“Who’s Minding the Store” is a phrase that became popular in the 1960s. It was also the name of a 1963 comedy film starring Jerry Lewis, Jill St. John, Agnes Moorehead, and Ray Walston. In general, it means that people want to know who is in charge when the usual workers aren’t there.
I recently attended a charity fundraising event in downtown Akron. People were happy to be out and about and to see other three-dimensional people after many of these events had been held on virtual platforms, or had been canceled altogether, in the three years since the outbreak of the COVID-19 coronavirus. I got a chance to talk with many local leaders that I had not seen in person in some time. This included people I know from various nonprofit charities, leadership organizations, and some of our local corporations.
In one of those conversations, an executive from the banking industry shared with me that prior to the pandemic, they had approximately 1200 people working in downtown Akron daily. Now, three years later, between permanent work-from-home employees, and hybrid employees, who are “supposed to be” in the office 2-3 days per week, they were averaging less than 200 employees in the office on any given day.
I asked him, “What kind of impact this was having on the company?”. He said that morale, cooperation, relationships, and innovation that come from in-person brainstorming have all dropped dramatically given the state of the workplace.
Companies across the country are seeing similar trends. Many office-based firms swiftly shifted to work-from-home status in the spring of 2020 because they had no other choice. According to Kastle Systems, which manages security key-card systems, the data that shows how many workers actually enter offices each day. Unsurprisingly, in the early days of the outbreak, the number of employees at the office went from nearly 100% to below 20%, as you can see in the chart below.
What may be more surprising to learn is that three years later, we have barely broken above 50% of the pre-pandemic office occupancy levels. There have been many headlines recently that many companies, including those in the banking industry, are trying to compel employees to come back to the office. In today’s environment of low unemployment and worker shortages, companies are finding that they have less leverage in implementing these policies.
We are paying close attention to what this may mean to commercial mortgages and lease renewals, especially as it pertains to square footage and/or lease rates. It is reasonable to believe that companies that have fewer employees in the office daily would need less of a geographic footprint in the future. These are trends we will need to continue to monitor going forward.
This is just one of the many previously stable data points that have evolved in the last few years. The CFPs of Impel Wealth Management will continue to monitor these trends on both a local anecdotal basis, as well as what is showing up in the national statistics. We know that today there are many fewer people “Minding the Store” than there were just a few years ago. We wanted to bring this to light for what this may mean for the economy and for your portfolios. As always, our goal is to keep you informed as we continue “Moving Life Forward”.
© 2023 Jesse Hurst
The views stated are not necessarily the opinion of Cetera and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.