Attracting Talent and Tenants in the “Multiverse of Work”

By: Phil Mobley, Avison Young

Over the past decade, users of commercial space have increasingly viewed their locations and spaces through the lens of talent optimization: Attracting it, retaining it, and getting the most out of it while at “work.” The most forward-looking companies looked at their workplaces not just as places to gather, but as a vital support system for their people.

To help their tenants deliver these high-performance, experiencefocused workplaces, building owners and managers ramped up their focus on amenities, both physical and digital. This came at a cost, of course. But in the context of competition for talent—and, by extension, lease deals—the investment was a bargain.

Or so everyone in commercial real estate thought until the COVID-19 pandemic forced most knowledge workers to retreat to their homes, many of them for a year or more. Now, some companies—especially the big tech firms who have long been at the forefront of workplace design—are selling a new twist on the workplace as a recruiting tool: The flexibility to work remotely.

Remote work is not new. According to a 2020 survey by Global Workplace Analytics (GWA), about a third of knowledge workers worked remotely at least one day per week before the pandemic. Now, three quarters of them want to keep it up. And a Gartner study suggested that 60 percent would only consider a job that offered remote flexibility.

Has remote work rendered obsolete the kind of human-centered workplaces that cutting-edge employers have been building for the last few years? It now appears that the CRE industry will avoid the nightmare “death of the office” scenario. the pandemic, Avison Young uncovered some principles that will guide the next evolution of workplaces optimized for human performance. We call it “The Multiverse of Work.”

Why do we still need offices?

To the amazement of many, knowledge workers were quite productive at home during the pandemic. But maybe this should not have been so surprising. Academic research had already shown that, under the right circumstances, remote work could be a productivity accelerator. Ctrip, a Shanghai-based travel agency, conducted an experiment in 2013 that showed a 13% productivity gain among call center employees who started working remotely. When the company later opened the remote option to more employees, they saw an even bigger boost. They also reported higher job satisfaction and lower attrition.

But the full story is more complicated. Call center work is less complex and collaborative than most other knowledge work, not to mention easier to measure. Ctrip’s results may not be generalizable. Furthermore, employees who worked remotely were less likely to be promoted, and when given the choice, half of them went back to the office. Other research suggests that workers spending too much time (more than about 50 percent) remote start to lose connections with coworkers and supervisors, to the detriment of performance.

Pandemic-era surveys also showed nuanced results. In the GWA survey cited above, only about one in every six knowledge workers sought to be remote every day, with the vast majority wanting the ability to go to an office at least occasionally. And according to workplace research firm Leesman, workers want to split their time roughly evenly between home (or another convenient remote location) and the office.

One reason for this is that not everyone has had as uniformly positive an experience working remotely. GWA has shown that, while 70 percent of all workers feel successful working at home, less than half of Gen-Zers (those under 25 who are currently entry-level employees) do. Leesman’s research has revealed that these younger workers actually want more time in the office than their older counterparts. It stands to reason that a generation of workers who are more likely to live in smaller spaces with more people around them would therefore find it more difficult to create good workspaces at home.

Age is just one dimension. There are other challenges, including technology. For example, a 2020 Stanford study found that about a third of workers lack a reliable broadband connection capable of supporting video conferencing. For workers with technical challenges, unwieldy space configurations, and family or roommate distractions at home, access to an office is vital to success.

Serving the segment of workers who desperately need a dedicated workplace is not the only benefit of the office. For nearly all workers, corporate workplaces meet a broader spectrum of workplace needs far more fully than home offices can. The reasons for this are intuitive. Reliable broadband and a quiet place to focus are workplace analogs to the basic needs for food, clothing, and shelter at the bottom of Abraham Maslow’s famed hierarchy.

But higher-order needs for belongingness and recognition are just as important in the context of work as they are more generally. Without them, people cannot perform at their best.

Does workplace quality really matter?

In short, workers want the flexibility to work both remotely and at the office. And offices are optimal for some workers all the time and for all workers some of the time. Thus, the existence of a variety of workplaces is important. But what about the quality of those workplaces?

It turns out that quality is also crucial, both remote and at the office. According to Leesman, when workers have an inadequate home working setup—if, for example, they cannot close the door to a dedicated space, or they lack technical or ergonomic equipment—they will spend more time in the office than they might otherwise want. In that sense, a poor work environment at home pushes people to the office.

In another sense, a great office can also pull people in. In Leesman’s analysis of one organization’s different locations, they found that those working at the high-performing office (as measured by their proprietary Leesman Index) wanted to spend most of their workdays there. By contrast, those relegated to the low-performing office wanted to work remotely more often than not.

What will life in the Multiverse look like?

What will this look like for knowledge workers? There is certainly no single answer. Companies in different industries will have different answers, and those competing in the same industry will doubtless experiment with various workplace models to attract talented workers. But we can already place bets on some consistent themes that are likely to emerge. First is a renewed focus on wellness. In the post-pandemic world, this will have many aspects, from air quality to mental health to surface cleaning to ergonomics. As just one data point, consider Herman Miller’s finding that 85 percent of people are experiencing at least some physical discomfort while working remotely! Long after COVID protocols have receded, the importance of wellness in the workplace will remain.

A second theme is workplaces fit more for the purpose of collaborative work, rather than simply a place to warehouse people doing individual tasks. The key word is choice, which here applies not only to where and when to come to the office, but also how to work once there. The best offices will offer a variety of work modes within the space (through, for example, providing various “neighborhoods”).

Importantly, purpose-built offices must still include dedicated space for focus work! It may be true enough that not everyone will need an assigned desk. Yet even if intentional collaboration will be the main reason for coming to the office, people still need spaces to detach, if only for a short amount of time. Neglecting this need will sabotage any office.

The rise of various flexible office solutions will be a third hallmark of the Multiverse. Many tenants will try to reduce their footprints to optimize for a smaller number of every-day attendees at the office. But managing the ebbs and flows will be a huge challenge, and landlords that offer flexible suites or coworking areas onsite or nearby could be at an advantage.

The suburbs could be another opportunity for flex offerings to flourish. As noted above, some workers need an office more frequently than others, but they may still want to avoid a soul-crushing daily commute. Companies that support these workers with flexible near-home solutions will be well positioned to retain them.

Finally, expect an accelerated focus on PropTech. Making the most out of future workplaces will require technology to manage and measure access, utilization, and health. And the need for clear, seamless communication between building owners/operators and occupants has never been more apparent. These areas represent opportunities for tighter collaboration between landlords and their customers, possibly including sharing both data and the cost of implementation.

The future world of knowledge work will be far more expansive than most people imagined just a few years ago. It will align not only with worker preferences for flexibility, but also with better results through optimal human performance. The solutions will be complex. But companies and buildings that execute it well will reap the reward of attracting the best and brightest to their spaces.

About the Author

Phil Mobley has served the commercial real estate (CRE) industry as a researcher and consultant for over 15 years. He specializes in providing analyses that help the industry deliver high-value workplaces for tenants, a need that continues to evolve.

As Director of US Occupier Research at Avison Young, Phil shapes and leads the firm’s approach to understanding occupiers’ businesses and their dynamic need for commercial space. His work supports multiple service lines by identifying new ways to meet both landlord and occupier client needs.