Will there ever be a next generation of office-based companies?

Written by Technically Media CEO Chris Wink, Technical.ly’s Culture Builder newsletter features tips on growing powerful teams and dynamic workplaces. Below is the latest edition we published. Sign up here to get the next one this Friday.

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Claire Rutkowski called me from her home about the importance of the office.

She’s the chief information officer of Bentley Systems, a 4,500-person, family-run infrastructure engineering software company that went public in 2020, amid that frenzied market year.

Bentley is an interesting case study to be added to the volumes of pandemic-fueled debate about how the role of the office is changing. It’s a software company with employees around the world, making it a strong candidate for a fully distributed workforce. But it also has a long-established office culture, both because it was founded in 1984 and because its core business is tied quite directly to physical place. As the pandemic swept across the world, Bentley had 100 offices around the world, well beyond its headquarters in Exton, Pennsylvania, 45 minutes west of Philadelphia.

What will change about more than 30 years of office culture once we’re confronting fewer variants and higher vaccination rates?

“We will still have offices,” Rutkowski said. “But we won’t have as many.”

Even a company in the business of building doesn’t need as much real estate as they once thought. Rutkowski herself is a longtime remote work veteran. She spent most of her time working from home before the pandemic, and she hasn’t been in an office since. Overseeing tech and security teams at a global software company, she’s well aware that 40% of professionals report that they’d quit if forced to go back to an office five days a week.

Even still, Rutkowski is concerned about companies that drop their offices without a clear plan for investing in their people and culture.

Hers are familiar concerns with the loss of teammates working physically next to each other. Serendipity is natural in an office setting, and now many companies are furiously attempting to manufacture it. Less experienced employees and those earlier in their careers are at a particular disadvantage. Others wax poetically of the “third space” that the office offers, a way for us to separate work and home in a more deliberate way — especially those not yet blessed with decadent home offices.

It’s worth separating out these office concerns. Those that affect the company will be recreated by those best able to adapt. Invest in coaching programs, quarterly in-person summits and time for cross-departmental employees to connect.

Those that are most important to the employee may be filled in other ways. For one, coworking spaces and professional communities. Bet on local tech and professional development events booming in cities again.

People have to live somewhere. Increasingly, companies don’t.

A venture-backed SaaS startup CEO I spoke to recently has an office for 70 people. Rarely are more than a handful of employees in there today. The leadership team of a different unicorn company is all in the same city yet they’re intentionally meeting virtually to ensure they have the same experience as their distributed workforce.

Both started their team building process in a familiar way before the pandemic: Though remote work was welcome, they relied on their existing network which had a geographic bent. Offices make good strategic sense when there are enough people within a commute to justify the expense. So these and other demanding tech firms signed lease agreements to serve as flagships, recruiting tools and to engender collaboration among those employees who were nearby.

Just one in 10 companies expect to return to their pre-pandemic office arrangements. Nearly three quarters of companies do expect to operate a hybrid environment, with a mix of office and remote work. That leaves a surge of nearly 20% expecting to go fully remote, a remarkable growth in that number.

Companies that experienced most of their hiring in the last 18 months, though, have had an entirely different experience. They’ve hired regardless of geography, and seen existing employees move. More companies than ever have no clear geographic center of gravity. It’s one reason why just one in 10 companies expect to return to their pre-pandemic office arrangements.

Nearly three quarters of companies do expect to operate a hybrid environment, with a mix of office and remote work. That leaves a surge of nearly 20% expecting to go fully remote, a remarkable growth in that number.

Rutkowski said Bentley will consolidate many of their 100 global offices into fewer, more dynamic hub offices. That makes sense because their thousands of employees already are in geographic clusters. They’ll just have fewer of them.

What of those firms that are establishing their workforces now? In-person time still seems crucial for the earliest days of a company’s founding. Early team-building, too, benefits from existing networks, which can be geographic for many of us. It’s true that at a growth stage, companies may explore distributed options, but at some point, there are efficiencies in an office.

Start in-person, grow distributed but, Rutkowski said, those that grow big enough will eventually find the benefits of office investments. Those offices in the future may likely be influenced by coworking: with nice design, amenities, lots of meeting space and other elements that the average home office won’t.

“Offices will still work,” Rutkowski said, sitting beneath a nice framed painting in her home. “They’ll just work differently.”

P.S. Technical.ly’s 2021 community survey is now open. Spend five minutes telling us how we can serve you better, and we might send you a gift card or signed copy of Guy Raz’s book, “How I Built This,” as thanks.

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