Like virtually every other company, Swivel has been re-thinking how we use office space in a post-COVID world. I’ve said loudly to anyone that will listen that I don’t think things will ever “return to normal” after the pandemic has passed.
Like many, we’ve learned that while it has its issues and challenges, remote work really does work, and it’s here to stay. Our belief is that it works best when combined with the option for individuals or teams to choose to work in a centralized office location when the work demands it. Note the words ‘option’ and ‘choose’; we think that the right way to structure what amounts to a hybrid work environment is to let employees and managers design their optimal working environment.
After we came to this conclusion we decided to put it to the test with our own people to see what they wanted to do. This post is a summary of our experience over the past 60 days with a software-driven hybrid work platform that we built for just this purpose.
Our situation pre-COVID
Prior to the pandemic, we were like most small- to mid-sized tech companies across the country. We had our own private office lease (thank goodness it was short-term and we had a good landlord). We had just under 3,000 sf of space to house our company of 20 with planned growth to 40, using the then-typical and now cringe-worthy “pack-em-in” layout.
We were in a class B building with no covered parking, kind of off the beaten path in the suburbs of Austin - no downtown showplace for us. We didn’t want to spend our precious VC capital on expensive real estate just to send the message that we were ‘hot’ or to guilt our employees into working late into the night.
Our all-in real estate cost including furnishings and services was $11,000 per month, or roughly $550 per employee per month. All things considered, I thought we were pretty responsible with our real estate spending.
Along came COVID and everyone went home to work. Also like everyone, we continued to pay rent for space no one stepped foot in for the next four months.
Enter a few Cases of Work from Home Fatigue
After 3 months or so, some of our employees began to come down with symptoms of WFHF. These tended to be the extroverts that craved physical proximity and ad hoc interaction with other humans not in their immediate family. A few others wanted a physically different place to go that provided a demarcation line between work and not work. But others indicated that they liked working remotely better than coming to the office and questioned the need to ever return on a regular basis. Sure I’ll come in for the occasional team or all-hands meeting, but other than that, the majority of my team and I are currently more productive working remotely.
So, like all good data-driven companies, we decided to do a survey (see figure). We asked people to indicate their preferred work modality, giving them the option of in office all or most days, remote all or most days, or a blend. Initially, I was surprised that a clear majority indicated they wanted to be in the office most days. But, when I dug a little deeper, the results seemed ambiguous because we didn’t specify ‘now’ versus ‘once the pandemic is passed’.
Based on our findings, we decided it was time to ‘return to the office’, but using a managed model that would allow us to test and refine how much space we really needed, and how to best locate, configure and operate that space to fully accommodate the way our people really want to work.
From a Full-Time Office to a ‘Hub’ Location
Because the terms of our lease were unusually flexible, we were able to move locations without a big lease break-up fee. We wanted less space, but we weren’t sure what our ‘steady state’ office size would really end up being, so we just took over a 12 month sublease of a 2,000 sf space with a friendly landlord.
We re-visited our location assumptions, focusing on those that were most likely to commute to the office most days. That led us to choose a location closer to the center of Austin just north of downtown.
Once we did that, we needed to think about and set a bunch of operating policies that we’d never considered pre-pandemic. This involved:
- Researching local, state and federal orders and guidelines for opening offices, and the provisions for social distancing and PPE. This turned out to be much harder than you’d think, and it’s made even more complicated because it’s changing almost every day. We built a community site, involved our property management team, and invited other tenants of the building to share this knowledge.This made the process a lot easier.
- Establishing our own particular health and safety policies around office use. That ended up including policies for self-quarantine for certain symptoms, recent travel or certain public gatherings over a certain size. Our software tool allowed us to communicate those policies to everyone that wants to use the office, and requires them to self screen before each office visit via a few clicks on their mobile phone.
- Mapping our office space for acceptable uses. We didn’t want to fully re-furnish the space to assure social distancing, so we needed to map which desks and meeting areas could function as dedicated desks, hot desks or reservable meeting areas.
I felt it was necessary to do all of this out of a moral obligation to the health and safety of Swivel employees. It may or may not have the additional benefit of reducing liability, but even so, that wasn’t our main motivation.
Armed with a system for keeping track of all of this, we launched our reservation system and invited employees back to the office. Several folks jumped right in and established a new office routine, while others (myself included) made the occasional visit for a working session and still others stayed away.
Our scheduling system worked flawlessly, and our people began choosing daily where they’d like to work.We set our capacity limit at 50%, which was the consensus of the guidance when applied to our particular layout. It really helps that the software figures this out for us.
We’ve been surprised to see that actual usage of our hub space has been nearly the inverse of what we expected from the survey. Clearly this could just be a reflection of the on-going pandemic, and usage patterns may change once a vaccine emerges. But, at least for now, we’ve found that we need far less space than we’d thought.
We have only had a few days when someone wanted to check-in to work in the office but haven’t been able to book a desk. So for right now, based on the preferences of our employees, we have just the right amount of space to accommodate those who’d like to come in, while safely operating at 50% capacity.
In addition to learning how many and which people want to use the office each day, we also saw which teams prefer in-office work and collaboration. In our case, our sales and product teams want to work from the office the most, and our marketing and design teams the least. Of course this will change as Swivel grows, but it’s good to have a way to track it each week as it does.
This is important to us going forward, because we want to be able to provide the best workplace strategies for specific job functions in hi-tech. This way, we can be as competitive as possible in hiring and recruiting new talent.
Dollars and Cents
Because our software allows us to enter all sorts of metadata associated with our office space(s) and to run analyses and comparisons, a pretty clear picture is emerging that will allow Swivel to save substantial amounts of money on our real estate footprint.
Even though we are now spending slightly more for our hub space on a per-square foot basis - $46/sf compared to $50 - once you adjust for our new pattern of hybrid usage, our monthly cost per employee has dropped from $550 to $345. And, we were able to upgrade to a more attractive location that better correlates to where and how our people want to work going forward, while taking less space and saving money in the process.
That being said, I don’t see this as a steady, fixed state of affairs. Our early experience and initial data suggest that our workspace profile and usage patterns will continue to evolve and change in response to the pandemic, as well as the rapidly changing norms around the work preferences and locations of our people.
As a high growth company whose workforce is rapidly changing, Swivel is committed to a flexible workspace profile that will allow us to quickly add, remove, or change the size, design, layout, and locations of our offices. We’ve developed a specific set of guidelines to help us do this:
- No long-term leases or subleases (nothing greater than 12 months). We’ll pay a higher cost per square foot in exchange for a shorter term all day long. Multi-year leases usually end up being too small or too large, and the costs for transacting out of them can easily cost tens or hundreds of thousands of dollars. Brokers may try to steer you in a different direction, even your own tenant broker, since they get paid a commission on the total leased value.
- Highly configurable space layouts that use moveable design elements instead of lots of fixed-wall construction.
- Continue to gather detailed, daily and even desk-level data about how offices are used. Combine that with where people live to plot the optimal size and locations for hubs and satellites.
- No vanity locations (CEOs have a bad habit of this). Do our best to ensure that our culture is manifest in our systems and personal behaviors, not in our office edifice.
- Keep a simple, functional set of criteria for selecting office spaces, and avoid ‘falling in love with’ a particular building. In Austin, there are at least 5-10 suitable options in any given neighborhood of a particular class of space.
I’m genuinely intrigued by how rapidly our workforce and workplace patterns have changed and how the best companies can lean into this and use it to strengthen their culture and competitive posture. I try to read and learn from the experience of others, and we’ll continue to publish our own experience to anyone that’s interested.