Telework and the implications for Federal Real Estate

Key Takeaways

• Feds are more productive teleworking.
• Technology is making telework a more viable option.
• GSA has been reducing the amount of real estate it manages and rents for years.
• Fiscal pressure from exploding budgets may force agencies to adopt telework more extensively.

Back at the start of the COVID-19 pandemic something highly unusual happened to federal government employees. After years of meeting resistance to the possibility of working from home, most, if not all, were suddenly told that they were now required to work remotely. Federal facilities around the nation closed and suddenly the desire of many feds to telework became a reality. Now the question concerning telework is what comes next and what level of impact might a permanent extension of telework have on federal property managed by the General Services Administration? No one can answer these questions definitively given that we are still in the middle of the upheaval, but some data points and policy clues exist that may point us toward a partial answer.

The first of these is recent guidance released by the Office of Management and Budget introducing a 3 phase approach to reopening federal agencies. According to the guidance, Phase 1 will mirror the reopening status of the state in which federal offices and facilities are located. As states publish plans detailing criteria for reopening, federal facilities will align their own reopening with those plans and maximum telework requirements may be relaxed based on local circumstances. Phase 2 will see maximum telework requirements lifted entirely, but agencies are expected to address the needs of employees to ensure their safety, meaning those with medical conditions that make them high-risk for COVID-19 infection will still be allowed to telework. Others will come back to offices based on their situations, including their needs surrounding child care when schools are closed, etc. Phase 3 then assumes that working conditions return to normal. Even so, administrators are to “optimize operations” (left undefined) and be open to establishing “new work arrangements” with employees as they request them, including allowing the continuation of telework.

What agencies will do when Phase 3 arrives is unknown, but it is easy to imagine that expanded telework arrangements will be part of the solution. A recent survey of nearly 1,200 federal employees showed that not only are many happier working from home, they are more productive. Altogether, 52% of those surveyed said that they have been more productive teleworking while another 40% replied that their productivity was about the same. Achieving greater productivity is something that administrators cannot afford to ignore, so despite the fact that the survey also showed most feds were pessimistic about being allowed to telework in the future, one could imagine many agency leaders choosing to implement a more liberal telework policy once the pandemic has passed. Indeed, as Gary Washington, the CIO of Agriculture, stated recently, “We are preparing for a different kind of work environment.” Ryan Cote, the CIO of Transportation echoed the sentiment, noting, “There’s no question that every employee at the Department of Transportation is more productive than ever.”

Retaining an extensive telework policy may be shaped by another factor as well – the cost of maintaining federal facilities if they aren’t required thanks to teleworking capabilities. This is an especially important point to consider in the era of exploding federal deficits and multi-trillion stimulus packages. Already the GSA has been working for years to divest itself of real estate owned by the government, thereby reducing costs. This has had an impact on the plummeting amount of rentable square footage leased by the Federal Buildings Fund, as reported in GSA’s FY 2021 budget request.

How much lower could this and like statistics drop if 20%, 30%, or even 50% of feds are allowed to telework? Office space will no longer be needed or maintained given the smaller number of employees and, if telework is approved on a rotating basis, feds can share offices or hoteling spaces, further reducing the need for GSA to spend on office real estate.

The bottom line is that improvements in software capabilities, modernizing networks, higher employee productivity, existing policies, and the nation’s worsening fiscal situation are likely to make telework a more common option in the years to come, even after the COVID-19 pandemic. That development will in turn have knock on effects in multiple segments of the federal market, including a significant divestment of office space by the GSA.