In L’Oréal’s plush new West Coast headquarters in El Segundo, 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 people back to the office as pandemic concerns wane among employers. Lure them to work, the thinking goes, by making it a place they want to be.
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 demands that employees 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,” he 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.”
L’Oréal was one of the first companies back in the office as pandemic restrictions on gatherings eased in July 2020. In an acknowledgement that workers’ attitudes about the office have changed, however, the company allows employees to work remotely two days a week if they want to do so. Most do.
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 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 Sherman Oaks office.
Many office landlords saw leasing decline in the third quarter, though it’s hard to know how many tenant space cutbacks were related to adoption of remote work such as MedPoint’s and how many were the predictable result of 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, real estate brokerage CBRE said. 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.
The expansion of an old Hollywood studio reflects the surging demand for soundstages as streaming services such as Netflix and Apple TV+ churn out content.
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, though “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 may depend 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 coax people into working together in person.
L’Oréal subsidizes the $5-an-hour cost of the concierge as well of the price of food in its restaurants, which are operated by chef Wolfgang Puck’s company. A L’Oréal store sells personal care products from among its more than 35 brands at a discount.
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.”
People who have grown comfortable doing their jobs among the comforts of home or sitting someplace else they like such as a coffee shop or park don’t grow wistful thinking about cubicles, conference tables and stark break rooms. They don’t miss losing a chunk of their day commuting.
Enticements making their way into offices have descriptions that may be unfamiliar to many even though they were starting to emerge before the pandemic: “innovation hubs” where teams meet to brainstorm, “maker spaces” with tools to create products, “libraries” that are quiet tech-free zones, outdoor workspaces, focus rooms for heads-down work and cafés where people can also set up their laptops.
After more than two years of having remote work in the mix, those office features should now be standard, according to Gensler. Game rooms with foosball and ping-pong tables, bro-ish pleasures considered innovative during the dot-com bubble of the late 1990s, are dying out to make way for more socially evolved benefits, Brink said.
“This is a time where there is a lot of experimentation going on,” she said. “We are really trying to figure out what is going to be the new workplace experience.”
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.
“When you need to take that kind of break and really reset, you can go in there and do that.”
Views of the outdoors and fresh air are especially in demand, she said. “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.”
Option-laden offices such as L’Oréal’s are most likely to be found among big companies that have the money to provide them and place a high value on face-to-face collaboration.
A recent survey of tenants by the Building Owners and Managers Assn. trade group found that 86% of tenants nationwide said they believe office space is vital to operating a successful business, a rise of 8 percentage points since 2021. The sentiment was strongest among larger tenants in upscale buildings at the top of the rent scale.
Among the top reasons for needing an office, tenants said, was having a place to meet with clients and customers, and promoting the company brand. Offices were seen as essential for innovation, promoting culture and values, and creating a home base for a sense of connection and belonging.
“It’s very clear that the majority of employers would like to get employees back into the office,” Pion said.
Experts predicted that more offices would fill after Labor Day when vacation season ended. But that didn’t happen, he said, perhaps because of recession worries among employers. Expected post-vacation comebacks didn’t materialize last year either as the Omicron variant swelled.
A growing number of Los Angeles-area office buildings are being converted to residential use as demand for offices stalls.
“Decision-makers are wrestling with trying to get people back into the office and have a higher level of collaboration,” Pion said. “At the same time, they’re trying to be intelligent and cautious about the future given the conversation about interest rates and the economy.
“We’re just in this sort of no man’s land” that will continue through the end of the year.
Average office population in the country’s largest metro areas has been up and down with COVID-19 surges but remains stubbornly below pre-pandemic levels.
According to Kastle Systems, which provides key-card entry systems used by many companies and tracks patterns of workers’ card swipes, the average office population hit a low of 14.6% in mid-April 2020. In mid-October it was at nearly 48%, with Los Angeles slightly below average at 47%, the highest figure yet during the pandemic.
History suggests that people will always want to work together at least some of the time, Pion said.
“For thousands and thousands of years, human beings have clustered around city centers and a sense of community,” he said. “I don’t think that that’s going away.”
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Roger Vincent covers commercial real estate for the Business section of the Los Angeles Times.
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