The COVID-19 global pandemic has pushed millions of Americans to work from their home offices, or in lieu of a dedicated workspace, their dining room tables and couches.
Social distancing rules and guidelines have quickly shifted most everyday activities to within the four walls of people’s private homes and forced changes in health care, learning and even happy hour — all of which have swiftly transitioned to meeting by smartphone or computer.
The crisis and businesses’ responses to it also could impose permanent changes in both commercial real estate needs and the office furniture industry.
“The COVID-19 pandemic has changed the ways and places people work,” Katie Woodruff, global corporate communications manager of Steelcase Inc., said in an email to MiBiz. “It’s too early to know what long-term implications this will have on corporate real estate strategies — as remote work (and) working from home isn’t a new concept.”
A post-coronavirus commercial office may look very different. Employees may now feel safer with more dividers and space between workstations instead of the open floor plans that have gained favor in recent years.
“It’s reasonable to assume that business leaders will want to reassure their employees they’re offering a safe place to work,” Woodruff said. “This could bring a short-term return to some of the facilities management practices businesses implemented before their offices were closed — frequent cleaning, worker protocols, offering more space between workers (and) additional privacy options.”
Through its operations in China, Steelcase has some familiarity with how factories and offices could function after people begin emerging from their homes, according to company CEO Jim Keene.
“It is important to note that it’s not coming back to the way it was before, not exactly,” Keene told brokerage analysts in a late-March conference call to discuss Steelcase’s quarterly financial results. “As people come back, they’re far more aware of infection control, they’re far more aware of social distancing protocols. There’s not a lot of gatherings of people. They’re doing things on an ongoing basis that we’re all still just getting used to here in the U.S. and in Western Europe.”
Around the world, dense offices that have little separation between people will have to adjust along with “products and solutions that have maximized density,” according to Keene.
However, in places where the outbreak has stabilized enough that the health care system has been able to respond and manage the virus on an ongoing basis and stay-at-home orders have been lifted, people are “glad to be able to connect together” again, he added.
The changes in office culture and design that workers will face are accelerations of trends that existed long before the current crisis, said Mike Dunlap, principal of Michael A. Dunlap & Associates LLC, a Holland-based office furniture industry consulting firm.
The number of people “working away from a traditional office at coworking spaces or an alternative office has been going up for probably 20 years,” Dunlap said. “I think people like the flexibility, even if they do it just part-time.”
Working from home has been gaining momentum in parallel with the technology to accommodate telecommuters. It’s likely that some if not many of the people who are now working from home will continue to do so into the future, according to Paul Isely, associate dean and a professor of economics at the Grand Valley State University Seidman College of Business.
“I think it’s going to create jobs that we didn’t think could be at home,” Isely told MiBiz.
While 11 percent of the U.S. workforce had been laid off or furloughed by the beginning of April, 34 percent of Americans who previously commuted were working from home, according to a recent report from the Massachusetts Institute of Technology.
“We know that this is a huge experiment for a lot of companies right now,” Isely said. “They’re being able to test techniques and ways to keep their teams together and they’ve never had a reason to do it at this scale. As they test that stuff and as we start to have the feedback on what’s working and what’s not working, that’s when we really will start to understand its true effect on everything else.”
The longer people are required to work at home, the greater the adoption of working remotely will be when the dust settles, according to a study from Global Workplace Analytics. The research firm estimates that 25-30 percent of the workforce will be “working at home on a multiple-days-a-week basis” by the end of 2021. Prior to the pandemic, only about 4 percent of the U.S. workforce was working from home at least half the time, according to the data.
In addition to generating the need for upgraded technologies like video conferencing software and widespread access to high-speed internet, the shift to home offices also will significantly affect West Michigan’s office furniture industry, according to Isely. As an example, he noted that members of his team have requested permission to bring the furniture from their on-campus offices to their homes.
“They want to go and get their office chair because they don’t have anything at home that is like that and their back is hurting or they’re having other problems because they don’t have the right ergonomic stuff,” he said.
The immense economic fallout of the pandemic and the ensuing recession will drive many employers to cut costs, according to Brian Long, director of supply chain management research at GVSU’s Seidman College of Business. Companies could find an easy solution to reducing some of their financial obligations by downsizing office space and letting employees continue to work from home.
“Maybe there are some initial costs of helping people get a home office setup, but in the long run, the cost of having more people work from home would be less for the company,” Long said.
A typical company saves about $11,000 per half-time telecommuting employee per year, according to the Global Workplace Analytics report.
Increases in the home office market are going to be a major adjustment for West Michigan office furniture companies that are reliant on clients that buy quantities of product to fill large-scale commercial spaces.
West Michigan-based manufacturers dominate the office furniture market and more than 16,000 people in West Michigan work in the industry, according to The Right Place Inc. It could be difficult for West Michigan’s “Big Three” — Steelcase, Holland-based Haworth Inc. and Zeeland-based Herman Miller Inc. — and their dealer networks to shift to smaller-scale clients or one-off home office sales, according to Long.
“The problem that I have with our furniture companies in Grand Rapids right now is they’re too much geared toward the corporate market,” Long said. “They need to develop some really neat modules and start marketing them to the home office market because too much of that market right now is going to IKEA and other places like that.”
Still, West Michigan manufacturers — which have been manufacturing furniture in the region since the 1800s — have a long history of adaptability and innovation.
“The furniture industry has always changed in Grand Rapids,” Long said.
When the production of wood furniture moved from West Michigan to North Carolina in the mid-1900s, Steelcase gained “huge government contracts for filing cabinets” during World War II, Long added.
Similar pivots will be necessary when people emerge from their homes and into a post-coronavirus business environment. The businesses that can’t evolve may be left behind, he said.
“There are people who want to do exactly what they’ve been doing in the past and there are very few businesses that can even operate that way,” Long said. “What you did and were successful with today is not what you may be successful with tomorrow.”
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