The Office Market Has Likely Changed Forever. Look to the Labor Market for Clues on How Big the Shift Will Be.

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The ongoing tug of war between employers and employees on the return to the office versus remote work will accelerate as pandemic-related impacts fade, and labor market conditions will play a significant role in how much office space may be needed and how it will be used, according to a new white paper released today by the Mortgage Bankers Association (MBA) titled, A Framework for Considering Office Demand in a Post-Pandemic World.

“Thanks to a very tight labor market and technological advances, hybrid work reigns two and a half years since the onset of the COVID-19 pandemic, with employees at many companies coming into the office a few days a week,” said MBA Senior Vice President and Chief Economist Mike Fratantoni. “The extent to which this trend will continue – and what it means for the office market – will greatly depend on employees’ and employers’ costs and benefits of being in the office versus remote, and whether a transition to a looser labor market tilts the bargaining table to employers and their preference for more in-person collaboration.”

MBA’s white paper, co-authored by Fratantoni and Jamie Woodwell, MBA Vice President of Commercial Real Estate Research, looks at the relative benefits and costs of remote and in-person work to employees and employers. It finds that in the near term, remote work can be just as, if not more, effective than office work in terms of “getting the job done,” while also providing a range of tangible short-term benefits. The findings also reveal, however, that companies and workers rely heavily on in person interactions to develop workplace capital, helping them thrive over the long term. The pandemic has elevated the weight of the near-term benefits of remote work while reducing the pull of developing workplace capital.

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Image: Pixabay

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