tompkins Ventures to back that up. When people work at home, maybe they take a break to go load laundry. Or empty the dishwasher. Walk the dog.
Unless your workers are single and more interested in socializing than working, all those amenities add up to extra expenses. And I don’t care how well I multitask, if I’m playing golf, I’m getting precious little work completed.
For most people, jobs aren’t their lives. They may love their work, even adore their boss. But at the end of the day, they want to go home to their family, no matter their work environment. Or head out on the town with their friends – who don’t have to be business acquaintances.
Hybrid workplaces and remote arrangements allow for that. Working in an office five days a week does not.
Look, I’m happy for those office owners who have invested wisely and filled their buildings. Particularly when many commercial office conglomerates are struggling to avoid foreclosure.
But return to office mandates cost big.
While lavish office amenities may seem like an attractive solution to the “back to office blues,” they often miss what truly matters to employees. The focus on ping-pong tables and sky decks overlooks the fundamental benefits of remote and hybrid work arrangements: flexibility, work-life balance and trust.
Instead of pouring millions into office perks, companies would do well to invest in creating flexible work environments that help their employees be productive wherever they are.
The future of work isn’t about luring people back to physical spaces with arcade games and flashy distractions. The future of work is about adapting to a new paradigm where work fits into life, not the other way around.
Related Reading
- Individualism, Living Space Affect Remote Work
- Refirement Beats Retirement Any Day
- Future of Work Might Require Rethinking Office Location
Jim Tompkins, Chairman of Tompkins Ventures, is an international authority on designing and implementing end-to-end supply chains. Over five decades, he has designed countless industrial facilities and supply chain solutions, enhancing the growth of numerous companies. He previously built Tompkins International from a backyard startup into an international consulting and implementation firm. Jim earned his B.S., M.S. and Ph.D. in Industrial Engineering from Purdue University.
“This is exactly what I was looking for, thank you!”