Norman Bertke, National Director of Operations for Global Workplace Solutions at CBRE, a leading real estate service provider, kicked off The Risk Institute’s “Returning to the Workplace in Times of COVID-19,” webinar on October 6, 2020.
Bertke’s presentation revolved around CBRE’s Workplace Sentiment Survey, undertaken to ascertain how the American workforce is thinking and feeling about remote work during the pandemic and office work in the future. The survey, with 10,000 respondents from 32 companies in 18 countries, provides insights into the perspectives and expectations of company leaders, managers, and employees. While these insights reflect a moment in time, they are a relevant gauge of workforce expectations and industry sentiment and will help real estate executives create strategies to redefine the work experience with the needs of everyone in mind.
Five Key Takeaways:
- Remote work looks and feels productive to most: 90%+ of employees and company leaders feel productivity is the same or greater while working remotely.
- Remote work is here to stay: 85% of employees prefer to work remotely at least two to three days a week in the future.
- The office is here to stay: 60% of respondents will return to the office in the future for community and collaboration.
- Real estate portfolios might look different: 43% of respondents would consider working for a company-provided location nearer their home, at least a few times a week.
- There is no one-size-fits-all for remote policies: 54% of company leaders prefer a hybrid arrangement for their team that combines working remotely and from the office.
In closing, Bertke highlighted the following points to consider, as we try to figure out what this new normal looks like. From an employee perspective, COVID-19 hasn’t impacted productivity, but it has certainly shifted sentiment toward the future. For many, the amount of time spent in the office may never return to pre-COVID levels, as employees have not only embraced remote work but have become accustomed to the autonomy that comes with it. However, with a renewed focus on the quality of both workplace experience and design, it is clear the role of the office as a destination for employees is still important for companies to maintain.
The long-term outcome of COVID-19 will be a combination of changes to workplaces, policies, and real estate portfolios, and each company will establish its own stance on remote work and the role of the office. Regardless of the destination, the road to this future should start with culture and be paved by a data-driven and people-centric approach to change.
Tim Spencer, Chief Financial Officer at Safelite, the nation’s leading auto glass specialist, expressed that the pandemic prompted his company to challenge conventional wisdom about the way they operate. And although it is difficult to predict the future, he said, we’re now in a unique position of reimaging how it might look.
Safelite does business in 34 countries on five continents, and when the pandemic led to the closures of France, Spain, and Italy, the company took notice and immediate action, developing a plan to protect both, first and foremost, its liquidity and its associates and customers.
Among the strategies they used were furloughing 8,000 non-essential staff, eliminating advertising, and renegotiating supplier payment terms and rents. Steps to protect customers and staff included increased cleaning and sanitization, implementing the use of PPE and social distancing, and providing touchless drop-off. The steps had some unexpected and positive outcomes. These included an increase in productivity while maintaining a high service level, achieving a higher Net Promotor Score, the acceleration and use of new forms of communication, and an increased share of the market.
Despite this enormously positive response in performance from associates, there were challenges that arose. The company experienced withdrawal in engagement from and with associates across the board. This is particularly difficult, notes Spencer, when engagement has always been a focal point of the company and building the culture with new hires a vital part of onboarding. In connection, the lack of face-to-face communication and collaboration onsite with peers has made it more difficult to establish and build relationships, potentially limiting creativity and innovation.
Technology plays a central role in how Safelite operates. With this new normal, associates have to be more resourceful and self-motivated to learn new technical skills and problem solve. In conjunction, inherent in remote work is the increased likelihood of hacks and/or cyberattacks.
Looking to the future, Safelite and other companies are compelled to weigh up the benefits/opportunities and the concerns/risks of a hybrid work model. While there are many considerations, benefits might include improved cost flexibility and responsiveness and increased flexibility for associates. Concerns relate to maintaining culture, brand, sense of identity, and required investment for long term technology solutions.
Spencer identifies four areas for measuring Safelite’s success in the future, specifically:
- People: Continuing to drive engagement to attract top talent by making purposeful investments in physical environments in order to address associates’ evolving needs and expectations.
- Place: Create a flexible and agile physical environment that supports innovation, reflects the company’s values and brand, and can evolve as business needs and people change over time.
- Technology: Integrate consistent technology across the workplace to provide effortless collaboration regardless of location.
- Savings: Achieve fixed cost reductions and increased cost flexibility by reducing the amount of square footage leased.
The ability of many organizations to respond effectively to the post-COVID environment will be critically linked to planning and flexibility. Safelite is continually evolving and making decisions based on data with their team, and Spencer believes the company will come out of this experience a better organization.
John Mark Tichar, Vice President, Sales Leader at Oswald Companies, one of the nation’s largest independent insurance brokerage firms, provided attendees with insights into the current state of the insurance industry. As if the pandemic wasn’t challenging enough, he said, last year the industry started to go into a correction, following ten years of a soft market. This hard market, and with it a continued correction of pricing and terms, will continue through 2021. For the insureds, this means rate increases, reduced capacity, and higher attachments and deductibles.
COVID-19 brings with it its own set of real estate challenges related to business interruption insurance. States including NY, NJ, PA, OH, MA, and SC have been retroactively attempting to change policy language to cover communicable disease and/or pandemics. This despite the fact that in 2006 ISO successfully worked with states to get Virus Exclusions approved on policies. At the time, Tichar said, it was a risk that was not being rated, let alone changed for, but the industry wanted to make sure they didn’t get pulled into this exposure.
Since the onset of the pandemic, 1,000+ lawsuits have been filed against insurers for Business Interruption claims, the majority from retailers, and foodservice + dining places. While Tichar claims COVID-19 and other communicable diseases do not meet the definition of direct physical loss, by and large court is in favor of ruling as such. The takeaway being that Business Interruption Coverage continues to be tied to direct physical loss.
Pollution Exclusions are generally in all liability coverage, but in Ohio, for example, case law makes it difficult for carriers to deny coverage and exercise this exclusion. Ohio Bill 606, which grants immunity to essential workers who transmit COVID-19, compounds this problem insurers are facing in the state. In light of all this, many insurers are attempting to limit their liability by confronting circumstances that may excuse or delay their obligations to perform under existing contracts due to the occurrence of a force majeure event, or events that are “reasonably foreseeable.”
To date, the cancelation of sporting events like Wimbledon and the 32nd Olympic Games, and concerts from the likes of Sir Paul McCartney have cost $200+ billion. Germany’s Allianz, for example, is $794 million in the hole due to event cancelations.
The Risk Institute will be sponsoring more virtual webinars in the coming months on topics pertinent to the industry, Institute members, and the community at large.
Register here for The Risk Institute’s Annual Distracted Driving and Teen Driver Safety Forum, scheduled for Wednesday, October 21, 2020, from 9:00 am to 12:00 pm EST.
Written by Jack Delahunty, in association with The Risk Institute