My experience spans over 5 Economic Cycles and I’ve seen the pendulum swing back and forth in migrating to the downtown core versus the cheaper suburbs.

As times are good and companies get more competitive for labour, they tend to gravitate towards the source - larger Colleges and Universities. We saw that with a lot of tech companies, who occupied some of the newer towers to attract talent, but now those same tech companies have the least amount of attendance at the office for their workers.

In down times, companies leverage more technology to protect their profit margin and revert back, to some extent, to the low occupancy cost of the suburbs that start with a lower property tax base.

So why the resistance in RTO mandates?

• The #1 reason is the ‘burn-out’ from the daily commute time to work

• The #2 reason is the overall cost of commuting (both measured in time and dollars)

1. Almost 2 in 3 workers 61% of workers spend between 30 and 90 minutes commuting each day, with 20% spending between 90 and 120 minutes.

What some companies have found is that those employees that come-in a few days a week, arrive earlier before peak traffic and stay much later after rush-hour periods. For the most part hybrid models remain:

• Work From Home Mondays & Fridays

• In-Office Tuesdays through Thursdays

According to a recent survey by Owl Labs

The average amount of money hybrid workers spend each day when working from the office is $51 USD; about $36 per day more to work from the office versus their home.

53% of employees feel it would need between $50 and $75 to make a trip into the office worthwhile because of cost and the perception they are more productive at home.

These costs of commuting consist of:

• Fuel Costs / Charging Costs

• Transit Costs / Parking

• Morning Coffee/Breakfast

• Buying Lunch

• Other things like Pet Daycare or Baby Sitting

2. Almost half (46%) of workers are “polyworking” with a side hustle or additional job, and a further 36% plan on starting one in the future.

3. More than half (58%) of hybrid employees “coffee badge” - also known as showing face at the office and then leaving.

Depending on the make-up of your office, people in Sales roles are more likely to come back daily versus ‘task oriented’ roles such as engineers and programmers who prefer to stay home to focus on that task.

It makes sense since Sales personalities rely on social interaction and collaboration between colleagues while ‘focus workers’ who are generally working alone want to concentrate on the task at hand and avoid the daily commute.

Other interesting observations reflect older, senior employees that have been with the company the longest have come back to the office while the younger, mostly juniors are reluctant to come back full time.

What some employers are doing to curb these trends is to offer ‘Commuter Benefits’ for those who travel more than 10 Kilometres from home. For every day you come into the office, an employee receives $50 to offset costs. For some it’s been a way to promote mandate compliance while having the employee do it on their terms.

Others are choosing a Hub & Spoke model where the head office is the experiential environment for building culture, collaboration, delegating new assignments and staying in the loop with progress; While satellite offices exist in places like WeWork, Regus or other business centres closer to where people lived. The head office would have longer term leases 5 - 10 years (with Lease Termination Provisions), while the ‘club house’ sites would be on shorter term contracts between 1 - 3 years.

What has failed for some companies is the Corporate Invite to a ‘Themed Meetup’ - Pot Luck gathering, Pre-Holiday celebrations, Food Truck days. Those events attracted people to come-in for the food and entertainment value, but didn’t translate into regular attendance at the office. It had a very short-term residual effect.

Other strategies included mandated the managers to be in-office to be at the office; thinking if the boss is in the rest of the employees would be more apt to come-in. Subsidizing lunch on Mondays and Fridays when most employees want to work from home.

So, what are employees looking for?

What Employees Want from their Employers

• Monthly Stipends and Subsidies to offset attendance costs

• a dedicated desk, with a good chair, requiring less set-up time each day

• access to snacks & refreshments,

• natural light next to a window and

• access to temperature control

Amenities They Desire from their Building

• Courtyard or Green Space with outdoor seating,

• On-Site Retail & Food Service,

• Golf simulator,

• Multiple lounges and Collaborative Spaces

• Gym with a spa-level changing room,

• Steam rooms and Massage rooms.

The Office Environment will become more experiential in order to attract employees.

As long as there are more jobs than people available to fill them, employees will drive the terms of employment. But ultimately, it will be the fear of missing-out that will compel employees to come back daily. If they find that a majority of their colleagues are in-office regularly then it would be detrimental to their career. But going to the office knowing your co-workers will be there is definitely a reason why most employees enjoy coming to work.

What I expect will happen is that with each fiscal quarter as Companies announce renewed mandates back to the office, we’ll see upticks April 1st, July 1st, October 1st, January 1st (excluding holiday weeks) until we get back to pre-covid levels. If you are looking to achieve financial freedom through passive investing, or looking for support while you actively invest in the real estate market, reach out to me at mel@paramountrealestate.ca and let’s discuss how we can help you reach your goals.

Disclaimer: The information and other content provided in this blog post, or in any linked materials, are not intended and should not be construed as financial or investment advice. The views expressed in this blog post are those of the author and do not necessarily represent the views of any other person, company, or organization. The author does not guarantee the accuracy or completeness of any information in this blog post and is not responsible for any errors or omissions or for the results obtained from the use of such information. The author assumes no liability or responsibility for any damage to you, or other property, due to your access to, use of, or downloading of this blog post or any materials provided within.