By CHUCK GREEN
Does anyone need some elbow room?
When COVID appeared to seize control over, well, nearly everything, there seemed to be ample space in offices – including those related to the mortgage industry – across the country. Desks? It was almost as though some hadn’t been occupied in decades.
That scenario is gradually changing. According to the Spring 2023 U.S. Office Occupier Sentiment Survey by CBRE, 65% of respondents say their companies are requiring that employees return to the office.
71% of financial and professional services company respondents said they are required to be back in the office, and most of the companies they work for expect attendance for more than half of the week.
So should mortgage professionals be back in the office? It depends.
Some businesses require collaboration, others require culture, James Bailey, a professor of leadership development at the George Washington University School of Business, told The Mortgage Note.
“But the mortgage business doesn’t require either. Brokers are independent operators that can easily ring up a colleague for a reference,” Bailey said.
Bailey said it’s important to bear in mind that there are a lot of sides to the mortgage business. Some employees may need to return to the office on a regular basis while others do not.
“That’s going to be interpreted as iniquity and the only way to get people back is by creating ‘win-win’ scenarios for everybody,” Bailey said.
For those wary of returning to the office, flexibility’s the name of the game.
“Workers generally desire flexibility with where and when they work, driven by a better work-life balance,” Bailey said.
Bailey said mortgage companies can use the opportunity to reduce their office footprint, and many of them are.
“They don’t need to have employees gather to achieve performance. So why pay for the office space? Paradoxically, the very business that secures space is going to reduce their own,” Bailey said.
Gleb Tsipursky, CEO of the future-of-work consultancy Disaster Avoidance Experts, told The Mortgage Note that, “while it’s not appropriate to make a blanket statement, it seems that many companies — including those in the mortgage sector — are implementing strategies to bring employees back to the office for part of the work week.”
“However, the extent to which this is being enforced varies considerably. Certain companies see the value in office interactions for fostering collaboration and maintaining the corporate culture. Yet, others appreciate the cost savings, employee satisfaction, and surprisingly maintained or even enhanced productivity associated with remote work,” Tsipursky said.
Tsipursky, who is the author of “Returning to the Office and Leading Hybrid and Remote Teams: A Manual on Benchmarking to Best Practices for Competitive Advantage,” said some workers might welcome a return to the office, craving the social interaction and the structured environment that it provides.
However, he continued, “most resist, having adapted to the flexibility, reduced commute times, and personal comfort that working from home offers. It’s important to remember that after such a prolonged period of remote work, many have restructured their lives around this setup and may find a transition back to the office stressful or inconvenient.”
Tsipursky said company leaders should strive to understand the concerns of their employees and accommodate their needs where possible. This might mean adopting a hybrid approach, where employees can split their time between home and the office, or giving employees the option to work from home full-time if they can be successful and have a good reason to do so.
“Moreover, enhancing the office environment to make it more enticing and supportive can be beneficial. Ultimately, effective communication is crucial – companies need to convey the rationale behind their decisions while also listening to and addressing their employees’ feedback,” Tsipursky said.
Chrissey Hunsaker, vice president of compliance management services for mortgage origination and servicing at Consolidated Analytics, said company leaders are missing out if they focus solely on getting employees back into the office.
Hunsaker laid her case out by saying that qualified leaders can effectively manage a remote team, saving companies money in office space rent, equipment, and other expenses.
Companies are eager to entice employees to return to the office, but Hunsaker asks where the incentives are for high-producing remote employees.
“We’ll reward poor work ethic and incentivize return to an expensive office model, not train our managers in the unique skills needed to effectively manage remote teams, and don’t reward quality remote employees,” Hunsaker said. “Sounds like a fatal model, doesn’t it?”
As the commercial real estate market continues to change, office space is down, but not out.
Richard Barkham, global chief economist for CBRE in Dallas, said it may take up to nine years for the office market to fully recover but it is important to remember that not all of that sector has been badly hit by drops in value.
Barkham said that a large portion of the vacancies are in a minority of the stock, with 80% of the rise in vacancies in 10% of office buildings.
The office buildings with higher vacancy rates tend to be older, have less amenities, and are located in less desirable work settings. Barkham said these buildings will probably have to be converted or pulled down due to fundamental challenges.
The good news for offices, Barkham said, is that nearly four out of five global large companies are committed to maintaining a workspace for employees.
“We’ve just done a global survey of big companies, occupiers, and we’re very pleased to find that 77% of global large corporations remain committed to locating in the office either mainly full time, but sometimes half time in the office. There’s a big portion of corporate America for whom the office remains fundamental to their operating model,” Barkham told The Mortgage Note at the National Association of Real Estate Editors conference in Las Vegas.
Barkham said because of high interest rates, companies may be taking advantage of a flexible workforce to reduce office space, but office leaders recognize the importance of having people at work in-person.
“I do think that demand for office will come back when the economy comes back because so many companies need that as part of their secret sauce for getting their culture, training up young people, getting new ideas flowing. The office sector is hard hit at the present time. It’s down, but it’s not out, and it will come back,” Barkham said.
CBRE is a commercial real estate service and investment firm.
Editor Kimberley Haas contributed to this report.
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