Office Hoteling / Telecommuting: Emerging Trend or Wishful Thinking

Office Hoteling / Telecommuting: Emerging Trend or Wishful Thinking

Office “Hoteling”, Telecommuting, Office Sharing: Conduct an online search for any of these terms and you might conclude from the results that these “emerging trends” are here to stay. While they all may sound like compelling ways to reduce real estate costs, they each have their own unique challenges. In this post I will discuss these strategies and detail why they may not be the right solution for everyone.

I first heard about office hoteling and telecommuting in the early 1990’s while a young broker at a large international brokerage firm. Hoteling, as the name implies, is the practice of having multiple employees share a single physical office space at different times, just as multiple travelers share a single room at different times in a hotel. When these employees are not in the office, they would be “telecommuting” or working from home. I was attending a firm-wide conference and I remember sitting in a large ballroom with my colleagues as we listened to a consultant from a large accounting firm outline the reasons why hoteling was here to stay and that it will inevitably be the demise of the commercial real estate industry as we knew it. He predicted the end of new office construction and further predicted that existing office buildings would be repurposed into apartments or condominiums. While the conversion of older office buildings into residential units has happened on a limited basis, much of what this consultant predicted has not come to fruition.

Though these concepts have their merits and certainly have all the fixings of sustainability, they have never truly gained the kind of ground the experts had predicted. Research suggests that approximately 23% of employees surveyed “telecommute”. However, many of these employees often do so sporadically or only do so to accommodate personal responsibilities outside the office. Further, most of those who do telecommute still maintain a dedicated space within their company’s offices. From a cost-containment standpoint, office hoteling and telecommuting sound like a great idea, but as many firms have come to learn, it is an idea that has major difficulties in execution.

When employees work together in the same environment, they tend to collaborate more. It is this collaboration that has been one of the primary reasons the office environment has been so successful for so long. Consider the recent decision of Yahoo CEO Marissa Mayer. In a highly publicized decision, she ended telecommuting at Yahoo. An excerpt of her decision follows:

“To become the absolute best place to work, communication and collaboration will be important, so we need to be working side-by-side. That is why it is critical that we are all present in our offices. Some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people, and impromptu team meetings. Speed and quality are often sacrificed when we work from home.”

While I don’t expect everyone to follow Yahoo’s lead, I also do not expect hoteling or telecommuting to gain significant ground. While the advent of new technologies makes it easier and easier to get things done away from the office, there will still be a need to collaborate with one another. And until someone comes up with a better solution, the office will be where it happens.

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