Return to office remains hard sell

Even with perks, fewer workers show up than bosses’d like

Cafe California eating space at L'Oreal (cq) recently opended its second American headquarters located at 888 North Douglas on Tuesday, Oct. 4, 2022, in El Segundo, California. The famous cosmetics company recently opened a dramatic new office in a former aircraft manufacturing plant in El Segundo. (Gary Coronado/Los Angeles Times/TNS)
Cafe California eating space at L'Oreal (cq) recently opended its second American headquarters located at 888 North Douglas on Tuesday, Oct. 4, 2022, in El Segundo, California. The famous cosmetics company recently opened a dramatic new office in a former aircraft manufacturing plant in El Segundo. (Gary Coronado/Los Angeles Times/TNS)

In L'Oréal's plush new West Coast headquarters in El Segundo, Calif., workers are pampered by a concierge who will fill their cars with gas, pick up their laundry, retrieve their dogs from day care or do any other task employees want.

Personal and professional chores are fulfilled for $5 an hour, freeing employees to concentrate on their jobs in a former aircraft factory turned office building that now sports such comforts as a fitness center, restaurant, juice cafe and a cabana-like bar that serves coffee drinks and, depending on the occasion, alcohol.

People work where they wish on the campus, even outdoors, where a park-like setting is served by company Wi-Fi and a vegetable garden grows fare employees can take home. Dogs are welcome inside and out.

L'Oreal's sweet setup reflects a carrot-and-stick approach being used to get employees back to the office as covid-19 pandemic concerns wane among companies. Lure them to work, the thinking goes, by making it a place they want to be.

But it's not always an easy sell. In a recent survey by real estate brokerage CBRE, only 25% of executive leaders said they believe their workers would voluntarily come into the office more often than they do today.

In contrast, more than half of bosses said they want their employees in the office more.

Cosmetic company L'Oréal Group requires employees to work in the office at least three times a week, on days of their choosing. Their presence is a necessary part of operating the century-old company based in Paris, said David Greenberg, chief executive of L'Oréal USA.

"We're in an industry that's very much people-driven," Greenberg said. Together there is "necessary engagement, creativity, sharing and learning from each other."

Also essential is a sense of belonging that's best fostered face to face, he said.

"We put a high degree of importance on our culture. We believe it's why 110 years later, we're still leaders in the industry. And culture comes from people. It's part of the recipe," Greenberg said.

L'Oréal was one of the first companies back in the office as pandemic restrictions eased. In an acknowledgment that workers' attitudes about the office have changed, however, the company allows employees to work remotely two days a week.

As remote work settles into normalcy for many companies, office landlords face uncertainty about how much space their tenants are going to want to rent in the years ahead.

Some businesses may shed substantial office space, as Los Angeles healthcare company MedPoint Management did last year to take advantage of having fewer people in the office every day.

MedPoint cut its office space in half by moving to new quarters, while keeping its staff of about 800 workers intact. Half of them work mostly at home and the rest do some shifts at home and some in the new office.

Many office landlords saw leasing decline in the third quarter, although it's hard to know how many tenant-space cutbacks were related to the adoption of remote work, such as MedPoint's, and how many resulted from mounting fears of an economic slowdown.

Los Angeles County landlords saw more space vacated than rented in the third quarter, a turnabout from three previous quarters of net gains, according to real estate brokerage CBRE. The amount of unleased space rose to 18.7% of the market, uncomfortably higher than the 10% benchmark considered a healthy balance of power between landlords and tenants, according to the broker.

The still-evolving model of post-pandemic office work has played havoc with old patterns of office leasing that seesawed with the economy and the growth or decline of specific industries, such as technology, entertainment and law.

"It's hard at the moment to get a clear sense of what is going on in the market," CBRE real estate broker Jeff Pion said, although "without a doubt" allowing employees to work remotely at least some of the time is growing common.

Whether that allows executives to shrink their office footprint likely depends on how they structure their remote work policies and how much competition they have when it comes to hiring and retaining desirable employees.

Differences among companies' offices may become more stark in years ahead as some go bare-bones because their employees are often elsewhere and others, such as L'Oréal, add amenities to lure people into working together in person.

Employers who care about currying favor with employees may need to improve their workplace vibe, said Elizabeth Brink, a workplace expert at architecture firm Gensler. "We are really talking about treating the office as a destination, not an obligation."

Among the new concepts are mental health rooms, private spaces with a view to the outside where stressed employees can go to decompress. They might include soft furniture, lush plants and aromatherapy.

Views of the outdoors and fresh air are especially in demand, Brink said, and "employees are asking for that."

Private rooms for lactation or breastfeeding to meet state requirements for nursing mothers are now fairly standard, and prayer or meditation rooms are growing more common.

Other enclosed spaces are being created for people to take meetings on Zoom or make private phone calls. Having places to retreat may be especially beneficial to people returning to the office after being isolated during the pandemic.

"It can be a great experience to come back in, talking and reconnecting with people, but it can be a lot emotionally for people," Brink said. "It can create stress."

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