I really liked Shopify's remote model of not closing offices, but turning them into "ports" for teams in major cities to get together throughout the year for planning, team building, and retreats. You had an official place to get together, enjoy the perks of tech company offices, but with the intention of deep short bursts of interaction rather than focused work.
We have done the same at Zendesk. We've reduced our office footprint but have kept our hubs open with large enough offices open for the occasional large on-site and for easier team collaborations, as well as space for anyone that prefers to work in an office environment.
I like the model, but I question long term economic viability of owning that much office space with mostly low utilization and only occasional spikes.
> I like the model, but I question long term economic viability of owning that much office space with mostly low utilization and only occasional spikes.
Oh for sure it doesn't make any sense, and is driven solely by the inertia of already having the office space. You'd let it go over time as leases lapse until you're down to just a tiny amount that's facing high utilization.
I'd be interested what the financial analysis looks like leasing or owning hubs vs a cadence of offsites annually remote first orgs usually hold, considering meeting space + hoteling for staff during the meet. I'll chip in for this analysis and blog post!
That sounds like an interesting analysis, but I'm curious if this is one of those moments where economics around it will be deeply shifting over the next few years and any analysis will likely have to adjust frequently.
For instance, even before the remote work shift in 2020 many cities were heavily competing on conference and hotel space allocations for an interesting variety of economic reasons (tourism dollars that float alongside, for instance). As more "corporate Downtown" downsizes their office footprints to go more remote, some of that real estate inventory is going to go to apartments and condos, but also I would expect that there would be just as much pressure to convert it to hotels and conference space and WeWork-style hoteling office space.
I wonder if that's going to snowball into dirt cheap conference prices in a growing list of cities. Especially if you start to factor in non-traditional "hub" cities (especially those non-traditional for tech). I've heard that's an appeal of Denver, Colorado as an annual onsite retreat city for remote first orgs as it has a large conference and hotel inventory that still has some very cheap periods outside of the usual tourist periods. I can point out that cities like Louisville, KY and Indianapolis, IN have massive inventories of hotel and conference (and exposition) space with some incredibly cheap calendar windows and still heavily competing among each other for more hotel/conference inventory every year. (I can also suggest which of those two cities in particular has better tourism options, but that may as much be hometown bias, so I'll save it.)
I have been to some fun offsites in Puerto Vallarta. I imagine other Mexican / central American towns/resorts are also available. It was cheap compared to a US city, everyone could fly there quickly and you could hang around as a tourist by booking FTO afterwards and delaying your flight back. (company didn't care if you picked a cheaper flight home a week or two later when expensing).
I'll also point out that Louisville has amazing whiskey distilleries downtown, the "urban bourbon trail". Great for hashing out tech and product disagreements!
My understanding is that's kind of a regional thing. California markets typically quote $/sf/month and pretty much the rest of the US does $/sf/year. Too easy to confuse. Been a while since I was in that game though.
But yes, you're right that typical high rise office space in the bay is around $50-80/sf/year or $4.50-7/sf/mo. Or $450-700/mo per employee at 100 sf per employee.
Provided employee productivity is the same (or better) this model still has Zendesk ahead. It doesn't really matter if utilization is low - if you've closed 10% of your offices you're paying 10% less rent than you were before.
Would there be opportunities for further efficiency by fully closing them and renting space a few times a year? Possibly, yes. But that doesn't mean the current model isn't an improvement on the previous one.
Depends, already years ago there was a hub-n-spoke-like model for office buildings where you had smaller offices for smaller companies that had the ability to temporarily rent the larger "shared" areas of the building.
It didn't really take off afaik, but with more bigger and stable tenants making a larger bulk of these it might actually take off a bit as a model.
2) Shared offices for collaboration (like co-working spaces) with reservations, as well as off-site retreats to places like Hawaii. This is cheaper than leasing in big cities.
3) Cost-cutting during the next recession killing those fancy co-working spaces and retreats
This is where co-working space (WeWork?) would work well. I just signed a 3 months contract for my team to meet at co-working place as needed to kickstart a project which in person meeting is important.
Officies, especially the great ones (as in also very expensive) create an irrational emotional attachment and are very hard to downsize on them without impacting morale.
Not true! I worked at what some would consider one of the top offices (Dropbox). They went remote and the polling was something like 70% support 30% oppose. There were some vocal supporters of in-office (mostly due to the perks like food) but they gave a generous stipend instead to satisfy most people.
I find I work better in an office myself... been remote for about 3 years now, and I've gotten used to it. I miss lunch with coworkers, etc... and some of the more spontaneous discussions don't happen nearly as much... Also, I like a relatively short commute (around 30m) long enough to clear the mind before/after work.
But I used to have a walking commute, which I also miss. Certainly I wouldn't miss a commute longer than 30 minutes. And I'd probably miss it less if it were in an office park somewhere, rather than a city I could walk to lunch at various places.
But yeah, I have a remote job because that's the job I have that I'm well-suited for that was available. (And sure, ability to work from one 1 or 2 days a week or as needed would certainly be convenient regardless). But I don't actually prefer working remotely, and also think there are real losses to quality of collaborative work, as well as quality of life. I know this is heretical to say these days in these circles.
It's not like everyone is the same. Having the freedom to work from home (or anywhere) whenever you need or want to is amazing. Working in the office to brainstorm, see friends, get a change of pace or scenery is also great. Commutes are killer when they're long and you have little choice but to do it.
I work like crap in cubicle farms and typical corporate offices. I feel like I'm on display.
I work best in a private office, with a door that closes, a window that looks out on nature, and a very large whiteboard. Ideally, I'd like my team members have similar ones.
Home is in between.
I can work much longer hours if I can:
- do basic basic bodily functions (stretching, eating, drinking, scratching, a short power nap, etc.)
- change work positions (e.g. lie down with a laptop)
- make noise (phone calls, music, etc.)
- have my papers and books spread out as I see fit
... and so on.
I have never seen a tech firm where I was comfortable in the office, and it's especially hard in places like SFO/BOS/NYC/etc. where square feet cost so much.
My past few jobs weren't with tech firms, and I really enjoyed working in proper offices.
Most of the history of labor unions involved meeting in secret in venues outside of work's control. Very few labor unions were ever formed in the halls of an office building.
Also, human connnection isn't irrational, but expecting all or most of your human connections to come from your job may be.
"Officies, especially the great ones (as in also very expensive) create an irrational emotional attachment "
I was responding to that part. Office create a rational connection in an irrational setting.
My grandfather and most of my great uncles were coal miners in Shamokin, Pennsylvania. They all talked about unions and striking in the mines. And they formed close bonds which made going on strike much easier as well as created a huge social bond when they where striking supplying each other with food and pirated coal.
The irrational attachment I was talking about is about having a large, status-symbol office with ~20% average occupancy. Downsizing to a smaller office harms morale even though most people work most of the time at home, yet they feel attached to almost always empty office, that's the irrational/sentimental part for me.
Having recently spent a few weeks in large, quite nice, but nearly empty offices (because I wanted to work in office for a change, but most of my cow orkers had other plans), I realized that holding on to oversized offices can backfire, because as nice as the space is, it felt somewhat demoralizing after a while to be nearly alone in such a vast building.
It seems like the thing to do is to downsize offices until they correctly meet usage. So, take your number of employees, multiply by percentage that usually comes into the office, add a buffer for growth, and have an office for that.
I'm not sure human connection is an equal comparison with offices. There's plenty of human connection, both in person and not, to be had with coworkers without centralized offices.
It's not that the human connection is immoral, it's just that paying rent and heating for a pretty empty office space doesn't make much sense. As long as there is sufficient space for all the employees that want to go to the office, being against downsizing doesn't make much sense.
What is needed is something like WeWork for large office gatherings. Something between a WeWork and a hotel conference center. The former is not really made for big meetings. The latter is either very expensive, too large or too small. You need a space for 10-200 people to meet and collaborate... not a conference center.
and big conference centers are often highly booked and expensive; random hotels are often very cheap and easy to pull together with a couple of weeks notice. quality varies, but shop around.
source: wrangled a few impromptu "conferences" at a local hotel near data centers.
That seems alluring. I wonder how large of a percentage of employees would, if prompted directly, opt to have company funds directed to have "ports" in major cities, if it was entangled with their salary.
Would you choose an additional 600$ a month and remote only, or would you vote for permanent variable spaces in major cities for events and team building?
As someone who goes in almost every day (I live close to my office and I enjoy getting out of the apartment). I wouldn't give up $600/mo for this, because management will never use that money for team events and travel. My team is spread out all across the country and we were told quarterly travel is no issue to all meetup in one of the cities that have an office. That went right out the door as soon as the economy went down. However, I can promise you that you wouldn't see that $600/mo back when you didn't get to travel.
I think this will be the new version of "free lunch" that tech companies offer. Come work for X, we pay for quarterly travel to meetup with your remote coworkers!
Why would it? Even in the most cynical business sense, a business will spend as much money on employees as they must. Again, assuming maximal cynicism, they won't care if it's salary or "ports", as long as it's the most effective buck they can spend (think ROI).
What is effective in attracting employees depends, at least partly, on what employees want. That might be either some amount of money into ports or more salary. Paying shareholders more will not attract employees.
Yea a lot of companies have done this to great effect - but I am curious to see what happens when lease renewal time comes. Paying for all that office space to remain ~empty 95% of the time does not look good on a budget.
That had been GitHub's model for their SF HQ office, more or less. Some local people used it as their daily office, but there seemed to always be a mini-summit or get together of remote folks happening each week.
There’s actually a word for that: Decentralized decision making.
Where you don’t need to physically be in the same room or even in the same country to have a fruitful discussion
