Post-COVID New Normal: Paradigm Shift in Work Environment
Recently on CNBC, a panel of stock experts discussed the changes that will happen to the value of stocks like Zoom and Peloton. Will those stocks lose value when the pandemic subsides? They shouldn’t because many people will not be returning to the conventional workplace. The stock experts have missed something key not only in their evaluation of some stocks, but more importantly, the paradigm shift happening in the workplace.
As I wrote several months ago: “New technologies available, like Zoom and overall connectivity, have made that decision [to work remotely] even easier to make, not only for them, but for the companies and organizations they work for as well…With more people opting to ‘work at home’ to avoid confrontation and more companies wanting to ‘reduce their corporate footprint’ in commercial office space, mass transit systems, which were seen as critical fifty years ago, are now being severely impacted.”
The work from home crowd is going to stay-at-home for the most part. Companies are already planning on more workers working from their homes and the shift is already occurring across the country. With the average productivity gain measured at 22-26%, these workers are producing more from home and companies will be spending less on their corporate workspace as they shrink their footprint for economic reasons.
The impact of Zoom technology
In addition to the change in demand for mass transit and corporate space, new technologies like Zoom are here to stay and are expanding. Companies and organizations are looking at keeping part of their workforce in a permanent work from home capacity.
Zoom has scalability: 200, 300, 400 users. My wife uses Zoom on a daily basis with no glitches. But, she has the bandwidth. If you have slow speeds, chances are, you will lose the call, no matter what product you use.
The only problem I have heard about on Zoom is when there is not enough bandwidth. The lack of adequate bandwidth is also making connectivity a “must-have,” instead of a “hoped-for,” when it comes to intelligent amenities in both homes and apartment buildings. The three most important words in real estate are now location, location, connectivity.
In reading an article about the Zoom stock in Seeking Alpha, these comments below the article reflect the paradigm shift and observe what is taking place around the country:
“But even when the pandemic ends we, as a society, have learned a quicker, cheaper, and equally efficient ways to have a meeting and for most meetings, we will never go back. Why spend the money on travel or commercial real estate when a Zoom meeting can replace the vast majority of in-person meetings?”
“I work for a Fortune 500 company and we have been using Zoom since even before the pandemic. This company is not going anywhere. It’s pretty much a household name. The work at home shift has started and we will never be back to old normal.”
“I don’t see anyone giving up the ability to work from home, even on a limited basis, even after (if) the pandemic is over.”
“Just because a vaccine arrives doesn’t signal a return to cities and offices.”
These comments reflect a new permanency to what many thought would be a temporary shift. They also add credence to the reality that the paradigm shift is real.
Those involved in mass transit, Uber, corporate real estate, residential real estate, travel, hospitality, and airlines need to understand the impact this paradigm shift will have on their businesses and the future in a post-pandemic environment. Also, municipal governments hungry for sales tax revenues and other fees generated from all these entities must reconsider what “getting back to normal” will mean for them and for their operational budgets as well.
Will those who work from home be taxed in order to support antiquated infrastructure and bureaucratic agencies which are no longer viable? Or, will some drastic changes need to be made to discard or shrink obsolete agencies which have become monuments to bureaucracies rather than viable entities serving the public?
Time will tell.