By CHUCK GREEN
More people in business, including those in lending, are returning to in-person work after the pandemic.
According to a survey released by Resume Builder last fall, 90% of companies will require employees to return to the office in 2023.
Disney laid down the law at the start of the year, making it mandatory for corporate employees to show up at the office – starting March 1 – four days a week. Starbucks corporate employees were told to report to work in person at least three days a week by the end of January.
Based on data from employers in 10 major U.S. cities, badge-swipe tallies collected by security firm Kastle Systems indicated office occupancy reached 50.4% for the week ending Jan. 27, according to Editor Saundra Latham at Linkedin News.
Cities with the largest percentage of employees returning to the old cubicle include Houston and Austin, Texas. San Jose, Calif., had the lowest percentage.
That doesn’t mean there’s not at least a little pushback among workers. Amazon employees expressed anger last week over their mandate to return back to the office at least three days a week starting on May 1.
Kimberly Merriman, professor at the Manning School of Business at UMass Lowell, told The Mortgage Note companies have required people to come back at different rates.
“But what’s missing from this discussion is the competitive advantage for companies that can offer workers geographic flexibility,” Merriman said.
Merriman explained that in one study on geographic flexibility at work people who transitioned from geographically restricted employment to a work-from-anywhere arrangement following their organization’s pandemic policy changes demonstrated greater effort and productivity on the job.
Merriman said that in order to bridge the current divide, business leaders need to ensure equity and fairness, listen to what employees want, and be flexible.
Julia Taylor Kennedy, executive vice president and lead researcher at Coqual, a New York City nonprofit think tank that conducts research on diversity, equity, and inclusion in the workplace, said there are things employers can do to encourage employees to return to the office.
Sometimes, a little incentive doesn’t hurt, observed Kennedy.
“Many are giving perks. We see companies providing bigger commuter stipends, lunch, funding more for retreats,” Kennedy said.
Ultimately, Kennedy said it’s a good idea for people to head back to the office because, for one thing, there are key moments where team building in person is hard to replace.
“Having that time can provide a bedrock of trust if there is a disagreement or miscommunication,” Kennedy said.
Are workers in the mortgage space calling the office home again?
“The short answer, I’d say, is yes,” Larry Silver, CEO of Superus Careers in Baltimore, Md., told The Mortgage Note. “That’s predominantly because, especially on the production side, the mortgage space is a collaborative environment. When you’re trying to problem solve or complete a project, it’s a lot easier when somebody’s down the hall.”
While Silver said collaboration is a factor in other industries as well, he believes the mortgage industry is unique.
“It requires a lot more hands-on participation. It depends on how sensitive and complicated a transaction is and the number of people involved,” Silver said.
James Bailey, professor and Hochberg Fellow of Leadership at the George Washington University School of Business in Washington, D.C., told The Mortgage Note that less than two-thirds of the professional workforce has returned to their offices but some companies may require in-person participation as a matter of functionality.
“There’s not reliable data on which segment industries are requiring folks to return to the office, but it’s not much of a mystery. Businesses that require cross-functional collaboration are much more likely to insist on some degree of office presence,” Bailey said.
Conversely, businesses that don’t need extensive cross-links have no reason to summon people back to the office, he continued.
“Why not reduce the real-estate footprint when employees are fairly independent? Make no mistake, facility managers across the globe are chomping at the bit to reduce carpet space. Oddly enough, the mortgage business —an industry that underwrites square inches—is likely reducing the very inches they fund others to lease. Ironic, right?”
Bailey added that mortgage brokers can typically work from home if allowed by their employer.
“Mortgage brokers don’t really rely on collaboration. A mortgage is referred, vetted, shopped, and guaranteed. The broker doesn’t need to work—and I mean truly work—with anyone in their office to secure the deal. Unlike some industries like banking, where the deal has to pass through several levels, mortgage brokers can be lone actors. So why fund the space they work in? Let them work at home,” Bailey said.
The mortgage business, he continued, will benefit, at least in the short term, by reducing real-estate expenses.
“Whether that savings will cost in the long term remains to be seen,” Bailey said.
How is office space doing in the world of commercial real estate?
There was a decline in the demand for office space which became aggravated by the pandemic. The office vacancy rate has risen by 3% since 2019, according to Oleh Sorokin, an analyst of commercial real estate research at the National Association of Realtors.
“With employers demanding a return to the office, many people have already moved back to big city centers. However, that alone was insufficient in dropping vacancy rates in these areas. People continue to move to less dense areas for better affordability. With hybrid work being the new normal, suburbs and smaller areas near big city centers will continue to attract movers,” Sorokin wrote in a blog published on Feb. 21.
Tech hubs that had high office vacancy rates prior to the pandemic are performing poorly, according to Sorokin. The most significant increases in vacancy rates are in places such as San Francisco, Portland, Seattle, and Denver, as many companies have migrated to more affordable places.
The best performers include Atlantic City, Naples, and Palm Beach.
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Troy Williamson, a senior loan officer at Cornerstone Home Lending, said that he is seeing the results of homebuyers flocking to the Sun Belt for warmer weather and a better quality of life. https://t.co/jJb5FseVyk
— The Mortgage Note (@TheMortgageNote) February 21, 2023
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