Future of Work Might Require Rethinking Office Location

Your Team Members Hate Commuting More Than They Love Your Office

The last few years have ushered in a seismic shift in how we work. Remote and hybrid options have become more popular with employees. Yet many bosses continue trying to lure, cajole and order remote workers employees back to the physical office.

However, new data shed light on a critical factor that can make or break this transition: the ease of commuting. A whopping 53.2% of workers cited traveling to and from work as a key factor in their attitudes toward the return-to-office movement.

According to the U.S. Survey of Working Arrangements and Attitudes (SWAA), other top factors included quality of office space (58.8%) and equipment in the office (52.3%). I addressed those issues in an earlier blog, so let’s focus on those nightmare commutes.

The Staggering Costs of Driving In … and Back Home

Even the best work environment cannot compensate for hours spent fighting traffic. No wonder so many prefer hybrid work models or fully remote gigs.

One recent study concluded that the average American commuter spends $8,466 each year. Another analysis pegged the annual cost at $5,725. And the hundreds of hours spent on the road equate to weeks of vacation.

This makes return-to-office mandates difficult for business leaders with offices in major cities. Many in the U.S. lack adequate public transportation.

In sprawling cities like Los Angeles, Atlanta and New York, distant suburbs are the norm. That forces workers to choose between housing they can afford or a manageable commute.

Worst Commutes in the U.S.

According to U.S. News & World Report, the top 10 worst commutes in the United States are:

New York City
Stockton, California
Washington, D.C.
San Francisco
Vallejo and Fairfield, California
Atlanta
Chicago
Boston
Los Angeles
Modesto, California

Outside of New York, Boston, Chicago and (depending upon whom you ask) San Francisco, many of these cities have limited public transportation options. All are notorious for traffic congestion and long commute times.

Decentralized Offices Can Support Hybrid Work

As a business leader, you’re facing a stark reality. The traditional centralized, downtown or midtown office may no longer be viable.

It certainly isn’t attractive. Big tech is downsizing office space. Office loan defaults are near historic levels, and U.S. office vacancy rates have skyrocketed.

The Wall Street Journal pegs it at a record 13.8%, compared with 9.4% at the end of 2019. San Francisco’s office-vacancy rate was an ugly – and record – 36.7% in Q1 2024.

And your employees do not care. They prefer remote work, hybrid work, anything but spending hours in a car, bus or train.

Do you want to continue to compete in the battle for talent? If so, insightful leaders must rethink their approach to office locations. It could be time to embrace a more decentralized strategy that can keep your employees engaged.

Consider whether you can relocate offices closer to where employees live. Many commuters are heading in from suburbs. Many suburbs have office parks with adequate space.

Smaller satellite offices dispersed across different neighborhoods can curtail commutes. You also could save money on expensive downtown real estate.

Alternatively, companies could explore flexible office arrangements, such as renting conference or hotel spaces periodically for in-person meetings and collaboration. This approach allows for a hybrid model. Most full-time employees will work from home most of the time. Then they can gather in a centralized location when necessary, minimizing the need for daily commutes.

Learning from Ski Resorts and the Company Town

Even smaller communities are having troubles. Ski resorts have faced the issue for years. Stories abound about workers who quit their jobs after discovering that 90-minute commutes cost more than they earned.

It has gotten so bad that some resorts are stepping into the housing game. Ski magazine had a great rundown about five initiatives.

Winter Park, Colo., opened a 330-bed mix of studios and single units in December 2023. The modular construction effort was a collaboration between the community, town officials and the resort. Building on ski resort property dramatically lessens commutes.
Slopeside Village opened last year in Park City, Utah. Double-occupancy rooms start at $400 a month. Two- to four-bedroom options are about $1,000 a month, with townhomes reaching $3,000 a month.
Palisades Tahoe, Calif., is leasing campsites for employees who have RVs and vans. The ski resort also bought two hotels in spring 2023.
Saddleback Mountain, Maine, opened a workforce housing complex in November 2023. The resort aims to offer housing for nearly all employees, a true rarity.
Mammoth Mountain, Calif., bought and repurposed a hotel. The Sierra Lodge can house up to 72 resort employees.

Perhaps the company town is coming back. Last year, Elon Musk and Meta announced plans to build a town and village, respectively, for employee housing. This Harvard Business Review article has the details.

Not every company can rent campsites, buy hotels or build dormitories.

But insightful leaders can get creative.

Is that downtown high-rise that important? What about your return-to-office policy? If so, you rent hotel rooms a few nights a week. Or offer rental assistance, down payment subsidies and support policies that increase affordable housing.

Embracing the Reinvention of Work

If you want to retain top talent in an era with a “we can work from anywhere” ethos, you likely will have to tackle the commuting challenges.

Commuting is costly, time consuming and wasteful.

Companies that fail to adapt risk losing their best employees. Rethink office locations. Embrace decentralized or flexible work arrangements. Get creative and actually consider where your employees live.

Insightful leaders will not only alleviate the commuting burden, they will foster a more engaged, productive and satisfied workforce.

That is the path toward long-term competitive advantage and profitable growth.