A Real Economy publication

2022 technology industry outlook

Jul 21, 2022

Technology industry outlook key takeaways

Technology companies have implemented several strategies to resume working from office locations.

Some have taken a phased-in approach, while others are more open to allowing continued work from home or remote locations.

With no one-size-fits-all workforce solution, organizations are attempting to facilitate in-person connections while also supporting flexibility. 

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Technology industry Economics

What does the return to office look like for tech companies, both large and small?

It is becoming more and more obvious that a return to the office is anything but normal and consistent as tech companies emerge from the lockdowns and restrictions of the pandemic. The new normal is looking different for different companies. Many have pushed their employees back to offices and sprawling campuses, some have relocated altogether, others have shuttered their offices and cancelled large lease commitments and some have encouraged their people to work from anywhere anytime.  

According to data tracked by Kastle Systems, which measures office occupancy in 2,600 buildings across more than 40,000 businesses in 47 states, the national average office occupancy continues to hover around 43%. In tech-heavy hubs like San Francisco and New York, the rates are noticeably lower, with occupancies of 35% and 37% respectively. Only Austin, another tech-heavy city, has an occupancy rate above the national average, rising above 60% in the final week of April 2022. 

U.S. office occupancy rate chart

This year has seen many tech companies announce what will be expected or encouraged from their employees going forward, with differing strategies. In March, Apple laid out a phased-in approach, with its corporate employees beginning to work from the office one day a week, expanding to two days a week by mid-April and then to three days a week by mid-May. In a widely shared memo prepared by CEO Tim Cook, he pointed to the “irreplaceable benefits of in-person collaboration” as a reason to bring the team back to the office. A similar protocol has been outlined by Google.

However, others are more open to their workforce continuing to work from home or from locations outside the normal office setting. Twitter and Meta Platforms (formally Facebook) both announced that their offices have reopened to employees, but encouraged staff to work in the environment where they feel most comfortable and productive, which includes working remotely full-time.

And the group of companies that have instituted a “virtual-first” culture include the likes of Dropbox and Airbnb, with both adopting a fully remote work environment for their workforce. Dropbox, the developer of secure file-sharing technology for consumers and enterprises, took this stance early in the pandemic, announcing in late 2020 an abrupt shift to fully remote work after being forced to do so in response to the pandemic. A blog posted on the company’s site references a study it conducted alongside The Economist, reporting that at home, knowledge workers can be less distracted, have more focus time and be more productive during their workday. Dropbox also reported that 90% of its workforce did not want to return to the rigid five-day a week in-office work week. 

The flexibility and variety of back-to-office plans among tech companies in the United States show that the once-universal work week is now much more individually unique. A study published by the journal Nature Human Behaviour, focused on data derived from emails, calendars, instant messages and video/audio calls of the more than 61,000 U.S. Microsoft employees, revealed that the overnight shift to remote work caused by the COVID-19 pandemic resulted in a static network of collaboration and silos of innovation, making it harder for employees to acquire and share new information across their internal networks. This study contrasts with the Economist study that Dropbox relied on to support its strategy to become a remote-first workforce, which revealed productivity gains, improved satisfaction and fewer distractions.

One thing is clear: Companies are adapting to a new normal, responding to the needs and desires of their workforce, and deploying and utilizing more and more digital technologies that will enable and empower their employees, whether they are in the office or working in a fully remote environment. Technology companies of all sizes should look to these examples of the modern workforce and aggressively develop their own unique culture that brings together the collective skill sets of the entire organization.

The future of work will require a multifaceted approach that supports flexibility and recognizes the demand a five-day-a-week commute puts on employees, while cultivating an environment where innovation, development and deployment can happen at the speed and efficiency the tech ecosystem demands.

There are no one-size-fits-all solutions—but while the trend is to allow more remote work, organizations are also recognizing that in-person or in-office interactions are more important than ever. Therefore, companies are developing unique programs to facilitate those connections as well as creating robust strategies for engaging and connecting a dispersed workforce. The future of work will require a multifaceted approach that supports flexibility and recognizes the demand a five-day-a-week commute puts on employees, while cultivating an environment where innovation, development and deployment can happen at the speed and efficiency the tech ecosystem demands.

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