More than 400,000 federal employees will be required to come into their offices two to three days a week by January of 2024, according to research from JLL.
What impact will that have on the struggling office sector? Maybe not as much as office brokers would like.
The size of the public workforce is dwarfed by the private sector. And JLL’s numbers only apply to federal workers, not to those in state or city governments. The future health of the office sector is dependent far more on private companies bringing their workers back to their cubicles, meeting rooms and conference rooms.
Still, any sliver of good news is a positive for the office sector, which is still reeling from the work-from-home movement that has flourished since the 2020 start of the COVID pandemic.
That, at least, is the view from Bob Hunt, group managing director for government and education with JLL. He said that federal agencies requiring their workers to report to the office at least on a hybrid basis might provide yet another push for private-sector employers to do the same.
“The federal agencies aren’t asking workers to come back to the office five days a week. They just want them back two or three days a week or maybe five days during a pay period,” Huntt said. “It’s not like everyone is trooping back to the office on a full-time basis. But it is better than nothing.”
A start?
JLL reported that 16 federal government agencies have announced return-to-the-office mandates.
What these agencies require, though, varies. JLL said that many federal agencies are requiring all employees to be in-person at least two to three days a week. Others are requiring managers, supervisors and senior-level staff to report to the office only at agency headquarters buildings.
Hunt said that the actions of state and city governments, though, might have a more lasting impact on the office market. He said that many city workers have returned to the office long ago, partly to serve as an inspiration to the private sector.
“Government is a generic term. Not all levels of government operate in the same way,” Hunt said. “Look at city governments. They are at the front line of dealing with the crisis of nobody wanting to be in the cities anymore. Now city governments are being more aggressive in mandating that their workers return to the office at least three or four days a week. If they don’t show up in the city that they take care of, what does that say about them? How can they encourage private-sector companies to bring their workers back to the office if they’re not doing it themselves?”
Hunt said that state governments are interesting to watch, too. He said that different state agencies are taking wildly different approaches when it comes to bringing employees back.
Some state workers remain fully remote five days a week. Others are coming back to the office on a full-time basis. Still others are working on a hybrid basis, spending some of their time in the office and the rest of it working from home.
“State agencies right now are all over the spectrum,” he said. “Some are making decisions that are politically motivated. Others are making decisions that will help them best attract and retain workers. But as time goes on, it looks like more government agencies, just like with private sector companies, are moving toward the hybrid arrangement.”
According to an Office of Personnel Management survey conducted in the summer of this year, 89% of federal employees had some type of remote-work agreement. But only 14% of federal employees reported that they teleworked every day, while 40% said that they teleworked from one to four days a week. The survey found that 32% of surveyed employees didn’t telework at all.
A changing office?
Private-sector employees have relied on a host of incentives to bring their workers back to the office.
Some are relying on punitive measures, saying that workers who don’t agree to return to the office on at least a part-time basis will be fired. Others are reworking their office space to make it more friendly for collaboration and brainstorming. Some companies are moving from large footprints in aging office buildings to smaller spaces in higher-quality properties.
Hunt said that the mission of the office is changing. Today, office space is more frequently used for collaboration and brainstorming.
When employees are occupied with busy work, they can stay home and do it there. When they need to come up with new ideas or brainstorm new policies, products and services, they can meet with their fellow workers in offices designed to foster collaboration.
“What is the value of the office?” Hunt asked. “It is becoming a space for collaboration, socialization and mentoring. I have a tremendous fear for people coming out of college and entering the workforce. If they are working remotely or in a hybrid environment, who is going to be their mentor? Who is going to show them the ropes? Then there is the innovation side. When you are wrestling with a big problem, there is no better way to solve it without getting into a room with whiteboards and wrestling it down.”
The problem for government employees? Most government office spaces aren’t designed for innovation or collaboration. Many of them remain old-fashioned cubicle farms.
Despite this, JLL found that federal and state governments are hesitant to alter their office spaces.
In a recent JLL survey on hybrid work, only 10% of government clients said that most workers will transition to shared seating. That is significantly lower than the 41% of private sector clients who said that they are moving toward shared seating.
The survey also found that 41% of government clients don’t anticipate any shared seating, compared to only 13% of private-sector clients who told JLL the same thing.
Hunt said that many government agencies don’t have the budgets to remodel or revamp their office spaces, and they certainly don’t have the funds to move into newer buildings. This could hurt these agencies when they compete for talent, he said. And it could also make it more difficult for government agencies to convince their workers to return to the office.
“If your employees have options and they only have a crummy office to go to, why would they not work remotely?” Hunt asked. “What does that outdated office space do to your retention efforts over time? You irritate your workforce, whether you are in the public or private sector. People will consider their options. If one company makes them come into the office four days a week and the other makes them come into the office two days a week and gives them free coffee and nice shared working spaces? They’ll choose that second company.”
Hunt said that governments are just now starting to wrestle with how to bring their employees back to the office. The future, though, looks to be the hybrid approach, he said.
“It’s a people thing,” Hunt said. “No one saw this change coming. But once the pandemic hit and people started working from home, they realized how much they hated their commutes. They realized how compromised their work-life flexibility was. This was a mega worldwide change.”