How COVID-19 Reshaped the Office Furniture Industry Overnight

At the end of the day, the concept of a completely customizable workspace didn’t sit well with executives who didn’t value the individuality of their workers. The Action Office idea was adored by interior designers but sadly dismissed by just about everyone else.

Undeterred by the failure of his first concept, Propst went back to the lab and created the Action Office II. The new design took his acoustical panel concept to the next level. The panels became miniature walls of multiple heights that separated each space into its own office without completely isolating a worker off from their colleagues.

Lightweight and easier to assemble, the new cubicle designs made more sense to executives. (If you’ve ever had the dubious pleasure of working in one of these cube farms, you can undoubtedly recall the phenomenon of “gophering:” Peeping your head up over the 4-foot cubicle wall to shout over to other caged prisoners — erm, co-workers.)

But companies didn’t adopt Action Office II the way Propst intended, either. Which oddly didn’t stop copycat competitors. Instead of going for roomy desk spaces with different designs and walls of different heights, they opted for tiny, boxed-in desks instead.

The industry, vendors and customers both, basically ignored Propst’s vision of a flexible workspace and open visual sightlines. Using Propst’s brainchild, cubicles were used to cram even more workers into offices. The office he invented shrank and shrank until it became impersonal and crowded. The age of the cubicle farm began.

Years later Steve Jobs would adopt many of these concepts into his design of Apple Park headquarters (see below), but Propst sadly died long before his vision of the office of the future would take hold.

Eventually the industry had to give the cubicle a more euphemistic label; it is now known as a “wall system.” And some are still being sold and installed to this day, but for all intents and purposes the oft-derided cubicle farm has fallen out of favor, with the new “open plan” taking hold in an estimated 80 percent of US office spaces today.

Mr Gorbachev, tear down this cubicle wall!

OK, Reagan didn’t exactly that, but he might as well have. For the past three decades the open office concept has been touted as the be-all and end-all of workplace design to promote collaboration, increase productivity, and retain top talent.

First, you tear down the walls and dispense with the soulless cubicles. Then, you put everyone at long tables (a.k.a. “benching desks”), shoulder to shoulder, so that they can talk more easily. Ditch any remaining private offices, which only enforce the idea that some people are better than others, and seat your most senior employees in the mix.

Magically, your people will collaborate. Ideas will spark. Your staff will be more productive. Visitors will look at your office and think, This place has energy! Your company will create products unlike any the world has ever seen. It will be as famous and successful as Google and Facebook.

But a tome of research suggests that open offices have actually had the opposite of the intended effect. Instead of promoting more face-to-face interactions, a study by Harvard University found open offices promote 70 percent fewer, as employees opt instead for texting or email. Rather than increasing productivity, an Exeter University study found that productivity in open offices drops by 15 percent. A survey of 1,000 office workers by Bospar PR found 76 percent of workers hate open office plans because of factors such as noise and a lack of privacy.

Rather than boosting collaboration, they’ve actually been a huge failure in just about every measurable way. For as long as these floor plans have been in vogue, studies have debunked their purported benefits. Researchers have shown that people in open offices take nearly two-thirds more sick leave time and report greater job dissatisfaction, more stress, and less productivity than those with more privacy.

To help overcome these challenges with benching desks some companies have added $10,000 “phone booths” to their open space plans to provide workers with some quiet time for concentration, or just a place to make a quiet phone call. Many office workers are not big fans of these claustrophobic closets, feeling like they’re working in a fishbowl.

All of these shortfalls of the open office plan are well-established science at this point, which leaves companies with only a single reason to implement open plans: You can cram more people into a smaller space, thereby reducing the cost of office floor space — from 225 square feet per employee to 175.

But this can be a false economy because the cost of labor is higher than the cost of floor space. Therefore, even a 15 percent drop in productivity usually eats up any cost savings that might result.

That being said, there aren’t all that many alternatives. Cubicles provide a bit more privacy and a bit less noise, but they’re ugly and depressing. Workers prefer to work in private offices, but they can encourage stovepiping. And if they have to share their office with even one more colleague they might as well be sleeping in the same bed when it comes to sharing germs. The Norwegian study found they’d actually be better off in a cubicle or at a benching desk.

Touted as one of the most effective office space alternatives, the new Apple Park headquarters designed by Steve Jobs, consists of private offices surrounding a hub of common area that’s specifically designed for socializing. That design, however, involves at least twice as much floor space as traditional private office, and even still, workers relegated to open space workstations have already been revolting.

And now, it’s open germ warfare

In the age of the novel Coronavirus, we’ve all become painfully aware that an uncovered cough or sneeze creates a spray of up to 40,000 disease-ridden droplets that travel at up to 200 mph, to a distance of up to 26 feet, and stay suspended in the air for up to 10 minutes.

These droplets can make you ill if you breathe them in. Office walls, and to a lesser extent, cubicle walls, create barriers to these projectiles, lessening the chance that one sick worker will make other workers sick. If they don’t run into each other in the elevator, bathroom or cafeteria, that is.

The big furniture companies that have been selling “benching desks” for all these years are now promoting silly notions like adding an acrylic barrier down the middle of the desks, already gaining the pejorative moniker of “sneeze guard.” This is pure social distancing theater, intended to give workers the feeling that their employers are taking active measures to reduce the spread of disease in their offices.

Medical experts are concerned, however, that these kinds of measures may actually risk workers becoming more complacent and dropping their masks while at their desks, or taking other measures at protecting themselves from each other’s aerosolized emissions of the virus.

Some companies have proposed having the cleaning crews upgrade their skills and solutions arsenals from “basic cleaning” to “detailed cleaning AND disinfecting,” and to scrub the office space every night instead of just once a week. Even if this were practical and affordable (it’s not, at least for most companies), spraying 70 percent-alcohol-based cleaning chemicals on every workstation, every night, will likely destroy computer keyboards and damage the furniture.

With rare exception, most office desks are not made with healthcare-grade laminates. They are made with high pressure laminates that will not only fade in color when repeatedly sprayed with these alcohol-based solutions, but will also lose the glue from the their edge seams, leading to the peeling off of edge banding and laminates over time. So this notion of nightly deep-cleaning of all the desks in an office is really just more post-pandemic theater.

So what does the future hold for the commercial office furniture industry?

If you tune into these companies’ quarterly earnings reports you’ll hear aspirational notions like “sure, companies will not renew all their leases but this will leave them more money to spend on nice new cubicles with really high walls,” or “companies will lease even more space and spread their employees further apart to increase social distancing, and they’ll need new furniture systems to meet these requirements.”

The only ones beating their chests are those with substantial online sales of residential furniture, especially chair products (usually from acquisitions prior to COVID-19, such as Herman Miller’s fortuitous acquisition of Design Within Reach in 2014), or those with very strong Asian business, where things do indeed seem to be “rapidly getting back to normal” for traditional office furniture manufacturers as compared to the Americas and Europe.

They explain that conference rooms built for 15 will have chairs removed so that only five people could use them at a time, properly distanced.

We get the aspiration to come out of the pandemic even stronger than when they went in. We just don’t know how many employers are going to feel so flush with cash after the recession.

The consensus among industry followers is that for the titan commercial furniture manufacturers, along with rafts of commercial architects and interior designers, contract furniture dealers and installers, there will be a dearth of new business for at least the next two to three years as most employees continue to stay working from home until things sort themselves out. Contract furniture dealers we have interviewed for this article — the proverbial “tip of the spear” for office furniture manufacturers — have reported anywhere from a 25 percent to 75 percent drop in business as of Q4, 2020. A stark indication of just how bad things are for the commercial dealer channel right now is that Contract Magazine has shuttered after 60 years in business.

The commercial office furniture industry has long taken a defensive posture that viewed e-commerce as the enemy. With the one exception of $1.3B Knoll, which acquired the pioneering ergonomics ecommerce player Fully.com in 2019. On Knoll’s Q1’20 earnings call management was quick to point out what a brilliant move that was, as without Fully’s booming e-commerce revenue the company as a whole would have booked much uglier financial results. That said, as can be seen in the stock chart above, Fully’s booming sales volumes are still a drop in the bucket in the context of Knoll’s overall global business.

Alas, most of Knoll’s peers have taken a wait-and-see approach, only a few of them acquiring any of Fully’s peers or launching their own office furniture e-commerce operations. Now, they’re probably all wishing they had — and before the pandemic hit.

Judging from the sheer explosion of demand for standing desks since the lockdowns began, WFH is here to stay. Probably for decades. The problem for these contract furniture manufacturers is that their products were designed to be put together by professional installers, and they cost 2 – 3x more than what can be purchased online. The few products that they do offer for sale online are basically IKEA projects, and not something most employers are interested in saddling valued employees with the task of assembling on their own.

Manufacturers like iMovR have already figured out how to design desks that assemble in minutes with no tools (e.g. their Lander desk), and they manufacture them on-demand, to-order, perfectly matching the employee’s home office space and decor, and shipping out in only one week. Some are even manufactured with healthcare-grade 3D laminate that can withstand any cleaning and disinfecting solvents like the ones hospitals use to sanitize rooms.

Before the pandemic, the contract furniture manufacturers already ceded 60 percent of the market to e-commerce and retail. The numbers have yet to be tallied for post-pandemic times but we wouldn’t be surprised if there’s already been a tectonic movement to more like 80 percent/20 percent, as the home office becomes the main office for the majority of workers in Corporate America.