WORKFORCE WORKPLACE WORKFLOW POST PANDEMIC
A Strategy Brief APRIL 22, 2020
Global Knowledge Center
workforce, workplace, workflow post-pandemic
GLOBAL KNOWLEDGE CENTER
a strategy brief
All information contained in this publication is derived from sources that are deemed to be reliable. However, Newmark Knight Frank has not verified any such information, and the same constitutes the statements and representations only of the source thereof, and not of Newmark Knight Frank. Any recipient of this publication should independently verify such information and all other information that may be material to any decision that recipient may make in response to this publication, and should consult with professionals of the recipient's choice with regard to all aspects of that decision, including its legal, financial, and tax aspects and implications. Any recipient of this publication may not, without the prior written approval of Newmark Knight Frank, distribute, disseminate, publish, transmit, copy, broadcast, upload, download, or in any other way reproduce this publication or any of the information it contains. This document is intended for informational purposes only and none of the content is intended to advise or otherwise recommend a specific strategy. It is not to be relied upon in any way to predict market movement, investment in securities, transactions, investment strategies or any other matter.
The COVID:19 Pandemic is resulting in the shutting down of travel, necessitating social distancing, and bringing to a grinding halt everyday transactions dependent on foot-traffic and face-to-face interactions. Life will go on but it may not be business as usual.
All businesses and every industry in the United States, as elsewhere, could face extreme hardship as a bullish economy is brought to its knees in less than a month. This strategy brief outlines immediate, mid-term, and long-term considerations to manage a company’s workforce, workplace, and workflow and their downstream impact on real estate.
01. Executive Summary
02. The Pandemic Trajectory
03. The economic fallout timeline and scenarios
04. The New Normal
05. Workforce
Contents
06. Workplace
07. Workflow
08. Summary insights
All businesses and every industry in the United States, as elsewhere, are facing extreme hardship as a bullish economy has been brought to its knees by a pandemic in less than a month. This strategy brief outlines immediate and long-term considerations to manage a company’s workforce, workplace and workflow and their collective downstream impact on real estate.
The COVID-19 Pandemic is resulting in the shutting down of travel, necessitating social distancing and bringing to a grinding halt everyday transactions dependent on foot-traffic and face-to-face interactions. Life will go on, but it may not be business as usual.
EXECUTIVE SUMMARY
Workforce
Workflow
“New Normal”:
Workforce: A human resource that is full-time or on contract, on site or remote, in production or in services.
Job losses and unemployment
Accelerating automation
Contract workforce
Distributed workforce
Workplace: The space and environment where the workforce engages with one another and with furniture and equipment to achieve a common purpose.
Remote working as a norm
Collaboration and interactions in a changed workplace
New relevance of co-working
Health, wellness, and hygiene in the workplace
Converging trends: electric and autonomous vehicles workforce
WorkfLOW
Workflow: Processes and methods of work that may include desk work, supply chain and logistics, or manufacturing and production.
Technology for remote and distributed working
Realignment of supply chains, production and logistics
Change in travel protocols and priorities
Workplace
WorkfORCE
The trajectory of virus spread in U.S. remains steep and allowing pre-pandemic level of human interactions too hastily to boost the economy may impede stopping the spread. The medical community recommends an extended lockdown to flatten the curve.
The COVID:19 Pandemic is resulting in the shutting down of travel, necessitating social distancing, and bringing to a grinding halt everyday transactions dependent on foot-traffic and face-to-face interactions. Life will go on, but it may not be business as usual.
THE PANDEMIC TRAJECTORY
Total Reported Cases (Cumulative)
Total Reported Cases (Cumulative) per 1m PopulatioN
Source: Johns Hopkins University Center for Systems Science and Engineering, data as of 4/13/2020
Germany
China (Hubei)
Italy
France
US
Spain
The trajectory of virus spread in US remains steep and allowing pre-pandemic level of human interactions too hastily to boost the economy may aggravate stopping the spread. The medical community recommends an extended lockdown to flatten the curve.
Technology for remote and distributed working Realignment of supply chains, production, and logistics Change in travel protocols and priorities A.I. tools for the new worker
South Korea
China (Total)
USA
Iran
The scientific experts warn that the trajectory of virus spread may become more steep if authorities allow pre-pandemic level human interactions too hastily to boost the economy
The medical community recommends an extended lockdown to flatten the curve
Total Reported cases
China and South Korea report a slow down in new coronavirus cases three weeks after the first 100 cases had been reported. In the United States, the reported cases are most likely underestimating the actual epidemic as there has been a shortage of test kits. Upon wide availability of testing, there is likely to be a surge in new reported cases.
The pandemic trajectories
Countries that have responded to the pandemic with a strong resolve by shutting down most social contact while isolating those who have been infected, have achieved the most success in containing the spread and appear to be emerging from the worst of it. China, the epicenter of the pandemic, managed to contain and stop the spread of the virus only after they had locked down all urban centers, severely restricted the movement of their citizens, and suspended most economic activity. This was accompanied by widespread testing, isolation of the infected and exposed individuals, and setting up of pop-up medical facilities to treat the surge in infections. South Korea and Singapore are the other countries that have followed strict physical separation of their populations early in the cycle, and as a result, have kept new cases within manageable limits. As a result they have gradually begun to open their economy and commercial activity.
Given the delayed public health response of the US Federal Government and the wide-ranging responses of different state governments, the United States is on a steeper trajectory compared to most other countries; however, the U.S. is seeing improvement as 92% of American population has been observing social distancing, according to Gallup survey.
The pandemic trajectorY
Italy, Spain and the United States are on a steeper trajectory of new cases than other countries with strong centralized responses as testing has not been made available on a wide scale and respective governments have been comparatively slow to acknowledge, recognize and respond decisively to the crisis.
As the Federal Government has left the public health response to the states and there is still movement of people between states, the setting is created for a possible explosion of new cases that would take longer than it has taken China or Italy to bring under control. Also, different states will peak at different times, dragging out the recovery timeline.
The reaction to the coronavirus pandemic has not been even across the United States as the spread was initially largely confined to cities in Washington State, California, and New York. New cases have now been reported in all states and some states have invoked an emergency but heavy handed lock-downs are yet to come.
Italy had followed a path of slow response and had not made test kits available in large enough numbers to get a realistic estimate of the extent of the epidemic. As Italy suffered fatalities exceeding those of China’s, their government responded with extreme measures, shutting down cities in the north and then extending the lockdown to the rest of the country. Since it was always behind the trendline of the spread of the disease, its healthcare system got overwhelmed. Given the delayed response of the Federal Government and the wide-ranging responses of different state governments, it appears that the United States is on the same trajectory as that of Italy and may eventually have to resort to extreme measures before its healthcare system becomes overwhelmed. As the Federal Government has left the response to the states, and that there is still movement of people between states, it could lead to an explosion of new cases that would take longer than it has taken China, South Korea, and Italy to bring the situation under control.
Italy and U.S. similarities
The United States is fast becoming the epicenter of Covid-19 and is on track to overtake Italy in the acceleration of the pandemic and catch up with China in the scale and scope of the spread of the epidemic. There is a fundamental disagreement between the scientific-medical community and the politicians over how much social isolation is merited and how quickly should person-person proximity be given a green light with the view to restart the economy.
Comparing countries and their responses
On most indicators of push for normalcy, the United States stands alone, falling behind every major affected country except on the desire to reopen markets and workplaces. Since there is a severe economic cost to social distancing, there has been a resistance on the part of the administration to a total lockdown and shutting down of economic activity even for a few months. Countries that implemented a timely lockdown along with adequate testing and monitoring have fared much better and are slowly ramping up their economic activity.
Timely commitment to a total lockdown
Implemented a total lockdown
Availability of adequate Coronavirus tests
Current capacity to manufacture medical supplies
Early alignment between scientists and politicians
Keen to relax constraints to reopen the economy
Fiscal stimulus and monetary policy to speed up recovery
Available Universal Health Care
Canada
Mexico
Deaths
Total Cases
Average Daily % Growth Cases (last 5 days)
Days Since First 100 Cases
Mortality Rate
Health Expenditures per capita (USD, 2016)
Health Expenditures as % of GDP (2016)
Singapore
UK
Grmany
The United States vs the rest
Countries that have responded to the pandemic with a strong resolve by shutting down most social contact while isolating those who have been infected have achieved the most success in containing the spread and appear to be emerging from the worst of it.
Test per 1m Population
Cases per 1m Population
54,881
965,785
3.5%
54
5.7%
9,870
17.1%
16,920
2,952
2,661
47,145
3.7%
46
5.6%
4,458
10.5%
19,092
1,272
1,351
14,677
11.2%
38
9.2%
462
5.5%
536
116
23,190
226,629
2.1%
56
10.2%
2,390
9.0%
28,813
4,853
26,664
197,675
1.4%
63
13.5%
2,739
8.9%
29,085
3,271
5,976
157,770
1.2%
3.8%
4,714
11.1%
24,994
1,902
20,794
154,037
3.4%
52
3,958
9.8%
10,075
2,317
12
13,624
8.4%
57
0.1%
2,462
4.5%
21,595
2,416
4,512
68,128
0.0%
98
6.6%
398
5.0%
-
1,135
372
13,441
3.9%
65
2.8%
4,233
10.9%
1,178
106
243
10,738
66
2.3%
2,044
7.3%
11,652
208
Japan
Sources: Johns Hopkins University Center for Systems Science and Engineering, data as of 4/16/2020 World Bank, countries’ government websites, https://www.worldometers.info/coronavirus/
High
Low
Medium
Alignment between scientists and politicians
Relaxing medical constraints to reopen the economy
Recession could be deep and extend well into 2021
Average Daily % Growth (last 5 days)
Days Since First 100 Infections
China
250,000
0
Total COVID-19 Cases
500,000
FIRST ScenariO
Q2 2020
Growth of unemployment due to dampened economic activity. Delay and differences between states in planning for reopening the economy.
Slow restart for some sectors of the economy along with the curve flattening out.
In the event of a second wave and unpreparedness of the U.S. healthcare system: recession is expected to be deeper and longer, stretching to or beyond Q1 2021.
Q1 2020
SECOND Scenario
Recession may be shorter lived and not as deep
There are two scenarios:
Q4 2020
Q3 2020
Due to a pro-active lockdown, the virus could be contained sooner, with far fewer fatalities. Economic activity could re-start gradually in Q2.
Economic activity still below pre-pandemic levels due to maintaining some of the lockdown measures.
In the event of a second wave and effective response by healthcare system: reduced negative economic effects and faster recovery.
Delay reopening of economy
Coordinated Lockdown + Extended Social Distancing
Second Scenario
Policy Emphasis on Economic Recovery
Limited/Ad Hoc Lockdowns
USA 667,801
First Scenario
How long will it take?
Warnings from the medical community indicate that we may have more than a million cases in the United States at our peak. Scientists predict a possible second wave of the pandemic that will be less devastating but may drag the recovery out to 2021. There could be several rebounds if the economy is opened without adequate availability of tests and a cure.
Source: Global Knowledge Center Research, data as of 4/16/2020
COVID-19 cases grew rapidly in largest metros with increasing fatalities. The U.S. healthcare system was overwhelmed due to unavailability of tests and medical equipment.
The economic fundamentals are strong but due to social distancing large parts of the economy, like food service, hospitality, tourism, air travel, retail etc. have come to a grinding halt. However, the scientific community and the WHO are warning that without adequate testing and isolation of the infected, returning to pre-pandemic level social contact and physical proximity is likely to lead to an explosion of new Coronavirus cases, and as a result, higher mortality. It could also overwhelm the health care system, expose health care workers to the disease, and result in a worse recession than currently expected. The lack of alignment between the politicians and the scientists has created uncertainty that is delaying decisive action in either direction. The politicians have acknowledged the impact on certain industries as well as hourly and gig workers and a possible long-drawn recovery process and have passed a $ 2 Trillion stimulus package.
There is a conundrum that the US government has been unable to solve. It has presided over remarkable economic growth and low unemployment over the last three years just to see it all crash in less than a month due to a pandemic. In an election year it is quite understandable that the government would want to put the economy back on track.
Stakeholder differences
Key variables
The extent and timing of a coordinated nationwide restriction on movement and physical proximity Testing of symptomatic individuals and contact tracing to isolate the extended chain of individuals Availability of a vaccine that makes the virus endemic to our population and limits mortality Economic stimulus and rescue packages to stem mass unemployment, ensure business continuity and commerce, and create access to healthcare irrespective of insurance or socioeconomic status
The Scientific and Medical Community
The US Government
The World Health Organization
Aligned with the scientific and medical community of the US in prioritizing saving lives over avoiding a recession
Advising the US Government to correct course and address health and mortality first and make plans for a slower but managed economic recovery
Focusing on saving lives and treating people while keeping the healthcare system from being overwhelmed
Advising strict social distancing and coordinated lockdown if necessary to prioritize saving lives over a quick economic recovery
Focusing on getting the economy back on track
Disinclined towards lockdowns and social distancing that are causing job losses and a sudden and possibly deep economic recession
The extent and timing of a coordinated nationwide restriction on movement and physical proximity. Testing of symptomatic individuals and contact tracing to isolate the extended chain of individuals. Availability of a vaccine that makes the virus endemic to our population and limits mortality. Economic stimulus and rescue packages to stem mass unemployment, ensure business continuity and commerce and create access to healthcare irrespective of insurance or socioeconomic status.
Aligned with the scientific and medical community of the U.S. in prioritizing saving lives over avoiding a recession.
Advising the U.S. Government to correct course and address health and mortality first and make plans for a slower but managed economic recovery.
Focusing on getting the economy back on track.
Disinclined towards lockdowns and social distancing that are causing job losses and a sudden and possibly deep economic recession.
The Scientific and Medical CommunitY
The U.S. GovernmenT
The U.S. Government
The World Health organization
The World Health OrganizatioN
The US GovernmenT
Questions being asked by corporate leaders:
What will happen to the way we work?
How will companies consider location strategy to distribute their risk and access the best talent across the world?
How will our workplaces change after we have survived this event?
Will the jobs that are lost during the coming recession be regained?
We have more questions today than answers because of the pace of change that has been foisted upon us by the COVID-19 pandemic. With forced isolation, what was the norm only a few weeks ago is now being viewed both with suspicion and longing. If we continue our isolation for an extended period, not only could it have dire economic impacts across industries, it could also change some of our everyday work habits. Fear and inertia would battle innovation and flexibility in boardrooms to determine how we manage risk and prepare ourselves for the “New Normal” in the post-pandemic era. One thing is certain – things will not be the same.
the New Normal
Will forced remote working change our habits and cause a cultural shift?
Return to respective workplaces will depend on isolating those who have contracted the virus and allowing only those who have been confidently cleared of the virus or confirmed with immunity. This will be possible only when there is widely available testing and a vaccine. Physical proximity, greetings, group meetings and collaboration at work will be affected as we learn new ways of workplace hygiene and new protocols of interaction. Some of these habits may become ingrained in our culture. Technology will be key to allow us to work remotely and access goods and services with low-touch solutions. Travel may not be the same again and may not return to pre-pandemic levels for quite some time. Airlines may be compelled to provide masks, gloves and health screening before boarding to reassure their customers. Airlines may have to lower the density of seating or reduce the number of passengers per flight. This is likely to make air travel more expensive. Sensitivity to all sources of risk is likely to increase even if nothing else except the pandemic changes. Other areas of concern such as climate change, natural disasters, supply-chain concentration and political stability will also come under greater scrutiny. However, we may return to our pre-pandemic ways of work, leisure and travel if reliable testing and a cure is made available and the virus becomes endemic to the human population, if not eradicated.
How some things could change for the long term:
We recommend urgent and immediate scenario planning and options-based strategy development to determine the sources of risk, extent of those risks, and alternatives that define tradeoffs for different scenarios. It is critical to know what the available real options could be in the post-pandemic reality and how those options could be valued. Areas of focus in this brief are the 3 W’s : WORKFORCE WORKPLACE WORKFLOW We have constructed this framework to assess problems, analyze information and develop solutions for our clients.
Forces and trends that will shape the new normal
The extent and timing of a coordinated nationwide restrictions on movement and physical proximity Testing of symptomatic individuals and contact tracing to isolate the extended chain of individuals Availability of a vaccine that makes the virus endemic to our population limiting mortality Economic stimulus and rescue packages to stem mass unemployment, ensure business continuity and commerce, and access to healthcare irrespective of insurance status
WorkFLOW
Workers who need face-to-face interaction and in-person presence to do their jobs may be out of work for 2-3 quarters
After the financial crisis of 2008, companies automated aggressively, which replaced many jobs, and that is quite likely to happen again
To manage risk and increase flexibility, companies may opt for a larger proportion of their workforce to be contractors
Distributed workforces across geographies is likely to become a more acceptable practice
Companies will invest more in technology for remote and distributed working
A redesign of supply chains, production and logistics is necessary to avoid disruptions
Change in travel policies is likely as companies become more prudent about their employees’ safety
Forced remote working today could make corporate leaders more comfortable with the practice and continue with it
Reimagined coworking may be a companion piece to the remote working solution as companies accept distributed working
Collaboration and interactions in the altered state will impact protocols, culture and design
Health, wellness and hygiene in the workplace will become a priority
Converging trend: electric and autonomous vehicles may aid distributed working workforce
THE 3 W’S IN THE NEW NORMAL
WorkForce
WORKFLOW
WORKPLACE
WorkPlace
A near total and sudden shutdown of travel and an unprecedented level of physical isolation has negatively affected the airlines, hospitality, restaurants, retail and their suppliers.
WORKFORCE
Unemployment claims for state benefits skyrocketed from 219,000 in February 2020 to 6.6 million toward the end of March, which is the largest number of claims in a single month since the Great Depression. If 75% of the employees in the vulnerable industries are furloughed or lose their jobs, they will create a 16.4% unemployment rate. This is considered highly likely by leading economists. The longer we have physical separation and isolation, the more it will hurt the cash flow of companies, resulting in job losses in most sectors. James Bullard, chairman of St. Louis Federal Reserve, believes that we could experience a fall of 50% in GDP that could result in 30% unemployment in the second quarter of 2020. Other economists have predicted unemployment closer to 20%.
SIMULTANEOUS WORKER SHORTAGE & UNEMPLOYMENT
Vulnerable Sectors Include:
Hotels and other Hospitality
Arts, Entertainment and Recreation
Airlines, Travel Services, Transit, Rail
Logistics and Warehousing *
Taxi and Limo Drivers
Restaurants and Food Service
Performing Arts, Sports, Events
Contingent Workers
* There is also new hiring underway in warehousing and logistics
May continue to be employed in the short-term
EXPECTED SHORT-TERM UNEMPLOYMENT
77%
17%
6%
May already be unemployed or risk losing jobs, assuming that 75% of these sectors are affected.
Other Occupations
160 million employed
Source: BLS, February 2020
WORKFORCE: SIMULTANEOUS WORKER SHORTAGE & UNEMPLOYMENT
Since home delivery and online shopping are now considered the safest and often the only means to make purchases, eCommerce and courier services are hiring rapidly to meet the sudden surge in demand.
WORKFORCE. SIMULTANEOUS WORKER SHORTAGE & UNEMPLOYMENT
Walmart and Amazon have announced that they will make reductions in their corporate jobs but will hire more than 500,000 logistics and delivery workers to meet the demand surge in online purchases.
This surge in hiring is likely to create a worker shortage in locations where these companies and similar employers have their warehousing and fulfillment centers.
Tech companies that create the technologies behind e-commerce and the app-based home delivery companies are likely to ramp up during the crisis.
Cashier-less shopping alternatives that allow touch-free checkout such as Amazon Go and Zippin are likely to get a boost once this pandemic has ended. This is likely to lead to more innovation in this space and could result in a reduction in many retail jobs.
Morgan Stanley Estimate
Goldman Sachs Estimate
The Great Depression 1930
St. Louis Fed Estimate
2008 Financial Crisis
0%
50%
12%
20%
32%
24%
Different estimates of unemployment
After the 2008 financial crisis hit, the U.S. government passed a stimulus package totaling $831 billion. Many services and manufacturing companies ramped up their automation efforts during the recovery. This increased productivity and lowered labor costs, leading to greater profitability. A stimulus package of $2 trillion was approved by the U.S. government recently to mitigate the negative effects of sudden job losses and business closures. We expect investment in automation and digitization to ramp up rapidly. The economy’s rebound may not bring back all jobs as some jobs will be automated and others may become remote or go to contract workers. We could see a resurgent GDP but a rise in underemployment.
WORKFORCE.
Source: Federal Reserve Economic Data, February 2020
Manufacturing Recovery from the 2008 Financial Crisis
Industrial Production: Manufacturing (NAICS), Indexed Dec 2007=100
Employment in Manufacturing, Indexed Dec 2007=100
During the 2008 financial crisis, many jobs were lost in financial services and manufacturing. After the recession, when production returned to pre-crisis levels, nearly 10% of jobs had lost to automation.
Return of manufacturing
10% loss of jobs to technology
WORKFORCE: AUTOMATION IN THE AFTERMATH OF THE PANDEMIC
Contract workers make up 8-10% of the total employed workforce in the United States with an additional 3% making up a temporary workforce. The proportion of contract workforce is likely to increase after a major pandemic that heightens risk perception among employers, leading to depression of income and fewer benefits for workers.
In the NKF Global Strategy team’s client work in the past few years, the trend has been toward an increase in contract workers. The largest tech company in the world, Google, has more contract workers than full-time employees in the United States.
The risk sensitivity to economic upheavals is likely to drive this trend upward. Professional and licensed roles like accountants, paralegals, actuaries etc. may also become contracted in some companies.
It is likely that more than 20% of professional jobs could become contractual or on-demand in the next 3-5 years.
Contract work among professionals and tradesmen tends to increase wages of individuals as they are able to work with more than one company or for many clients. However, it has been seen that among hourly workers like rideshare drivers, warehouse workers and home delivery drivers, it tends to depress incomes and negatively affect worker benefits.
WORKFORCE: LABOR FLEXIBILITY AND DISTRIBUTED WORKFORCE
In the post-pandemic era, risk assessment and mitigation will be the foremost issues for businesses, and a distributed workforce will be viewed more favorably than it was pre-pandemic.
During rationalization or M&A integrations, firms consolidate locations, roles and head count to minimize operating complexity and cost. However, a distributed workforce is likely to find favor in board rooms during the recovery from the pandemic-driven recession due to heightened sensitivity to risk of concentrating workforce in a few locations or in one region.
Recently, many mid-sized and small technology companies in the San Francisco Bay Area and in New York have been looking for location alternatives as they find it difficult to compete with large tech companies for talent. An added impetus from a risk point of view is likely to accelerate this process.
Now that most office-going workers have been compelled to indefinitely work remotely due to the COVID-19 pandemic, new acceptance of this form of working may lead to a cultural shift.
Approximately 3% of the total workforce in the United States worked remotely before the pandemic. This rate is low because half of the companies in the U.S. don’t allow it and remote work is not looked upon favorably by some that do.
Now that nearly 95% of desk jobs are being done remotely from home, remote work in the post-pandemic era is likely to find support and even encouragement as it will have been proven that work could be done effectively away from the office as well.
Those who thrive in proximity of other people and desire social connection may return to their respective offices with a sigh of relief and possibly an antipathy for remote work.
There may be a new-found appreciation for both working together in the office and being able to concentrate on tasks while away from the traditional office.
Widespread remote working provides an opportunity for companies to lower their real estate expense if they are able to adopt remote working in a significant manner.
Source: American Community Survey (2010 to 2018: 1-Year Estimates Data Profiles)
Commuting to work, 2010 - 2018, USA (millions) *excluding Car, truck, or van -- drove alone & carpooled
Worked at home
Other means
Walked
Public Transportation
Number of remote workers are already greater than those who commute by public transport, whose ridership has fallen since 2015
REMOTE WORK: OPPORTUNITIES AND CHALLENGES
Flexible hours and the ability to occasionally work remotely is already a significant reason for workers to stay with an employer. Younger workers are willing to trade a lower salary for increased flexibility.
There is increasing value being placed on flexible hours and remote work, especially by the Millennial and Gen Z generations. Offering remote work opportunities may not be a competitive advantage when most companies adopt it in a significant manner, but not offering it may be seen negatively by prospective hires.
The elimination of a commute is not just saving people time and giving them more work-life balance, it is also resulting in a cleaner environment. This fact is likely to bring carbon-footprint considerations into business competitiveness and talent acquisition.
The downside of working remotely could be the inability of workers to unplug and separate themselves from work. This could lead to burnout and loss of motivation among remote workers if not managed both by employers and employees.
If remote working is employer-mandated, the employer may be responsible for providing the technology, tools and guidance on ergonomic work equipment that avoids workplace injury.
WORKPLACE: REMOTE WORK: OPPORTUNITIES AND CHALLENGES
In the changing status of remote working among employers and workers, co-working is also likely to undergo significant transformation as users' perceptions and needs change.
The COVID-19 pandemic has created an unprecedented fear of physical proximity to others as people see the pandemic death-toll growing every day. The preference for physical separation from people and the reluctance to touch anything without protection is likely to take root in the near-term as long as there is fear of a pandemic rebound or until a reliable vaccine has been developed. Effective vaccine development could take a year or two, if not longer. Co-working spaces are high-density spaces where everything is shared and people work in close proximity to each other. Without a fundamental change in space and furniture design a completely safe environment may not be possible even if co-working operators ensure sterilization of surfaces, general hygiene and safety. This may discourage users from visiting coworking spaces in the near-term. This opens an opportunity for the entry of smaller coworking space operators who could provide lower density and greater separation of the work environment for individuals and teams. Smaller coworking pods scattered around residential suburbs may support a high adoption of remote working. Instead of going to a large coworking space or an office in the city center, remote workers could meet with colleagues and clients in these smaller pods without the need to be among large throngs of people. For remote workers, home could be a place to focus and for working alone, while coworking pods near their residences could be used for meetings, occasional collaboration and to counteract the loneliness for those who have been in isolation for an extended period.
WORKPLACE: CO-WORKING AND WORKING ALONE
Building design and interior design will need to incorporate technologies and equipment that aid a touch-free, hygienic and uncrowded work environment. These could include:
Office design and workstations are likely to have new requirements and guidelines as high-density open offices are likely to fall out of favor. A coordinated strategy including co-working pods and remote working will need to be considered to balance out the additional cost of maintaining lower densities in office environments. Wellness programs, prevention incentives and hygiene education are likely to become popular and a differentiating recruiting factor initially until they become ubiquitous. Individual offices or enclosed workstations that resemble working pods or oversized phone booths may see a proliferation just as privacy booths have seen a rise in popularity.
Workplace hygiene and wellness programs will feature prominently in design discussions and operating plans of companies. Employees will need confidence in their firms’ hygiene and health safety policies to return to work and feel safe to mingle with their colleagues.
Light switches equipped with motion sensors.
Sliding or revolving doors equipped with motion sensors.
HVAC systems designed to have independent circulation for each floor that could be further partitioned for different suites.
Anti-microbial materials could cover work surfaces or high traffic areas.
Privacy booths and enclosed pods may replace the open office to provide a separation between people while retaining space per seat.
Converging trend: Autonomous electric vehicles that are available on demand or by subscription will eliminate the time lost in commuting or the stress associated with it. This will also allow people to live further outside of urban areas where the cost of living is lower while being able to work remotely.
WORKPLACE: HEALTH AND WELLNESS IN THE WORKPLACE
Temperature scanners at entrances.
If a deliberate and thoughtful remote work strategy is developed, technology and tools will be required to enable its efficient implementation.
The most important prerequisite of remote working is that the persons working remotely feel just as connected to the organization and equally empowered to do their work as they would in a regular office.
This may only be achieved through technology that may include:
Investment in video conference technology integrated with a chat-based communications system that allow teams and groups to communicate outside the email environment.
An integrated file sharing system and cloud storage.
A virtual collaboration platform integrated with file sharing.
An integrated project management and task management system.
TECHNOLOGY AND PROTOCOLS FOR REMOTE WORK
Mobile internet hotspots or built-in wireless features in devices.
Providing the technology and digital tools is not enough to achieve efficient remote workflow. Protocols and processes for mobile work need to be made part of the work culture for both remote and on-site workers.
Ensuring management acceptance and commitment to remote work.
Establishing clear guidelines around who is eligible to avoid engendering negativity, resentment, or the perception of unfairness.
Providing supporting technology and devices to ensure connectedness and ability to complete tasks.
Considering the needs of those who would like to keep their home and work separate and actually like to come into the office (i.e. not compelling remote work but allowing it as an option).
Designing the on-site work environment to support mobility and provide specialized spaces for different tasks that allow on-site and occasional remote workers to interact and collaborate effectively and seamlessly.
WORKFLOW: TECHNOLOGY AND PROTOCOLS FOR REMOTE WORK
The following considerations are important:
The dread of contracting an infectious disease will stay with workers indefinitely. This may have a noticeable impact on business travel which may decrease as risks will be evaluated differently in the short-term. If virtual visits and video conferences become the new standard, we can expect business travel to change forever.
Because of the COVID-19 pandemic, business travel has been reduced to zero, and yet, much of the work for which travel was used is still going on. There is considerable value placed on face-to-face interaction, but we have had to adapt. Focusing on critical travel and reducing the number of people who travel will not just lower expenses but also help the environment while lowering risk of infections. Expect travel insurance to cost more. NKF expects travel policies to become more stringent and essential travel to be redefined. We also expect clients to become more discerning as virtual meetings become standard practice and there is deeper investment in these technologies. Manufacturing plant tours, warehouse inspections, real estate tours, market visits, etc. are being redesigned and reimagined to keep work from stopping altogether. We expect Virtual Reality (VR), drone technology, enhanced camera technology and streaming quality to improve and become more ubiquitous and more user-friendly. Virtual visits are about to become more professionally acceptable and improve significantly in quality. According to SHRM, employers cannot force those employees to travel who are afraid of infection. The actual danger will be determined by the CDC, but we don’t expect travel to normalize before a reliable vaccine has been developed and most people trust its efficacy. The impact on airlines, hotels, restaurants, taxi and rideshare services and apparel retailers is likely to be significant.
Workflow: NEW TRAVEL POLICIES AND VIRTUAL VISITS
Existing telecommuters (pre-pandemic) in the United States reduce greenhouse gas emissions by the equivalent of taking 600,000 cars off the road for a year. If the work-at-home workforce expanded to include those who could and want to telecommute half of the time, the greenhouse gas reduction would equate to taking 10 million cars off the road.
Half-time telecommuters gain back 11 days a year—time they would have otherwise spent commuting.
Source: State of Telecommuting, U.S. Employee Workforce report, by Global Workplace Analytics, 2017
Workflow: Environmental impact of remote working
It is not only the office environment, but also factory floors, warehouses and fulfillment centers that have been affected by the pandemic. NKF expects a transformation in supply chain and logistics as risk management comes into sharp focus following the COVID-19 pandemic.
The risk of disease is likely to change the way we procure and buy food, with regional supply chains and regional sourcing likely becoming the preferred way to procure and supply critical items like food. Packaging, storage, and handling of food also has got the attention of consumers now. Low-touch solutions such as cashier-less check out or packaging at source are likely to form a significant part of consumer preference in the short-term. Small and mid-sized manufacturers may find it harder to repatriate critical supply chains, but larger companies may be able to automate quicker and localize critical supply chains and sourcing. As factories become automated, warehouses and fulfillment centers are following suit. The more they are automated and the fewer people they have on the floor, the lower their exposure is to future downturns due to a pandemic. The economic shutdown for non-economic reasons is very likely to result in greater investment in automation and artificial intelligence. Last-mile delivery options that reduce human-to-human contact may see an increase as stepping into crowded stores and streets may be avoided by consumers in the near term. Once investments have been made and autonomous vehicles, including drones, are able to deliver packages, it will become a matter of convenience and will mark a permanent shift in habits. This pandemic may cause an acceleration in e-commerce and the role of technology and virtual reality to simulate real life situations such as virtual apparel fitting.
WORKFLOW: SUPPLY CHAIN AND LOGISTICS
Many processes and changes that may have taken years to unfold are happening within weeks. Some of these forced behaviors will overcome fear of change and make some of this change irreversible, or even desirable.
Video conferences Virtual visits in lieu of travel Private work spaces
SUMMARY INSIGHTS
Some things that may become more desirable in the Workplace:
Contract workers Focus on health, hygiene, wellness Smaller real estate footprints
Remote and distributed work Accelerated automation Increase in contractual jobs
Entry of smaller coworking operators Greater move to e-Commerce and home deliveries
Converging trends that may change the Workforce and Workflow forever:
“Normal” Times, when we will be comfortable in the proximity of others, may only return when we have a reliable and trusted vaccine that will put an end to fatalities and make COVID-19 as endemic and ordinary as the common cold.
We are being forced to do things that we may not have contemplated before or rejected as "Too Extreme".
The modern workplace has been built largely as an open office. However, as densities have increased, so has the resentment toward open offices because of noise, interruptions and lack of privacy. Now that physical separation for health and safety is a concern, innovation in enclosed private workspaces may change the office yet again.
Conclusion
A.I. tools to aid independent work Regionalized supply chains and sourcing Autonomous electric vehicles
–
Tech that promotes low-touch interactions
Thank you
Add your contact details & logo to this page
Back to beginning
Rajeev Thakur Global Knowledge Center
rthakur@ngkf.com
+1.571.230.0242
knowledge.ngkf.com
