Working from home (WFH), the necessity of the pandemic, is now under attack from all sides but that new way of life is far from dead, especially at agencies.
A string of big name companies, including Amazon, want everyone back in the office a full five days a week.
Amazon CEO Andy Jassywould said the move would help staff be "better set up to invent, collaborate, and be connected”.
In Sydney, public servants have been ordered back, in a move to improve mentorship and building culture.
Among advertising agencies, a 100% return to the office would mean additional overheads.
The global groups have saved so much money cutting office space that it makes a full return to the office expensive.
Much has been said among the senior ranks at agencies of the need to have staff in the office, to interact creatively and to help mentor the non stop flow of early career people.
This is countered by other staff, mostly middle ranks or juniors, who love saving commuting time, finding a better work/life balance with more margin for family and personal pursuits.
“While we don’t doubt that there will be individual agencies who will feel emboldened to mandate full returns-to-the-office, it may be the case that many agencies have pre-determined the outcome by reducing their real estate footprints in recent years,” said industry analyst Brian Wieser at Madison and Wall.
“This occurred as it did partially in recognition of the need to work differently in the immediate aftermath of the pandemic and perhaps more-than-partially to reduce expenses.
“Because these cost reductions have contributed meaningfully to margin improvements (or helped offset other cost increases), it seems unlikely that agencies could return to pre-pandemic office-based working models without feeling some assurance that resulting revenue growth would offset higher costs.”
Wieser looked at the numbers.
IPG between 2019 and 2023 reduced its occupancy expense as a percentage of net revenue to 4.6% from 6.3%.
WPP cut its similar establishment expense as a percentage of net revenue to 4.3% from from 6.2%.
Over 2019-2023, IPG reduced its real estate cost per average employee by -21% while WPP cut by more than a third (-34%).
Wieser calculates the earnings margins for both IPG and WPP would have fallen without the real estate cost savings.
In Australia, working from home has taken hold but those who moved to regional areas during the pandemic may have a problem. Few employers are open to 100% working from home.
Amazon has told those who can’t be in the office to look for another job elsewhere.
Lee Shorter, practice manager, design & technology at recruiters Aquent Australia, said most candidates we speak to seem to be happy with two to three days per week in the office.
The majority of clients prefer three to four days.
So three days on site is the happy middle ground.
“One of the big issues with the hybrid model is where the number of days in the office are mandated but the specific days required to come in are not,” said Shorter.
“It's great to give the flexibility for employees to choose, but often means people coming into half empty offices and still conducting meetings virtually. They're left wondering what the point of coming in was when their immediate team and stakeholder group aren't with them.
“The jobseekers having the toughest time appear to be those who moved regionally when working fully remote was the norm.
“Those roles are now few and far between, so they're faced with a choice of being out of work for extended periods while they wait for such an opportunity to arise, making the move back to a big city, or dealing with very lengthy commutes.
“Full-time roles working onsite are still very much undesirable. I'd say on the whole there are more agencies wanting this than for in-house roles, again highlighting the lack of flexibility as a key reason why agency folk look to make the move brand-side."
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.