At this point, many companies have had their employees working remotely since February or March of 2020, and they may be very eager to bring staff back to the office. Some companies, in fact, are insisting on it.
Morgan Stanley, for example, has made it clear that workers are expected to return to in-person work come September. And many major companies are targeting the latter part of summer or early fall to have employees start reporting to office buildings again.
But not every major employer is set on a five-day-a-week office return. Synchrony Financial (NYSE: SYF) will not be allowing employees to return to the office five days a week -- even once things improve on the coronavirus front. Rather the company insists there's no reason employees shouldn't work from home at least a few days a week.
A mix of opinions
Though some players in the financial field are insistent that workers return to offices at full capacity, others are taking a more relaxed, hybrid approach. UBS, for example, intends to let most employees adopt a hybrid work schedule that splits their time between office buildings and their own homes.
Synchrony, meanwhile, surveyed its employees and found that 85% wish to work from home even after the pandemic is over. And the company is taking those findings to heart.
Offering workers more flexibility could help with employee retention. And it could also be a huge motivator. If workers feel that their needs are being met, they're more likely to push themselves to do better and be more productive. Plus, in some ways, letting employees work remotely part of the time actually makes them more available to their employers, not less, by virtue of not having to commute.
Just as importantly, allowing employees to work remotely part of the time can help companies slash their costs by limiting the amount of office space they need to maintain. Synchrony says that reducing its office space will help save the company $250 million in expenses this year alone.
Of course, hybrid work schedules may be good for employees, but for real estate investors with money in office buildings, they're problematic. Office buildings are looking at record-high vacancy rates following the blow of the pandemic, and if more companies start adopting hybrid models -- and shedding square footage in the process -- their recovery could be disastrously prolonged.
The Millionacres bottom line
Many office real estate investment trusts (REITs) saw their value decline in 2020 and are hoping for a strong return to in-person work to drive revenue up. So, when companies like Synchrony make statements shunning a five-day-a-week return, the results can be financially devastating. That's something investors will need to keep on their radar as companies finalize their return-to-work plans.
Adding to the problem is the presence of the highly contagious delta variant. Apple is already pushing back its office reopening plans by at least a month in light of the recent uptick in coronavirus cases. If more companies decide to follow its lead, it could really hit office REITs hard, especially in an age when hybrid work models are becoming more and more common.