An imploding commercial real estate market. Workers disgruntled over a return to the office. Vaccine hesitancy. Aversion to crowded places.
As the final days of the COVID-19 pandemic crest on the horizon, employers are left wondering how they should run their business, what risks they should be willing to take and what kind of pain could likely be felt.
All told, the business landscape coming out of the pandemic will have winners and losers.
Take the real estate market for example, such as malls and office spaces, which have seen foot traffic crater amid stay-at-home orders, work-from-home mandates and months of capacity restrictions.
“There’s an upside in the long run, but unfortunately [it’s] going to be, you know, ‘a tough road to hoe’,” said Robert Volosin, chief executive officer of the Supermarket Consulting Group.
During an April 30 panel discussed titled “2021 NJBIZ Town Hall – Ask The Experts,” Volosin was joined by PKF O’Connor Davies partner Michael Andriolla, Szaferman Lakind partner and Business Development Chair Scott Borsack, Insurance Office of America Managing Director Lloyd Humhrey and Insperity human resource specialist Lori Sweeney.
“Lower Manhattan, Manhattan rents are plummeting. Leasing activity is at an all-time low, even worse now than it was after the 2007 recession when Lehman was gone and all these offices opened up,” Volosin continued. “Similar to malls, they will end up getting reused, most likely as residential.”
“But there’s going to be a lull, it’s going to be a tough time,” he said. “You’re going to see people lose ownership, the equity gets wiped out.”
With businesses trying to return their workers to the office, many will simply have to experiment to find the right balance that can make employees and company the most productive.
While a full return to the office might not be necessary, a telecommuting-only model can have its own flaws.
“There’s a level of fatigue over working from home,” Humphrey said. He continued that “the hybrid system” yielded the “best outcome for productivity and creativity” in the workplace.
And, the return to the office has made enough workers disgruntled, Sweeney said–a problem in industries where face-to-face interactions and collaborations can find no substitute in Zoom meetings.
“People [are] saying ‘I want to work from home, it works so well … why are you making me do this when we’ve all proven that job from home’,” she continued. Sweeney too believed in some type of hybrid model but noted just how hard of a sell it can be to return to the office.
And the process of worker safety will continue to pose a challenge, be it regarding masks or the vaccine, Sweeney said.
“It’s always a dialogue,” she said. An employee not wanting to wear a mask may be able to wear a face shield instead.
Sweeney continued that a vaccine incentive could be a much better stand-in than the thorny issue of a vaccine requirement.
“Part of the American Rescue Plan Act covers paid sick time for going to get your vaccine,” she said. “If you want to say to employees, ‘hey we’ll give you the afternoon off, the day off if you’re going to get the vaccine and we’re going to give you the next day off’.”
Andriola noted that a particular headache for businesses will be in their accounts receivable departments – going after other businesses that owe them money.
“People are very hesitant to part with cash. A lot of people are trying to avoid… making payments as long as possible to give themselves that liquidity and the extra financial protection,” he said. Going after those companies, especially the many businesses that very likely went under during the pandemic, will be a problem for employers, he said.
Many of those businesses that have gone under or suffered massive financial blows during the pandemic have been the hospitality sectors, brick and mortar retail, and travel.
“It’s going to take years for those sectors to come back,” Borsack said.