1 00:00:01,920 --> 00:00:05,080 Speaker 1: When the pandemic hit, millions of people converted their kitchens, 2 00:00:05,120 --> 00:00:08,840 Speaker 1: living rooms, and bedrooms into home offices. Now, three years later, 3 00:00:08,960 --> 00:00:12,440 Speaker 1: companies want workers to return to the buildings they vacated. 4 00:00:12,520 --> 00:00:14,760 Speaker 2: The days of working from home are fading for more 5 00:00:14,760 --> 00:00:18,760 Speaker 2: employees now being called back to the office. Disney recently 6 00:00:18,800 --> 00:00:21,799 Speaker 2: announcing its employees will be required to spend four days 7 00:00:21,840 --> 00:00:22,720 Speaker 2: a week on site. 8 00:00:22,760 --> 00:00:26,920 Speaker 1: Google will begin tracking worker badge data and include office 9 00:00:26,920 --> 00:00:30,280 Speaker 1: attendance in performance reviews to get everyone in live. 10 00:00:30,400 --> 00:00:32,560 Speaker 3: You're going to go head to head with gold and Socks, 11 00:00:32,560 --> 00:00:34,280 Speaker 3: who want people back five days a week. 12 00:00:34,640 --> 00:00:36,920 Speaker 4: You've got government in tech. Do you think you'll ever 13 00:00:36,960 --> 00:00:38,640 Speaker 4: get back to pre COVID levels. 14 00:00:39,320 --> 00:00:41,800 Speaker 3: Millions of people around the world who got used to 15 00:00:41,880 --> 00:00:45,160 Speaker 3: doing their jobs from home during the pandemic and grew 16 00:00:45,200 --> 00:00:48,280 Speaker 3: to like it, are now being told by their employers 17 00:00:48,320 --> 00:00:51,000 Speaker 3: that it's time to return to the office. At least 18 00:00:51,040 --> 00:00:53,880 Speaker 3: some of the time. It might seem easy enough for 19 00:00:53,960 --> 00:00:56,800 Speaker 3: everyone to just go back to the way things were before, 20 00:00:57,360 --> 00:01:00,480 Speaker 3: but working remotely for a couple of years change the 21 00:01:00,480 --> 00:01:03,560 Speaker 3: way a lot of employees think about their jobs and 22 00:01:03,680 --> 00:01:06,240 Speaker 3: whether they need to commute to and from an office 23 00:01:06,360 --> 00:01:10,119 Speaker 3: to be productive. Companies, meanwhile, are trying to figure out 24 00:01:10,160 --> 00:01:13,360 Speaker 3: how to adapt to these shifts in corporate life and 25 00:01:13,520 --> 00:01:16,840 Speaker 3: balance the needs of their business with the expectations of 26 00:01:16,880 --> 00:01:21,400 Speaker 3: their workforce. As Bloomberg Senior Management and workplace reporter Matthew 27 00:01:21,400 --> 00:01:24,360 Speaker 3: Boyle found out, that is not an easy thing to 28 00:01:24,360 --> 00:01:28,039 Speaker 3: get right, and every country and every company seems to 29 00:01:28,080 --> 00:01:29,080 Speaker 3: have a different approach. 30 00:01:29,880 --> 00:01:34,320 Speaker 4: You have legislation either pending or proposed or actually being 31 00:01:34,600 --> 00:01:38,160 Speaker 4: passed that is going to codify protect the right to 32 00:01:38,240 --> 00:01:41,200 Speaker 4: work from home. We've seen these laws pop up in Ireland, 33 00:01:41,480 --> 00:01:44,520 Speaker 4: They've come up in the Netherlands, beyond Europe as well, 34 00:01:44,560 --> 00:01:47,039 Speaker 4: even as far as Canada. You're seeing right to disconnect. 35 00:01:47,319 --> 00:01:48,920 Speaker 4: But then in the US, so we're kind of on 36 00:01:48,920 --> 00:01:50,960 Speaker 4: our own. To the US, you're left to the whims 37 00:01:51,000 --> 00:01:58,800 Speaker 4: of your employer, your organization, your boss. 38 00:02:00,360 --> 00:02:03,640 Speaker 3: I'm West Ksova today on the big take the tricky 39 00:02:03,720 --> 00:02:14,359 Speaker 3: transition from WFH to rto Matt. Glad to have you back. 40 00:02:14,400 --> 00:02:16,120 Speaker 3: I see you're in the office today. 41 00:02:16,480 --> 00:02:18,120 Speaker 4: Yes, very happy to be here. Wes. 42 00:02:18,320 --> 00:02:20,560 Speaker 3: It seemed like, for a moment there in the middle 43 00:02:20,600 --> 00:02:24,440 Speaker 3: of the pandemic, everyone was saying the era of the 44 00:02:24,560 --> 00:02:27,880 Speaker 3: five day at the office work week is over. This 45 00:02:27,960 --> 00:02:31,000 Speaker 3: is a seismic change and it's never going to be 46 00:02:31,000 --> 00:02:33,639 Speaker 3: the same. And now it's kind of looking like maybe 47 00:02:33,680 --> 00:02:34,520 Speaker 3: that's not true. 48 00:02:34,960 --> 00:02:38,400 Speaker 4: Yeah, Wes, I mean your question really speaks to one 49 00:02:38,400 --> 00:02:41,240 Speaker 4: of the big problems talking about this issue is that 50 00:02:41,320 --> 00:02:44,760 Speaker 4: everybody wants to black and white this issue. Either the 51 00:02:44,800 --> 00:02:48,120 Speaker 4: office is dead and no one's ever going back ever, ever, ever, 52 00:02:48,600 --> 00:02:51,680 Speaker 4: or remote work is just for losers in their pajamas 53 00:02:51,760 --> 00:02:54,480 Speaker 4: and everybody better get back five days a week. And 54 00:02:54,600 --> 00:02:57,880 Speaker 4: neither of those things are true, but that's what gets 55 00:02:57,919 --> 00:03:00,280 Speaker 4: a lot of the headlines. That's what you sometimes here 56 00:03:00,320 --> 00:03:05,120 Speaker 4: from certain business leaders, you know, bla musk perhaps, but 57 00:03:05,639 --> 00:03:07,840 Speaker 4: you chuckle. But it's like when he we calls remote 58 00:03:07,840 --> 00:03:11,320 Speaker 4: work quote immoral. I mean, we've really reached a new 59 00:03:11,400 --> 00:03:15,200 Speaker 4: level of this debate. So the truth is as always 60 00:03:15,320 --> 00:03:17,760 Speaker 4: or usually you know, somewhere down the middle. But what 61 00:03:17,880 --> 00:03:19,960 Speaker 4: we really wanted to do with this story is spend 62 00:03:20,000 --> 00:03:22,720 Speaker 4: a little less time focused on the big companies that 63 00:03:22,840 --> 00:03:25,600 Speaker 4: capture our attention like Google and Goldman Sachs, and a 64 00:03:25,600 --> 00:03:28,799 Speaker 4: little more time spanning the world, you know, to sort 65 00:03:28,840 --> 00:03:31,200 Speaker 4: of see, okay, what's going on in Europe and how 66 00:03:31,200 --> 00:03:33,880 Speaker 4: does that compare to Asia and why and what's going 67 00:03:33,919 --> 00:03:37,000 Speaker 4: on in Paris versus London. That's what we're really able 68 00:03:37,040 --> 00:03:39,680 Speaker 4: to accomplish with this. The good thing about three and 69 00:03:39,680 --> 00:03:42,040 Speaker 4: a half years into the pandemic is that we finally 70 00:03:42,080 --> 00:03:43,680 Speaker 4: have a lot of good data as well. 71 00:03:45,600 --> 00:03:48,600 Speaker 3: It's important that you mentioned countries around the world because 72 00:03:48,600 --> 00:03:50,760 Speaker 3: this is one of the things I found really interesting 73 00:03:50,800 --> 00:03:54,240 Speaker 3: about your story is how different the approaches are in 74 00:03:54,280 --> 00:03:56,720 Speaker 3: different countries. So can you kind of paint us a 75 00:03:56,760 --> 00:04:00,080 Speaker 3: picture of what the work from home work from off 76 00:04:00,280 --> 00:04:01,680 Speaker 3: world looks like right now? 77 00:04:02,360 --> 00:04:06,279 Speaker 4: Even within countries. It's not one story, it's not monolithic. 78 00:04:06,440 --> 00:04:09,200 Speaker 4: Take the US just for starters before I broaden out. 79 00:04:09,520 --> 00:04:12,480 Speaker 4: In the US, usually the bigger the city, the higher 80 00:04:12,520 --> 00:04:15,080 Speaker 4: the rate of remote work. And whether that's due to 81 00:04:15,120 --> 00:04:16,880 Speaker 4: the fact that you know, in New York and other 82 00:04:16,920 --> 00:04:18,880 Speaker 4: big cities we've got to spend a lot of time 83 00:04:18,960 --> 00:04:22,680 Speaker 4: schleppingto in office, or whether that's because in big cities 84 00:04:22,720 --> 00:04:26,040 Speaker 4: you have more so called knowledge workers or creative types 85 00:04:26,200 --> 00:04:29,599 Speaker 4: jobs that are more conducive to remote work, or whether 86 00:04:29,640 --> 00:04:31,560 Speaker 4: that in the US is because we have bigger houses 87 00:04:31,880 --> 00:04:34,040 Speaker 4: and we're more likely to have a wonderful work from 88 00:04:34,040 --> 00:04:36,960 Speaker 4: home arrangement in our basement or in that third bedroom 89 00:04:37,000 --> 00:04:39,719 Speaker 4: that no one's using, rather than being cramped in a 90 00:04:39,760 --> 00:04:42,680 Speaker 4: small apartment in Hong Kong with four roommates that you 91 00:04:42,720 --> 00:04:45,119 Speaker 4: just want to get the heck out of. So there 92 00:04:45,320 --> 00:04:47,760 Speaker 4: in that city, and this is something we've written about before, 93 00:04:47,839 --> 00:04:50,599 Speaker 4: but you know, you've got tiny apartments, but you also 94 00:04:50,640 --> 00:04:53,680 Speaker 4: have a very efficient public transport system, so that's going 95 00:04:53,720 --> 00:04:56,919 Speaker 4: to give residents there fewer reasons to work from home. 96 00:04:57,320 --> 00:05:00,400 Speaker 4: I also came across some fresh research by Biden Nicholas 97 00:05:00,400 --> 00:05:02,320 Speaker 4: Bloom and his crew, which who are sort of the 98 00:05:02,360 --> 00:05:06,159 Speaker 4: gurus of remote work research out there in Stanford, and 99 00:05:06,200 --> 00:05:09,239 Speaker 4: they found that Asian nations, because they did a better 100 00:05:09,360 --> 00:05:13,240 Speaker 4: job of keeping COVID under wraps in the pandemic's first year, 101 00:05:13,440 --> 00:05:16,400 Speaker 4: people there didn't get as accustomed to working from home 102 00:05:16,440 --> 00:05:19,040 Speaker 4: as we did in the US. To move to Europe, 103 00:05:19,160 --> 00:05:22,400 Speaker 4: what fascinated to me there was that you have legislation 104 00:05:22,680 --> 00:05:26,640 Speaker 4: either pending or proposed or actually passed that is going 105 00:05:26,680 --> 00:05:30,320 Speaker 4: to codify protect the right to work from home, to 106 00:05:30,440 --> 00:05:33,760 Speaker 4: protect the right of a worker to disconnect from their 107 00:05:33,800 --> 00:05:37,800 Speaker 4: employer after normal business hours. We've seen these laws pop 108 00:05:37,880 --> 00:05:41,240 Speaker 4: up in Ireland, they've come up in the Netherlands, there 109 00:05:41,279 --> 00:05:45,280 Speaker 4: is a pan European movement around this right to disconnect. 110 00:05:45,760 --> 00:05:49,560 Speaker 4: You're seeing this legislation being proposed and passed. That's a 111 00:05:49,600 --> 00:05:52,039 Speaker 4: policy solution that I don't really think we're going to 112 00:05:52,080 --> 00:05:54,720 Speaker 4: be seeing in the US anytime soon, certainly not in 113 00:05:55,000 --> 00:05:58,680 Speaker 4: the halls of Congress. May see some statewide protections around 114 00:05:58,680 --> 00:06:01,400 Speaker 4: the right to work remote, but then in the US, 115 00:06:01,400 --> 00:06:03,000 Speaker 4: so we're kind of on our own. In the US, 116 00:06:03,120 --> 00:06:06,160 Speaker 4: you're left to the whims of your employer, your organization, 117 00:06:06,600 --> 00:06:08,159 Speaker 4: your boss in many cases. 118 00:06:08,920 --> 00:06:11,880 Speaker 3: And what do we know about how workers feel about 119 00:06:12,240 --> 00:06:15,440 Speaker 3: coming back to the office versus working from home or 120 00:06:15,520 --> 00:06:18,000 Speaker 3: just having some sort of flexibility. 121 00:06:18,680 --> 00:06:21,200 Speaker 4: I think they really they don't mind it if there 122 00:06:21,320 --> 00:06:23,960 Speaker 4: is a reason. There is nothing worse than spending eight 123 00:06:24,000 --> 00:06:26,400 Speaker 4: hours on zoom calls that you could have had from 124 00:06:26,480 --> 00:06:29,880 Speaker 4: your home office or just or from Starbucks or from anywhere. 125 00:06:30,279 --> 00:06:33,159 Speaker 4: If you're coming into an office, you want some intentionality 126 00:06:33,200 --> 00:06:36,320 Speaker 4: about it. You want to be part of a brainstorming session, 127 00:06:36,720 --> 00:06:40,440 Speaker 4: or perhaps it's just something more informal, like an afterwork gathering. 128 00:06:40,880 --> 00:06:44,520 Speaker 4: That's what I think employers need to realize that if 129 00:06:44,520 --> 00:06:46,800 Speaker 4: you're going to do a policy, you need to be 130 00:06:46,880 --> 00:06:49,040 Speaker 4: going in for a reason, and usually it's around your 131 00:06:49,040 --> 00:06:51,200 Speaker 4: team itself. I mean, it's one thing to just say, Okay, 132 00:06:51,200 --> 00:06:53,640 Speaker 4: the whole company has to be in. It's like, well 133 00:06:53,720 --> 00:06:55,760 Speaker 4: that's great, you know, but I'm not really interacting with 134 00:06:55,800 --> 00:06:58,080 Speaker 4: the engineers today, or I have nothing to do with 135 00:06:58,120 --> 00:07:01,279 Speaker 4: the sales team. Make it very specific to your team, 136 00:07:01,400 --> 00:07:03,880 Speaker 4: to your function for why you're in, and I think 137 00:07:03,880 --> 00:07:05,200 Speaker 4: you're going to get a lot less. 138 00:07:05,000 --> 00:07:08,280 Speaker 3: Pushback, Matt. One thing we hear from CEOs a lot 139 00:07:08,360 --> 00:07:10,920 Speaker 3: is that part of the office culture is you bump 140 00:07:10,920 --> 00:07:13,800 Speaker 3: into people in the office and you have impromptu conversations 141 00:07:13,800 --> 00:07:16,560 Speaker 3: that lead to really good ideas. And I find that 142 00:07:16,560 --> 00:07:19,239 Speaker 3: that's actually true. I do run into people and get 143 00:07:19,280 --> 00:07:22,040 Speaker 3: good ideas. But I also find that when I'm working 144 00:07:22,120 --> 00:07:24,760 Speaker 3: at home that sometimes the company gets more work out 145 00:07:24,840 --> 00:07:27,600 Speaker 3: of me because I'm just focused and sitting here working 146 00:07:27,640 --> 00:07:29,800 Speaker 3: all day instead of having all those conversations. 147 00:07:30,320 --> 00:07:32,680 Speaker 4: The number of times I've bumped into someone and bounced 148 00:07:32,680 --> 00:07:35,000 Speaker 4: the story idea off them and realized it was either 149 00:07:35,040 --> 00:07:37,320 Speaker 4: a a good idea or B I should just shut 150 00:07:37,400 --> 00:07:39,920 Speaker 4: up about it and move on. I mean, those are valuable, 151 00:07:39,920 --> 00:07:42,640 Speaker 4: but let's say, if I'm writing a story doing heads 152 00:07:42,680 --> 00:07:45,679 Speaker 4: down work, that is, when being home I think really 153 00:07:45,720 --> 00:07:49,040 Speaker 4: benefits any sort of desk base worker. You don't have 154 00:07:49,120 --> 00:07:51,160 Speaker 4: the constant drumbeat. You know, you might still have the 155 00:07:51,200 --> 00:07:53,520 Speaker 4: pinging of slack, but at least you can turn that off. 156 00:07:54,000 --> 00:07:56,040 Speaker 4: But you're not going to have people so called desk 157 00:07:56,120 --> 00:07:59,480 Speaker 4: bombing you just sort of sidling up and say, hey, hey, 158 00:07:59,520 --> 00:08:02,200 Speaker 4: Wes those nicks. You know, you don't really need that 159 00:08:02,240 --> 00:08:04,600 Speaker 4: when you want to get heads down focused work done. 160 00:08:04,720 --> 00:08:07,520 Speaker 4: So I think there's definitely a value for both of those. 161 00:08:07,680 --> 00:08:10,480 Speaker 4: It's figuring out how much time do you need spend 162 00:08:10,600 --> 00:08:13,640 Speaker 4: at home to get that sort of private, more focused 163 00:08:13,680 --> 00:08:16,520 Speaker 4: work done, and what are the opportunities for you to 164 00:08:16,600 --> 00:08:18,840 Speaker 4: be in an office and again having those more sort 165 00:08:18,880 --> 00:08:22,440 Speaker 4: of spontaneous connections that I agree certainly do happen. It's 166 00:08:22,480 --> 00:08:24,800 Speaker 4: just sometimes it seems like a little bit more is 167 00:08:24,840 --> 00:08:27,480 Speaker 4: made of them. A lot of interactions people have in 168 00:08:27,480 --> 00:08:31,040 Speaker 4: inn office, especially under represented minorities, are not wonderful. They're 169 00:08:31,080 --> 00:08:33,680 Speaker 4: not wonderful at all. They're microaggressions. And that's a big 170 00:08:33,720 --> 00:08:36,640 Speaker 4: reason why when you polled, for example, black Americans, they 171 00:08:36,679 --> 00:08:39,760 Speaker 4: were much happier, felt much more productive and satisfied in 172 00:08:39,800 --> 00:08:43,760 Speaker 4: the early months of the pandemic when everybody was remote Matt. 173 00:08:43,800 --> 00:08:46,360 Speaker 3: There also seems to be sort of an about face 174 00:08:46,480 --> 00:08:49,679 Speaker 3: on the messaging from companies during the pandemic. A lot 175 00:08:49,720 --> 00:08:52,199 Speaker 3: of companies were really quick to say, even though our 176 00:08:52,200 --> 00:08:54,840 Speaker 3: workforce is at home, they've never been more efficient and 177 00:08:54,960 --> 00:08:58,440 Speaker 3: never been more productive. And now that the pandemic is 178 00:08:58,600 --> 00:09:00,520 Speaker 3: behind us and people can come in, and people are 179 00:09:00,559 --> 00:09:04,080 Speaker 3: saying working from home isn't as efficient, it isn't as productive, 180 00:09:04,120 --> 00:09:06,000 Speaker 3: and we need people to come back in. And it's 181 00:09:06,200 --> 00:09:07,480 Speaker 3: sometimes the same companies. 182 00:09:08,040 --> 00:09:10,679 Speaker 4: Yeah, there was this sort of sense of Okay, I think, okay, 183 00:09:10,679 --> 00:09:13,320 Speaker 4: we can do this. This is amazing. This was surprising 184 00:09:13,360 --> 00:09:15,360 Speaker 4: again to at least to some people, those who didn't 185 00:09:15,400 --> 00:09:18,000 Speaker 4: really study remote work. Now, though, as some of the 186 00:09:18,040 --> 00:09:21,319 Speaker 4: more data is trickling out, you are seeing cases where 187 00:09:22,040 --> 00:09:24,559 Speaker 4: sometimes people will cherry pick a new bit of research 188 00:09:24,559 --> 00:09:27,640 Speaker 4: that comes out that says, for example, you know, Indian 189 00:09:27,840 --> 00:09:31,560 Speaker 4: data entry workers were eighteen percent less productive you know 190 00:09:31,679 --> 00:09:34,839 Speaker 4: while working remote. Everybody jumps on that. But then the 191 00:09:34,920 --> 00:09:37,440 Speaker 4: other hand, you still have you know, reams of data 192 00:09:37,480 --> 00:09:41,120 Speaker 4: and research showing from different researchers that call center workers 193 00:09:41,240 --> 00:09:44,240 Speaker 4: can be as productive, if not more productive, and happier 194 00:09:44,920 --> 00:09:47,640 Speaker 4: working remotely. I mean, you look at a call center worker, 195 00:09:47,800 --> 00:09:50,800 Speaker 4: for the most part, you can be doing that from home. 196 00:09:51,160 --> 00:09:54,760 Speaker 4: We are at least finally seeing some more nuanced and 197 00:09:54,880 --> 00:09:58,760 Speaker 4: progressive approaches to this, with a lot of companies settling 198 00:09:58,800 --> 00:10:01,200 Speaker 4: on some type of hybrid. And again, a hybrid doesn't 199 00:10:01,240 --> 00:10:03,960 Speaker 4: always work. You can really screw up a hybrid plan 200 00:10:04,320 --> 00:10:06,640 Speaker 4: if you don't spend a lot of time researching it 201 00:10:06,679 --> 00:10:09,600 Speaker 4: and figuring out what types of work your workers do 202 00:10:09,720 --> 00:10:12,720 Speaker 4: and where do they best do those jobs. I've got 203 00:10:12,720 --> 00:10:15,000 Speaker 4: some data for you from Gallop, which is a very 204 00:10:15,040 --> 00:10:18,240 Speaker 4: reputable polling organization, that shows that when you go from 205 00:10:18,280 --> 00:10:21,599 Speaker 4: three to four to five days in the office, employee 206 00:10:21,600 --> 00:10:24,439 Speaker 4: engagement kind of drops off a cliff because you might 207 00:10:24,480 --> 00:10:26,440 Speaker 4: have people who are very used to three days in 208 00:10:26,480 --> 00:10:28,840 Speaker 4: the office and they had their life sort of fixated 209 00:10:29,000 --> 00:10:31,520 Speaker 4: around that, I know when i'm home, I know when 210 00:10:31,520 --> 00:10:33,320 Speaker 4: I'm in the office, and then you move that to 211 00:10:33,360 --> 00:10:35,840 Speaker 4: four or five days kind of on a whim, It'll 212 00:10:35,920 --> 00:10:38,760 Speaker 4: uproot a lot of people's lives. And of course you're 213 00:10:38,760 --> 00:10:41,040 Speaker 4: still going to you're going to lose some of those people. 214 00:10:41,840 --> 00:10:44,360 Speaker 3: And That's an important point because this balance of power 215 00:10:44,400 --> 00:10:48,760 Speaker 3: between companies and workers is always lightly shifting. During the pandemic, 216 00:10:48,760 --> 00:10:51,320 Speaker 3: when there was this very tight labor market, work from 217 00:10:51,320 --> 00:10:54,280 Speaker 3: home was one of the incentives. I remember people would say, 218 00:10:54,280 --> 00:10:56,640 Speaker 3: It's like the first question they would often hear from 219 00:10:56,720 --> 00:10:59,960 Speaker 3: new job applicants, what is your flexible work arrangement? Now, 220 00:11:00,000 --> 00:11:03,280 Speaker 3: now that the labor market isn't quite as tight and 221 00:11:03,640 --> 00:11:06,360 Speaker 3: people aren't as willing to leave, maybe there aren't as 222 00:11:06,400 --> 00:11:10,120 Speaker 3: many opportunities. Companies seem to be understanding that they've got 223 00:11:10,160 --> 00:11:11,200 Speaker 3: a little bit more power. 224 00:11:11,760 --> 00:11:14,160 Speaker 4: I mean, if you're a smart employer, you're going to 225 00:11:14,160 --> 00:11:17,559 Speaker 4: be offering at least some type of flexible work arrangement 226 00:11:17,800 --> 00:11:21,240 Speaker 4: for the people you want to hire. So while yes, 227 00:11:21,280 --> 00:11:24,360 Speaker 4: the balance of power has shifted back certainly more towards 228 00:11:24,400 --> 00:11:27,000 Speaker 4: the employer in recent months, I still think if you 229 00:11:27,040 --> 00:11:29,920 Speaker 4: have skills that are in demand, you should be able, 230 00:11:30,280 --> 00:11:32,840 Speaker 4: if not to write your own ticket, then at least 231 00:11:32,840 --> 00:11:36,679 Speaker 4: to have some say over where, when and how you'll work. 232 00:11:37,880 --> 00:11:41,360 Speaker 3: After the break, with fewer people working downtown, what will 233 00:11:41,400 --> 00:11:43,360 Speaker 3: happen to all that office space? 234 00:11:51,200 --> 00:11:57,040 Speaker 5: Their statuesque vast and staggering, and they're empty skyscrapers and 235 00:11:57,080 --> 00:12:01,040 Speaker 5: office buildings, once stacked high with businesses, are experiencing high 236 00:12:01,160 --> 00:12:05,240 Speaker 5: vacancy rates in the US nearly nineteen percent, five and 237 00:12:05,240 --> 00:12:07,240 Speaker 5: a half percent higher than before. 238 00:12:06,960 --> 00:12:11,000 Speaker 3: The pandemic MATT. Another thing that comes into play in 239 00:12:11,040 --> 00:12:14,640 Speaker 3: these discussions about return to office seems to be office 240 00:12:14,840 --> 00:12:17,960 Speaker 3: real estate and cities. Companies have a lot of office space 241 00:12:18,040 --> 00:12:21,040 Speaker 3: and they don't want it to stand empty. 242 00:12:21,200 --> 00:12:24,000 Speaker 4: Yes, and twenty percent of it in the US is 243 00:12:24,160 --> 00:12:28,120 Speaker 4: empty right now. Office vacancy rates are at an all 244 00:12:28,200 --> 00:12:32,040 Speaker 4: time high, and with interest rates rising, a lot of 245 00:12:32,080 --> 00:12:34,200 Speaker 4: the loans that are back in these offices are coming 246 00:12:34,320 --> 00:12:39,000 Speaker 4: do companies are just wholesale sometimes thirty, forty, even fifty 247 00:12:39,040 --> 00:12:42,000 Speaker 4: percent of their real estate, and many times these were 248 00:12:42,080 --> 00:12:45,480 Speaker 4: long overdue moves. You know, companies grew up fast. Let's say, 249 00:12:45,520 --> 00:12:48,360 Speaker 4: if you're especially if you're a hot, fast growing tech startup, 250 00:12:48,559 --> 00:12:51,120 Speaker 4: you'd sometimes have five or six offices in the same 251 00:12:51,240 --> 00:12:54,319 Speaker 4: city in like Austin. You know, we got offices everywhere, 252 00:12:54,320 --> 00:12:56,720 Speaker 4: we just need them. No, you didn't really need six 253 00:12:56,800 --> 00:12:59,840 Speaker 4: different ones, so consolidated into one or two probably a 254 00:12:59,840 --> 00:13:03,040 Speaker 4: wise idea, But yes, there is a reckoning here for 255 00:13:03,240 --> 00:13:06,520 Speaker 4: the commercial real estate sector. And unless you have what 256 00:13:06,559 --> 00:13:09,480 Speaker 4: they call, you know, class A real estate with all 257 00:13:09,520 --> 00:13:12,040 Speaker 4: the bells and whistles, you're probably you know, on the 258 00:13:12,080 --> 00:13:14,520 Speaker 4: hunt for some tennis right now. You know, why is 259 00:13:14,520 --> 00:13:18,040 Speaker 4: it that eighty percent of offices traditionally we're just individual 260 00:13:18,120 --> 00:13:21,600 Speaker 4: desks and cubicles, and only twenty percent was collaborative space 261 00:13:21,679 --> 00:13:24,280 Speaker 4: that should be flipped. And in a lot of workspaces 262 00:13:24,320 --> 00:13:27,120 Speaker 4: and offices it is flipping right now. A lot more 263 00:13:27,160 --> 00:13:29,760 Speaker 4: space set up for what we call neighborhoods. You'll do 264 00:13:29,840 --> 00:13:31,840 Speaker 4: some work with your team, but there's also space for 265 00:13:31,920 --> 00:13:35,480 Speaker 4: hanging out, a lot more open space, outdoor space. So 266 00:13:35,520 --> 00:13:37,840 Speaker 4: we are seeing some more creative approach as to how 267 00:13:37,840 --> 00:13:40,040 Speaker 4: offices are laid out, and if you don't want to 268 00:13:40,040 --> 00:13:42,320 Speaker 4: get creative, it's going to cost you. The issue is 269 00:13:42,320 --> 00:13:45,040 Speaker 4: that commercial real estate, folks, it's a very risk averse 270 00:13:45,440 --> 00:13:48,480 Speaker 4: industry historically, because if you've made a mistake on a 271 00:13:48,520 --> 00:13:50,760 Speaker 4: seven year lease, you were going to get reminded of 272 00:13:50,760 --> 00:13:54,040 Speaker 4: that mistake for the next seven years. So they've often 273 00:13:54,120 --> 00:13:56,960 Speaker 4: not really you know, let's say, taken chances or pushed 274 00:13:57,000 --> 00:13:59,040 Speaker 4: the boundaries because all you had to do is line 275 00:13:59,080 --> 00:14:01,440 Speaker 4: up a bunch of desks cubes, and you know, everyone 276 00:14:01,480 --> 00:14:03,120 Speaker 4: had to go there because where else were you going 277 00:14:03,160 --> 00:14:05,240 Speaker 4: to do your work. Now that people have a choice 278 00:14:05,280 --> 00:14:08,160 Speaker 4: about where work gets done, I think offices need to 279 00:14:08,200 --> 00:14:11,000 Speaker 4: make some hard choices about what these offices look like. 280 00:14:11,840 --> 00:14:14,600 Speaker 3: And it's not just companies that are bringing pressure on 281 00:14:14,720 --> 00:14:18,840 Speaker 3: workers to return. Its politicians and governments. You see the 282 00:14:18,880 --> 00:14:21,600 Speaker 3: mayor of Washington, d C. Telling Joe Biden, you have 283 00:14:21,640 --> 00:14:23,960 Speaker 3: to bring federal workers back to the office because the 284 00:14:24,080 --> 00:14:26,240 Speaker 3: downtown businesses can't survive. 285 00:14:26,800 --> 00:14:31,160 Speaker 6: We need decisive action by the White House to either 286 00:14:31,240 --> 00:14:34,640 Speaker 6: get most federal workers back to the office most of 287 00:14:34,680 --> 00:14:39,320 Speaker 6: the time, or to realign their vast property holdings for 288 00:14:39,560 --> 00:14:44,400 Speaker 6: use by the local government, by nonprofits, by businesses, and 289 00:14:44,440 --> 00:14:47,560 Speaker 6: by any user willing to revitalize it. 290 00:14:49,120 --> 00:14:52,440 Speaker 4: DC New York, you know, Mayor Adams has been very vocal. 291 00:14:52,800 --> 00:14:55,520 Speaker 1: I'm trying to fill up office buildings and I'm telling 292 00:14:55,640 --> 00:14:59,240 Speaker 1: JP Morgan Goldman Sacks, listen, I need your people back 293 00:14:59,320 --> 00:15:02,320 Speaker 1: into office so we can build the ecosystem. 294 00:15:03,480 --> 00:15:05,240 Speaker 4: But it just sort of speaks to the fact that, yes, 295 00:15:05,320 --> 00:15:09,120 Speaker 4: this is having a massive impact on downtown economies, but 296 00:15:09,280 --> 00:15:11,400 Speaker 4: not in every city. That's one thing I learned from 297 00:15:11,400 --> 00:15:13,240 Speaker 4: doing this story is that kind of a lot depends 298 00:15:13,280 --> 00:15:15,320 Speaker 4: on how your city is laid out. There was a 299 00:15:15,360 --> 00:15:19,120 Speaker 4: great report recently from the McKinsey Global Institute that found 300 00:15:19,280 --> 00:15:23,320 Speaker 4: that if sort of pandemic attendance rates hold, as much 301 00:15:23,320 --> 00:15:26,000 Speaker 4: as eight hundred billion dollars of real estate value is 302 00:15:26,040 --> 00:15:29,400 Speaker 4: going to evaporate by twenty thirty in nine cities around 303 00:15:29,400 --> 00:15:31,640 Speaker 4: the world. And that includes New York and San Francisco, 304 00:15:31,680 --> 00:15:34,360 Speaker 4: which of course gets so much attention here, but also 305 00:15:34,400 --> 00:15:37,400 Speaker 4: includes cities like Paris and Munich. But in some cities 306 00:15:37,400 --> 00:15:39,320 Speaker 4: we do see that when you have a city that's 307 00:15:39,360 --> 00:15:41,840 Speaker 4: not just set up as a downtown business district where 308 00:15:41,840 --> 00:15:45,480 Speaker 4: all you have is offices and coffee shops and delis, 309 00:15:45,760 --> 00:15:48,440 Speaker 4: when you actually have people living and working and playing 310 00:15:48,600 --> 00:15:51,600 Speaker 4: in a city, the impact there is much more muted. 311 00:15:51,720 --> 00:15:53,840 Speaker 4: And that's what this McKenzie report found, which I found 312 00:15:54,000 --> 00:15:56,880 Speaker 4: very very interesting. But you're right the price tag. At 313 00:15:56,880 --> 00:15:58,760 Speaker 4: the end of the day, I asked them what their 314 00:15:58,800 --> 00:16:01,720 Speaker 4: worst case scenario was. They said one point three trillion 315 00:16:02,080 --> 00:16:06,200 Speaker 4: dollars in real estate value gone by twenty thirty in 316 00:16:06,240 --> 00:16:10,200 Speaker 4: these nine global cities. If attendance rates continue to fall 317 00:16:10,320 --> 00:16:12,760 Speaker 4: or even sort of plateau where they are because right 318 00:16:12,760 --> 00:16:15,200 Speaker 4: now in the US, attendance is not going up. We'll 319 00:16:15,200 --> 00:16:17,200 Speaker 4: see if it goes up. We will see if we 320 00:16:17,240 --> 00:16:20,400 Speaker 4: can get above fifty percent of pre COVID levels in 321 00:16:20,440 --> 00:16:22,840 Speaker 4: these ten major cities that are often tracked and that 322 00:16:22,920 --> 00:16:25,040 Speaker 4: we track on the Bloomberg terminal. But I don't know. 323 00:16:25,120 --> 00:16:27,280 Speaker 4: The past two years, we've thought, Okay, Labor Day, everyone's 324 00:16:27,280 --> 00:16:30,800 Speaker 4: going to come back, right, No, for two years straight, No, no, no, 325 00:16:31,040 --> 00:16:33,480 Speaker 4: So we'll see what holds this time around. 326 00:16:34,600 --> 00:16:37,640 Speaker 3: I can imagine a lot of our listeners who don't 327 00:16:37,680 --> 00:16:40,400 Speaker 3: work in an office, maybe they work in manufacturing, or 328 00:16:40,560 --> 00:16:45,480 Speaker 3: they work in retail or drive a delivery vehicle, seeing 329 00:16:45,480 --> 00:16:47,960 Speaker 3: this conversation saying, oh boo, who these people have to 330 00:16:48,000 --> 00:16:48,480 Speaker 3: go to work? 331 00:16:49,200 --> 00:16:52,360 Speaker 4: Yeah, there's That's been sort of a common theme throughout 332 00:16:52,400 --> 00:16:54,920 Speaker 4: the pandemic, is that I think we spend far too 333 00:16:54,960 --> 00:16:58,400 Speaker 4: much time focusing on desk workers, and in terms of 334 00:16:58,440 --> 00:17:01,480 Speaker 4: the coverage, in terms of the re search reports, it's 335 00:17:01,520 --> 00:17:04,320 Speaker 4: always you know, what are the software engineers going to 336 00:17:04,400 --> 00:17:07,240 Speaker 4: do at Google? And you know what are the journalists 337 00:17:07,280 --> 00:17:09,720 Speaker 4: at Bloomberg and the New York Times doing with their 338 00:17:10,240 --> 00:17:12,919 Speaker 4: ARTEO policy? And meanwhile, you have more than half of 339 00:17:12,960 --> 00:17:19,520 Speaker 4: America frontline workers, nurses, teachers, doctors, truck drivers, Walmart cashiers. 340 00:17:19,840 --> 00:17:22,919 Speaker 4: But I think a step back perhaps is required so 341 00:17:23,040 --> 00:17:25,480 Speaker 4: that again, it doesn't just become black or white, or 342 00:17:25,760 --> 00:17:27,560 Speaker 4: you know, a conflict. You know, then all of a 343 00:17:27,560 --> 00:17:29,840 Speaker 4: sudden you've got sort of the frontline workers and the 344 00:17:29,880 --> 00:17:33,119 Speaker 4: knowledge workers sniping at each other when everyone should be 345 00:17:33,200 --> 00:17:36,560 Speaker 4: realizing the way all of us are working has changed. 346 00:17:36,560 --> 00:17:38,880 Speaker 4: And I think there have been improvements, maybe not as 347 00:17:38,960 --> 00:17:42,199 Speaker 4: noticeable improvements for frontline employees, but I think work is 348 00:17:42,280 --> 00:17:44,600 Speaker 4: changing no matter what type of work do you do. 349 00:17:46,119 --> 00:17:49,280 Speaker 3: And Matt, you write about people at the very other 350 00:17:49,400 --> 00:17:52,400 Speaker 3: end of that spectrum, what you call digital nomads. 351 00:17:53,160 --> 00:17:56,000 Speaker 4: Yeah, and these are people who, throughout the pandemic, or 352 00:17:56,000 --> 00:17:58,320 Speaker 4: at some point the pandemic, just said, look, I've got 353 00:17:58,320 --> 00:18:01,440 Speaker 4: a job that I know I can do anywhere from 354 00:18:01,440 --> 00:18:03,840 Speaker 4: anywhere in the world, not just at Starbucks. I'm talking 355 00:18:03,920 --> 00:18:07,399 Speaker 4: about Portugal, I'm talking about the beach, you know, and 356 00:18:07,440 --> 00:18:11,320 Speaker 4: I'm very highly compensated. And my employer either doesn't know 357 00:18:11,359 --> 00:18:13,800 Speaker 4: where I am or doesn't care as long as I 358 00:18:13,840 --> 00:18:16,679 Speaker 4: get my stuff done. Some of them moved upstate New 359 00:18:16,760 --> 00:18:19,560 Speaker 4: York to the Catskills or Lake George or something like that, 360 00:18:19,600 --> 00:18:22,000 Speaker 4: and they used to live in Manhattan or or one 361 00:18:22,000 --> 00:18:25,480 Speaker 4: of the nearby counties, but others went much further afield, 362 00:18:25,640 --> 00:18:29,919 Speaker 4: and countries realizing this, started to roll out all sorts 363 00:18:29,960 --> 00:18:34,200 Speaker 4: of incentives, remote work visas, special visas if you bought 364 00:18:34,240 --> 00:18:37,280 Speaker 4: real estate there, although not everyone did. You also saw 365 00:18:37,320 --> 00:18:39,520 Speaker 4: some cities in the US as well doing this, giving 366 00:18:39,560 --> 00:18:43,120 Speaker 4: incentives to more far flung cities who suddenly said, wow, 367 00:18:43,440 --> 00:18:45,800 Speaker 4: we can attract a lot of workers. Boise is a 368 00:18:45,800 --> 00:18:48,679 Speaker 4: perfect example. Boise, Idaho. I don't think a lot of 369 00:18:48,840 --> 00:18:52,680 Speaker 4: tech workers were living there in let's say the two 370 00:18:52,720 --> 00:18:55,480 Speaker 4: thousand and eight, but during the pandemic, a place like 371 00:18:55,520 --> 00:18:58,160 Speaker 4: that became much more popular, so much so that actually 372 00:18:58,240 --> 00:19:00,760 Speaker 4: property prices guess whatever is the proper prices? When a 373 00:19:00,800 --> 00:19:04,000 Speaker 4: lot of well off, well to do remote workers show up, 374 00:19:04,040 --> 00:19:07,520 Speaker 4: they skyrocket. Sometimes the locals get a little bit annoyed 375 00:19:07,640 --> 00:19:10,959 Speaker 4: at that, and then guess what happens. Sometimes the companies say, oh, 376 00:19:10,960 --> 00:19:13,280 Speaker 4: by the way, we now want you back. You have 377 00:19:13,400 --> 00:19:15,960 Speaker 4: issues around how do we tax those workers. We have 378 00:19:16,080 --> 00:19:18,360 Speaker 4: issues around how do we pay them? Do you give 379 00:19:18,400 --> 00:19:20,360 Speaker 4: a ten percent pay cut to someone who moves from 380 00:19:20,400 --> 00:19:23,200 Speaker 4: San Francisco to Boise or not. What we've seen with 381 00:19:23,280 --> 00:19:26,440 Speaker 4: digital nomads though, is that where cities like Lisbon, when 382 00:19:26,480 --> 00:19:29,480 Speaker 4: a lot of European cities had been very popular, we're 383 00:19:29,520 --> 00:19:32,240 Speaker 4: now seeing a bit of a migration. Both Portugal and 384 00:19:32,320 --> 00:19:34,960 Speaker 4: Ireland have kind of thrown out the welcome matt to 385 00:19:35,000 --> 00:19:38,560 Speaker 4: some of these digital nomads, rescinding some of the benefits 386 00:19:38,600 --> 00:19:41,720 Speaker 4: and visa related stuff they had extended in years past. 387 00:19:41,960 --> 00:19:44,159 Speaker 4: So those digital nomads are smart people. They are just 388 00:19:44,200 --> 00:19:46,880 Speaker 4: packing up and moving to places like soul Ho, Chi 389 00:19:46,920 --> 00:19:49,840 Speaker 4: Minh City, Manila. So what impact they will have on 390 00:19:49,880 --> 00:19:52,080 Speaker 4: those local economies remains to be seen. 391 00:19:53,080 --> 00:19:55,800 Speaker 3: When we come back. So what does the office work 392 00:19:55,840 --> 00:20:08,200 Speaker 3: week of the future look like? Sometht We're seeing companies 393 00:20:08,240 --> 00:20:10,840 Speaker 3: that had two days at home now saying they want 394 00:20:11,000 --> 00:20:13,200 Speaker 3: three days in the office, they want four days in 395 00:20:13,240 --> 00:20:16,199 Speaker 3: the office. Where do you think this is heading? 396 00:20:16,880 --> 00:20:20,560 Speaker 4: Well, I hate to say it depends, but a lot 397 00:20:20,960 --> 00:20:23,479 Speaker 4: does depend. If you go from three days in the 398 00:20:23,520 --> 00:20:28,600 Speaker 4: office to four and your turnover spikes, you know, and 399 00:20:28,640 --> 00:20:31,520 Speaker 4: you lose some of your most creative workers, some of 400 00:20:31,560 --> 00:20:35,240 Speaker 4: your best and brightest, or some of your younger employee 401 00:20:35,240 --> 00:20:37,080 Speaker 4: you know, people that you had spent a lot of 402 00:20:37,080 --> 00:20:40,600 Speaker 4: time recruiting and saying you are the future of the organization. 403 00:20:40,960 --> 00:20:43,439 Speaker 4: If you then lose those folks, I would hope that 404 00:20:43,520 --> 00:20:47,680 Speaker 4: a CEO might rethink that policy unless there's something else 405 00:20:47,720 --> 00:20:50,240 Speaker 4: here or she is really, you know, gaining from it. 406 00:20:50,600 --> 00:20:52,240 Speaker 4: On the other hand, you know, you could go from 407 00:20:52,280 --> 00:20:54,879 Speaker 4: three days to four days, and if you're giving people 408 00:20:54,960 --> 00:20:57,119 Speaker 4: reasons to be on all four of those days, and 409 00:20:57,200 --> 00:21:01,240 Speaker 4: people are able to balance integrate their work and their 410 00:21:01,320 --> 00:21:03,359 Speaker 4: life together, I mean, it's really funny. 411 00:21:03,359 --> 00:21:03,520 Speaker 6: We was. 412 00:21:03,560 --> 00:21:06,280 Speaker 4: We did a column the other week from Sarah Carmichael, 413 00:21:06,400 --> 00:21:09,280 Speaker 4: one of our opinion columnists, who said, these RTEO battles 414 00:21:09,280 --> 00:21:12,879 Speaker 4: sometimes pit spouses against each other where and I know 415 00:21:12,920 --> 00:21:15,680 Speaker 4: that for a fact. I'm in currently three days a week. 416 00:21:15,720 --> 00:21:17,920 Speaker 4: My wife is in two days a week in offices 417 00:21:17,960 --> 00:21:20,960 Speaker 4: in Manhattan. That works out very well because that equals five. 418 00:21:21,440 --> 00:21:24,240 Speaker 4: But if let's just say one of us moved to four, 419 00:21:24,960 --> 00:21:27,240 Speaker 4: or my wife moves from two to three, that is 420 00:21:27,280 --> 00:21:29,399 Speaker 4: going to shake up our life a little bit. Not 421 00:21:29,480 --> 00:21:31,480 Speaker 4: as much as if you know, we had two young 422 00:21:31,560 --> 00:21:33,719 Speaker 4: kids in diapers, but we do have two kids, and 423 00:21:33,760 --> 00:21:37,080 Speaker 4: we were balancing a ton of stuff outside of work 424 00:21:37,119 --> 00:21:39,360 Speaker 4: and outside of the home. What impact will that have? 425 00:21:39,600 --> 00:21:42,359 Speaker 4: We shall certainly see. But I would hope that any 426 00:21:42,440 --> 00:21:45,480 Speaker 4: business leader, any organization is not just going to do 427 00:21:45,560 --> 00:21:48,280 Speaker 4: this as a knee jerk reaction or just because they 428 00:21:48,359 --> 00:21:50,920 Speaker 4: read something about, you know, moving from here to there. 429 00:21:51,280 --> 00:21:54,359 Speaker 4: Talk to your employees, survey them, ask them, you know, 430 00:21:54,440 --> 00:21:56,080 Speaker 4: how the current policy is going. 431 00:21:56,960 --> 00:21:59,359 Speaker 3: Matt, always great talking with you. Thanks for coming on 432 00:21:59,400 --> 00:21:59,720 Speaker 3: the show. 433 00:22:00,080 --> 00:22:01,960 Speaker 4: Thanks a lot. Wes, great to be here. 434 00:22:02,840 --> 00:22:04,720 Speaker 3: Thanks for listening to us here at The Big Take. 435 00:22:04,880 --> 00:22:08,200 Speaker 3: It's a daily podcast from Bloomberg and iHeartRadio. For more 436 00:22:08,240 --> 00:22:12,399 Speaker 3: shows from iHeartRadio, visit the iHeartRadio app, Apple Podcasts, or 437 00:22:12,440 --> 00:22:15,440 Speaker 3: wherever you listen, and we'd love to hear from you. 438 00:22:15,720 --> 00:22:18,880 Speaker 3: Email us questions or comments to Big Take at Bloomberg 439 00:22:18,880 --> 00:22:21,960 Speaker 3: dot net. The supervising producer of The Big Take is 440 00:22:22,040 --> 00:22:26,320 Speaker 3: Vicky Bergolina. Our senior producer is Catherine Fink. Our producers 441 00:22:26,320 --> 00:22:30,760 Speaker 3: are Mo Barrow and Michael Falero. Kilde Garcia is our engineer. 442 00:22:31,040 --> 00:22:35,400 Speaker 3: Our original music was composed by Leo Sidrin. I'm Wes Kasova. 443 00:22:35,640 --> 00:22:37,960 Speaker 3: We'll be back tomorrow with another Big Take.