One year into a global pandemic, businesses are realizing that some changes they made to cope with a deadly virus may become permanent.
Even if the pandemic ends, many companies will allow some employees to continue working remotely. Videoconferencing apps like Zoom will continue to reduce the need for business travel.
For office building owners, airlines and hotels, the new normal will include lower revenue. For other businesses, technologies they adopted out of necessity could lead to lower costs and higher profits.
“If I have my employees working from home and I haven’t seen that big a dropoff in productivity, I may not want to go 100% back to working in-office,” said Peter Boumgarden, director of Washington University’s Koch Center for Family Enterprise. “Most companies won’t stick with work-from-home forever but will move toward a hybrid.”
Retailing giant Target, acknowledging that it won’t need everybody on premises all the time, announced Thursday that it’s giving up one-third of its Minneapolis office space.
Some employers, including St. Louis technology company LockerDome, have made work-from-anywhere a permanent option.
Chief Executive Gabe Lozano called the decision a no-brainer. “The pandemic showed that our employees are happier and more productive when they can choose a work environment that best suits their lifestyle,” he said. “Our potential talent pool has also expanded considerably by removing geographic considerations and better catering to individual needs.”
LockerDome, he added, will keep its downtown headquarters and also open a hub in Austin, Texas.
Other companies aren’t ready to give employees complete free rein, but acknowledge that they’ve learned a lot about the productivity of remote work.
Dan Stephen, president of Central Bank of St. Louis, thinks between 10% and 20% of his staff might become long-term remote workers. “If they are doing analytical work, they may perform better at home,” he said. “For creative work or meeting with clients, we expect those jobs will migrate back to the office.”
Stephen thinks bank lobbies, too, will be 10% to 15% less busy than before the pandemic, because customers are used to mobile apps and online banking. His commercial loan officers used e-signatures last year to replace 80% of the “wet” signatures they once required on documents, and Stephen thinks that efficiency also is here to stay.
As they reassess the need to fill cubicles, companies also are rethinking customer visits and conferences that worked pretty well on Zoom. The Global Business Travel Association expects travel spending to remain below its pre-pandemic level until 2025.
That’s bad news for business-oriented hotels like the ones Lodging Hospitality Management operates in downtown St. Louis.
President Steve O’Loughlin is seeing more bookings at LHM’s smaller, leisure-oriented hotels, but expects corporate meetings to come back slowly. On the bright side, properties such as LHM’s Union Station Hotel have booked a lot of groups for 2022.
“It could be several years before we get back to 2019 levels,” O’Loughlin said. “It’s going to be slow growth coming out of this, but I don’t think it’s a permanent change in travel.”
Boumgarden figures companies will take a variety of approaches to travel, just as they do on the question of remote work. “It won’t be that all travel is gone, but people will say, ‘Do we need to travel for this?’” he said.
He advises managers to view the past year as a giant experiment, albeit one nobody volunteered for. If companies can strike the right balance between old habits and new, technologically driven ways of working, they can make the experiment a profitable one.