W H AT T I M E I S I T W I T H YO U ?
ZOOM MEETING IN 5 MINUTES
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L E T ’ S M E E T AT T H E O F F I C E O N T H U R S DAY
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S U R E TO M . . . S E E YO U L AT E R
HELLO TEAM!
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I ’ M W O R K I N G F RO M H O M E TO DAY
Relationship Buildings® is our guide to navigating, interpreting and re-imagining the changing landscape of the workplace.
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Covid19 has fractured how we work globally, at scale. And the combination of our new priorities, fresh insights and lessons learned over the past sixteen months are likely to result in the workplace changing more dramatically than it has ever done in our careers to date.
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W E N E E D TO S TO P TA L K I N G ABOUT OFFICE BUILDINGS AND S TA RT T H I N K I N G A B O U T
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IS S UE 3
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Gerard Taylor IS S UE 1
1 We need to stop talking about office buildings and start thinking about Relationship Buildings ®
Nathan Hurley
0 ISS UE 5 07 What Relationship Buildings ® mean for the under-30s
2 Ten years collapsing to ten months
08 Why data-driven design is here to stay
3 Welcome to the hybrid workplace
09 The evolution of the sticky campus, and what we can learn from university spaces
IS S UE 2
4 Welcome to the hybrid home IS S UE 3
5 Why we’re beginning the biggest period of innovation in workplace thinking and design any of us will experience during our careers IS S UE 4
6 When will we make the same breakthroughs in how we relate to each other that we’ve made with technology?
Jim Taylour ISS UE 6
10 Healing Spaces where the office is no longer the health problem, but the wellness solution ISS UE 7
11 Home alone together: recognising new habits and habitats and the importance of getting it right
Luke Palmer ISS UE 8
Relationship Buildings ® and the circular 12 economy: a shared responsibility
pages 78 – 79
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Why we’re at the beginning of the biggest period of change in workplace thinking and design any of us will experience during our careers. ‘ Some workspaces in central employment districts may become housing, and some housing in residential areas may become work spaces.’
| Why we’re at the beginning of the biggest period of change in workplace thinking and design any of us will experience during our careers.
The global lockdown will inevitably have loosened the bonds so important to company culture. And it’s only really once we’re back within the embrace of the collaborative workplace that we’ll be able to rebuild communal trust and relationships, and inspire and support new ideas, products, services and achievements. The contemporary open-plan workplace has, at its best, been somewhere it’s a pleasure to spend time in, offering everything from great coffee to multiple work settings, and conducive to both collaboration and focused work. Its hard-won benefits will be highly valued after our return from forced exile, as we start to reappraise, redesign and refocus our new hybrid workspaces towards Relationship Buildings®. Within many organisations, the accelerated technical innovation of the past decade has led to the demise of the fixed personal workstation and the old, hierarchical office structure. New technologies, amplified by new generations, have freed us to work in more enjoyable and creative, collaborative and productive ways within newly flexible, open-plan workplaces. As we mentioned in Chapter 3, research from Gensler (among others) reports that, given a choice between a personal desk space and embracing hybrid working, workers will choose the flexibility to WFH. It’s also worth mentioning that Leesman, after polling 719,000 workers across 4,771 workplaces globally, found that only 60% of respondents felt their workplace allowed them to work productively. It may be, therefore, that hybrid working will not only benefit workers and organisations, it will also give us an opportunity for a reset, helping us overcome issues that have been preventing the workplace from performing at its optimum.
In January 2021, a New York Times article by Dror Poleg contained an observation that can help us think about our new workplaces in a different and useful way: ‘The office will become more of a consumer product and, just like every consumer product, will have to continually fight for its customers and meet their needs. Offices will need spaces for specific tasks like focused work, team brainstorming, client presentations and employee training. And they will need to be more focused on individuals, even if these people work for a large company.’ As we start to get to grips with the likely impact of WFH on our city centres, Poleg’s article, with its insightful title, ‘Some workspaces in central employment districts may become housing, and some housing in residential areas may become workspaces,’ offers useful insights. He suggests that it, ‘seems safe to say that total demand for offices will diminish to a moderate degree. The bigger changes will be in how total demand is reshuffled and what office providers will have to do to remain competitive. Most office activity will not move to homes or to the cloud: instead, it is likely to be redistributed within and between cities, with a variety of new employment areas popping up – saving many people the trouble of simultaneous commuting to a central business district.’
‘ Many real estate decisions can no longer be made in decades-long cycles because understanding an organisation’s office needs in five or seven years will become increasingly difficult.’
pages 80 – 81
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‘Buildings in many traditional employment districts will have to compete more fiercely, and a small but significant percentage of office space will most likely have to be repurposed into housing, e-commerce fulfilment centers, delivery-only kitchens, health care centres, meeting spaces, event spaces and other uses.’ Poleg raises a prospect that I’ve come across in multiple research and published articles: that the changes to the rhythm of our working week will slowly change the dynamics of our city centres so they come to resemble cities towards the end of the 19th century. At that time, ‘most American urbanites walked to work; as late as 1930, Manhattan’s residential population was larger than it is today, meaning the city was more mixed in terms of land use, not dominated by office towers. It’s not hard to imagine that many will once again prefer to work within walking or biking distance of home.’
In late April 2021, the City of London Corporation published a report focused on bringing vitality back into one of the world’s most important financial centres. The FT covered this under the headline, ‘City of London plans 1,500 new homes for post-pandemic recovery. Vacant office conversions and boost for cultural and creative industries among proposals.’ The article expanded, ‘The City of London is planning to convert offices left vacant after the pandemic into hundreds of new homes as part of a recovery strategy to be launched by the UK capital’s financial district. The City of London Corporation will on Tuesday publish proposals to boost its cultural and to its medieval streets. Low-cost, long-term leases in empty buildings could be offered to creative sector tenants, with other plans to explore new ways to use vacant space left behind from companies relocating staff out of London postpandemic and bring new life to the area. As part of the five-year strategy, the Corporation, which governs the UK’s traditional financial centre, said that it would consider traffic-free weekends in summer, as well as all-night “cultural celebrations” to encourage activity outside office hours. It added that the City, “must adapt to post-pandemic economic and social trends,” and set a target of adding at least 1,500 new residential units by 2030 through a mixture of developing new schemes and converting old buildings.’
What will be the impact of COVID-19 on your future workplace and real estate strategy?
The property developers still betting on London offices’ The FT May 2016
“ There will be a clear bifurcation: anything that is flexible, modern and has access to open air will be high in demand and rents will be resilient there, but in the secondary market there will be accelerated obsolescence.” Mark Allan CEO Landsec The former will command high rents from large corporations competing for talent — law firms and tech companies chief among them. The latter will empty out and have to be refitted or repurposed.
51%
We will need to implement a new workplace strategy
40%
We will require less space
29%
We will consider how people could work closer to home
11%
We will need more space to accommodate social distancing or staff wellbeing
08%
We will locate to cheaper sub-market space
05%
We will have a more consolidated portfolio
05%
We will have a more disposed portfolio Kinght Frank
pages 82 – 83
New York
Why we’re at the beginning of the biggest period of change in workplace thinking and design any of us will experience during our careers.
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Welcome to the new workplace
1 Relationship Buildings Flagship statement buildings in which predominant flexible and diverse community spaces are complemented by collaborative privacy rooms and personal working areas.
2 Traditional Office
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Spaces reliant on fixed desking and desktop computing, complemented by some collaborative/lounge spaces.
Home Working Flexible two/three days a week concentrated personal working.
4 Distributed Hub Next generation, more locally distributed workspaces that minimise commuting and offer opportunities for colleagues to work together in the same space.
| Why we’re at the beginning of the biggest period of change in workplace thinking and design any of us will experience during our careers.
As occupancy levels within the workplace start to rise again, those returning are bringing with them a renewed understanding of what the workplace is about, and enjoying afresh the value of meeting with colleagues face-to-face. While digital meetings have been a godsend in maintaining organisations in the short-term and will enable a new work/life balance in the longer term, the last 16 months have also shown us the advantage of human-to-human over digital communication. We now understand that communicating digitally makes it hard to read the nuances in our colleagues’ facial expressions or see the clues suggested by their body movements and gestures. Without the intuitive intelligence-gathering that goes on in the room, people become difficult to read, with meetings becoming trickier as a result. The protracted period we’ve spent having to communicate digitally has highlighted the benefits we get from meeting face-to- face; benefits we previously took for granted. And then there’s all the relationship and team building, collaboration and information-sharing that happens at the margins – all of which are fundamental components of mentorship and the face-to-face guidance vital to the progress of new generations within an organisation.
The ease with which we adapted to on-screen meetings means they’re inevitably set to play a much bigger role in our future work, but many of us have come to think that digital meetings are like fast food: convenient and ok for a quick fix, but not good for our health and wellbeing in the long run. Our enforced absence from our workplaces has helped us perceive the true value these environments add to what we’re each able to achieve at work. As we adapt to hybrid working, we have a chance to recalibrate the design of our workplaces to keep the very best of the assets we had, replace those found wanting, and reinvent where necessary. And do all this while respecting the need for adaptability and change, as this CEO suggests: ‘Our employees want certainty, and as a leader there is a huge amount of pressure to make definitive statements, but for now I think it’s important that we remain flexible in a situation that is changing rapidly.’ The fallout from the pandemic and the changes that are happening in its wake could potentially lead to the most innovative period in workplace thinking and design any of us will experience during our careers. It makes sense to take a considered approach to these changes, rather than rushing in and blowing this opportunity.
6 5 Catch-up Spaces Personal or small team meet/work in coffee shops, restaurants and hotel lobbies, lounges and business rooms situated in city centres and other locations offering convenient access.
Membership Clubs Co-working membership club spaces (by prior arrangement) offering privileged access to key work/meet facilities.
7 Off-site Get-together Spaces Bi-or tri-annual get-together workshop/conference/learning spaces.
pages 84 – 85
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Why flexibility should be valued during a period of experimentation In late 2020, discussing a Radware survey of 260 senior executives, Forbes reported that working remotely has significantly improved workers’ productivity. Contributing factors include not commuting, minimised workplace distractions and the freedom to work during the hours that are best for each individual. A report from Gensler also noted that, ‘across the globe, workers have experienced working from home, and many find their home environments provide better access to the outdoors and better environmental adjustability and comfort. Employers must now work harder to establish how their offices and workplace policies can better support health and wellbeing.’ An article in Wired in November 2020 headlined, ‘Covid-19 has swept away decades of office workers chained to a desk, and swung the pendulum to the other extreme where white collar employees live, eat and sleep where they work,’ highlighted recent research from KPMG. This found that, ‘50 per cent of financial services workers want to continue working flexibly after the pandemic, but only a quarter want to stay fully remote.’ It also found that, while business leaders are pleasantly surprised by the productivity of WFH, they remain concerned about collaboration, innovation and long-term culture building in home-based teams, and also – because people are tending to work longer hours from home than they ever did in the office – about mental wellbeing. PWC, meanwhile, notes that, ‘executives are not standing still. Over the next 12 months, 87% of surveyed executives expect to make changes to their real estate strategy, with many planning more than one change. Six in ten expect to consolidate office space into at least one premier business district location, and a similar number say they expect to open more locations.’ The global mix of organisations experimenting with flexible working and how hybrid will evolve are being emboldened by this improved productivity. However, the surveys we’ve accessed throughout Relationship Buildings® highlight a number of shortfalls with pre-January 2020 open-plan workplaces, which makes the rush to adopt hybrid working in its many different forms concerning. The fallout from the global pandemic has presented us with a one-off opportunity to recalibrate our working lives, but trialing and analysis are going to be vital if new mistakes are not to creep in. The rapid move to hybrid and WFH needs to be carefully thought through.
‘ Proximity helps develop trust, and the decline of spontaneous interactions and chance encounters will have a big impact on the fostering of trust within organisations, and in turn on innovation and collaboration.’ pages 86 – 87
‘ Remote workers have significantly improved their productivity since working remotely. Increased efficiency may be attributed to not commuting, minimised workplace distractions and more freedom to work during the hours that are best for each individual.’
JLL’s Human Performance report found that
64% of millennials miss the office, and 80% of high performers have missed their office greatly during lockdown.
| Why we’re at the beginning of the biggest period of change in workplace thinking and design any of us will experience during our careers.
‘Those who work at home full time spend nearly twice the amount of time working alone than those working full time at the office.’
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In 2019, Leesman surveyed 719,000 workers across 4,771 workplaces globally, asking how the workplace affected their productivity, pride and enjoyment. Almost 40% of those surveyed said their workplaces didn’t enable them to work productively.
‘ We found that “mostly open” workplaces were associated with higher performance and greater experience, but noise, privacy, and the ability to focus remain key determinants of workplace effectiveness.
Striking the right balance of open/private and individual/group spaces will be key in the future.’
| Why we’re at the beginning of the biggest period of change in workplace thinking and design any of us will experience during our careers.
Prototyping the dynamics of Relationship Buildings® I discussed earlier Dror Poleg’s piece in The New York Times, with its insightful assertion that, ‘the office will have to continually fight for its customers and meet their needs.’ Multiple sources confirm that almost 70% of senior management believe, ‘typical employees should be in the office at least three days a week to maintain a distinct company culture.’ And as we return to our workplaces after 16 months of absence, the expectation is that we’ll be returning to workplaces that have evolved to respond to hybrid working, or, at the very least, to ones where the process of thinking about and planning for this is well underway. In a report published in January 2021, PWC observed that, ‘Real estate portfolios, locations and workplace design are all in transition.’ Our findings suggest that many companies will be getting creative with the workspace over the next couple of years, with the aim of making visits to the office a relationship- and company culture-enhancing experience, but it’s also worth remembering that some employees also need or prefer to have a workplace where they can go to do focused work. The coming environmental changes are likely to include improvements to office decor and an increase in collaborative hubs – which, in a deliberate move away from cubicles and open floorplans, may even involve bringing back some private offices or quiet spaces. Gensler’s research also led them to conclude that, ‘the office should remain a mainstay of the typical workweek because it is still the best place for employees to connect, collaborate, and socialise. There is a clear relationship between the amount of time someone spends at the office with the amount of time they spend collaborating. In fact, those who work at home full time spend nearly twice the amount of time working alone than those working full time at the office. Four out of the top five reasons UK office workers go into the office are to work together in-person, to
socialise, to connect in an impromptu or informal manner and to partake in brainstorming sessions. The office is still a place to focus for many workers, but as the nature of work evolves to become more collaborative, the office is viewed as a place to connect in-person.’ As Janine Chamberlin, a senior director at LinkedIn, remarked, ‘With a more flexible future likely, the biggest challenge companies will have beyond safety concerns is how they can create inclusive workplaces and cultures that work for remote workers, hybrid workers, and office-only workers.’
In its report, ‘Creating the office of the future,’ PwC offers two key ground rules that its research suggests organisations are going to need to apply. Firstly: ‘Set out the purpose of your office by communicating what people can expect to accomplish there, as this is as important as when companies should plan for employees to return. Specify who needs to be in the office and what they can expect to accomplish while there. Go through a careful evaluation of what happens in office spaces. What is valuable enough to keep your people coming in? Will the current configuration satisfy shared expectations to use the office primarily as a meeting place?’ And, secondly, ‘Manage expanding choices with tools and training. The complexities of a hybrid workplace can be managed with scheduling tools. Employees will need the structure of a set schedule so they can better manage other responsibilities outside the office. And then there’s culture: Many executives wonder how their cultures will evolve and how they can sustain the strengths of their cultures when their workforce is split — or how they can work toward cultural change. Companies seeking to retain hard-won agility during the crisis should consider how they can continue to foster collaboration among employees and help enhance productivity in any working environment.’ While there are undoubtedly challenges, the sharing of ideas and experiences globally will offer invaluable and constructive insights that will help make hybrid working a success as we begin the process of prototyping Relationship Buildings®.
pages 88 – 89
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Corporate HQs in the longer term. While it’s too early to be definitive about the evolution of the HQ building, the wide range of research and articles we’ve accessed for this report suggests that many organisations are seriously considering reducing its footprint – or even dispensing with it altogether. One dramatic example is BA’s Waterside HQ (discussed in chapter one), and another is REI, which is abandoning its ambitious new HQ before even moving in. The Wall Street Journal reported that REI had been, ‘poised to open their new Seattle area headquarters this summer after creating a unique building that reflected the company’s outdoorsy image and could serve as a way to recruit new employees. The property features outdoor staircases and bridges, a courtyard of native plants, and skylights to let in sunshine and air. But the cooperative said on Wednesday it was trying to find a buyer for the property before ever moving in. Instead of a single headquarters, REI will open a number of smaller offices and allow employees to work remotely, the company said. REI’s about-face on a building that was two years in the making offers the latest example of how the coronavirus pandemic is changing daily work habits and upending the office sector.’ Jes Staley, Chief Executive of Barclays, perhaps summed up what’s to come when he said, ‘Putting 7000 people into a single building may be a thing of the past.’ Other banks seem to agree, with HSBC predicting a 40% reduction in its property footprint over the long-term, and Lloyds Banking Group projecting a 20% cut in its office needs by 2023. Standard Chartered, meanwhile, have disclosed that they, ‘are partnering with an office provider for “near-home” workspace for staff, which will allow them to walk to work in half an hour,’ something that, as we discussed earlier, harks back to the New York of the 1900s. JLL’s global survey revealed that flexible solutions are attracting greater interest, with 56% of organisations interviewed saying they’re considering more use of flexible office space as, ‘it offers unprecedented ability to plan for uncertainty,’ and 82% believing that, ‘flexibility is a desired attribute as they select buildings to lease in the future.’ The survey also highlights that organisations like PwC are adopting more flexible work policies that, ‘allow staff to work from home for around half of the week.’ The sweet spot for working from home is, the research suggests, two days a week: this is likely to mean that, ‘as more companies finalise their new look workplace strategy and assess what it means for their real estate, more HQs could be up for sale.’
‘If talent can be anywhere then employees and employers can cast their net far and wide.’
The HR department of a US me dia company created a similar tea m charter after the pandemic began, in ord er to align expectations and establish nor ms. One norm to help level the playing field might be that, if some members of a tea m are working remotely, team meetings should be conducted as if everyone we re working remotely—including colleagues in the office who connect from their des ks. That way, members working from hom e would not miss out on side conversat ions and the dynamics of the meeting in the conference room. And everyone would be visible at full size on the screen, instead of being thumbnail-size figures in a cav ernous conference room. “I understand not everyone has a home they can work from. For them, we need the office as a productive workspace. But I exp ect them to work as if they were at hom e when they come in,” the CIO of a global fin ancial services firm told us. Boston Consulting Group Hybrid Work Is the New Remote Wo rk SEPTEMBER 22, 2020
pages 90 – 91
Why we’re at the beginning of the biggest period of change in workplace thinking and design any of us will experience during our careers.
HQ
‘Companies are planning to reinvest the remote work dividend in new ways in order to create a special experience in the office.’
Hub
While 2020 was the most volatile year in modern history, we would be mistaken to think that the disruption is over. Rather, as we move into 2021 and beyond, the rate of disruption will potentially accelerate as the implications from 2020 play out across the next several years.
Home
HBR
Hybrid From now on...
Home
Satellite Office
Headquarters
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‘ Many of us have come to think of digital meetings as perhaps a bit like fast food: convenient and ok for a quick fix, but not good for our health and wellbeing in the long run.’
Although you can’t plan for impromptu conversations, you can make them more likely to happen through the careful mix of shared assets, furniture mix and design layouts.
pages 92 – 93
Why we’re at the beginning of the biggest period of change in workplace thinking and design any of us will experience during our careers.
The survey concluded, ‘more corporates are quickly coming to the conclusion that they don’t need a certain percentage of the space they currently own and occupy, they’re rethinking their needs for the medium to long-term and asking if they should continue to own real estate, including their HQs. While many companies are still taking a wait-and-see approach to decisions on their HQ and wider real estate portfolios, some companies are now going public on their strategy changes – and there’s a very wide range of opinion on exactly what that looks like. The FT, however, suggested that, ‘there are factors that will push groups back to cities. Younger workers at the earlier stages of their careers will continue to be drawn to cities because they offer higher pay, extensive professional networks, and deeper and thicker pools of potential friends and mates. Young, educated people between the ages of 25 and 34 have accounted for roughly half of the population growth in close-in urban neighbourhoods [within three miles of the city centre] since 2010, and their share is likely to grow. Because they are crammed into small apartments with multiple roommates, they want and need to develop more personal and professional ties, and they feel less threatened by the virus, office space — whether in a corporate centre or a company-underwritten coworking space — will remain a key amenity or perk to recruit them.’
A report from CBRE would seem to confirm this, predicting that, ‘urban hub facilities will be needed to house top corporate functions, as a mechanism to recruit and retain young talent, and to function as “brand statements,” much as a Fifth Avenue flagship store does for a retail chain. The spokes will house full-time office workers or part-time remote workers who live in the suburbs or second and third-tier cities. Our study thoroughly debunks the idea that major companies will abandon or substantially reduce their footprints in superstar cities like New York or San Francisco. Such dense markets house deep, diverse and sought-after skills, which continually attract employers. By creating thoughtful and engaging satellite offices proximate to concentrations of workers, these offices serve as magnets, attracting employees and promoting culture, collaboration and innovation.’ Not all these changes in thinking result from the fallout from Covid-19. Linklaters, the international law firm, said in August last year that following the 2019 adoption of more flexible start and finish times through their UK offices (part of a package of new working practices), employees would be able to work remotely 20-50 per cent of the time. Many UK and international law firms joined them in flexing away from the belief that, ‘the nature of our occupation, which requires close collaboration, handling sensitive documents, tight deadlines and confidential phone calls,’ means it can only happen within the workplace. According to the FT, City stalwart Mishcon de Reya’s lawyers were offered the opportunity to, ‘work three days a week from home and … take unlimited holidays,’ six years ago. If a confidential, security-sensitive sector such as the law is able to embrace away-from HQ working, the potential for other sectors to do the same is clearly even greater.
Attributes of the best workplaces Throughout this report we have accessed what we view as great research, insight and polling. Consistently amongst the best is Gensler’s annual workplace surveys and this graphic we believe resonates with multiple global findings and highlights what workers view as the key attributes, to achieve the best workplace. build social connections and community inspire creativity and innovation help share knowledge and best practices
promote team building and collaboration
support health and well-being
communicate shared mission, values, culture support experimentation with new ways of working
maximize individual productivity provide the latest technology and tools
foster comraderie and fun
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David Donovan, who heads the North America financial services practices at innovation consultancy Publicis Sapient, says the pandemic has driven a step change at banks that were not always enthusiastic about adopting technology. “We’ve been saying forever that if you don’t convert to digital, you’re going to be out of business in a couple of years,” he says. Some banks knew that this was important, but “just didn’t feel urgency”, he adds. “What Covid has done is created the urgency because it’s made it pretty much obvious that they have no choice.” The New York Times
“There is a reason why London is by some margin the most miserable place in the UK, and that’s because of commuting.” Many London companies, eager to cut office costs, are happy to let staff stay home long-term. Andy Haldane, Chief Economist The Bank of England
| Why we’re at the beginning of the biggest period of change in workplace thinking and design any of us will experience during our careers.
“ The end of the long daily commute, with its high financial and environmental costs, won’t be missed by many.” Nicholas Bloom
Mid-term regional hubs At the UK Conservative Party’s 1981 conference, the then Minister for Employment, Norman Tebbit, famously advised job seekers looking for work to, ‘get on your bike.’ Our enforced absence from the office has, however, evidenced one of the greatest benefits of tech: that it enables us to be productive when working wherever we are. And, as a result, most companies now recognise that, rather than forcing employees to travel to them, they need to go where employees choose to be. This change was coming even before the acceleration of hybrid working in the wake of Covid19. As Dror Poleg noted in his NYT article: ‘The defining characteristic of this new version of the creative class may not be where it lives, but its ability to live anywhere it wants. Put differently, people move to certain cities in search of better-paying jobs, but it’s now possible to earn high (if not the highest) salaries from almost anywhere. That has been true in certain smaller cities in recent years (Austin and Denver in the United States, for example, and Manchester and Leeds in Britain). To a lesser extent, it has also been true for people who choose not to live in cities at all.’ The transition from workers having to move to where the work is, to organisations allowing them to work close to where they want to live, is reflected in myriad reports. JLL’s global report from the summer of 2020 observed that, ‘There are opportunities to innovate around valuing and rewarding talent. Location-based pay bands will need to be reassessed, while in recruitment, remote working allows employers to cast a wider net than ever before. Support for home working will become an employee perk, with packages including anything from home broadband and office furniture to childcare or senior care support. This is also a two-way street: if talent can be anywhere then employees and employers can cast their net far and wide.’
Hybrid working is set to move through each of the scenarios discussed in this chapter. And, as JLL’s report notes, organisations globally are pushing towards more agility, something that’s showing up in the move towards shorter office building leases: ‘Real estate portfolios are in transition. Most executives [87%] expect to make changes to their real estate strategy over the next 12 months. These plans include consolidating office space in premier locations and/or opening more satellite locations. Over the next three years, while some executives expect to reduce office space, 56% expect to need more. These mixed findings show that some companies are planning to reinvest the remote work dividend in new ways in order to create a special experience in the office.’ JLL’s findings also show that, ‘The bigger changes will be in how total demand is reshuffled and what office providers will have to do to remain competitive. Most office activity will not move to homes or to the cloud. Instead, it is likely to be redistributed within and between cities, with a variety of new employment areas popping up and saving many people the trouble of simultaneous commuting to a central business district.’ This expresses the likely move towards regional hubs.
pages 94 – 95
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Short-term pop-up and co-working spaces ‘As a society we are assessing if it’s necessary to work in a fixed, permanent position daily. Even prior to the outbreak of COVID-19, 4 out of every 5 employees reported that given two similar job offers, they would turn down the one that didn’t offer flexible working.’ IWG Global Workspace Survey 2019 The concept of Hub and Spoke (a main office, plus satellite ones allowing workers to meet up closer to home) has been in circulation for a while. A Harvard Business Review article reported Peter Bacevice, Director of Research at global architecture and design firm HLW as saying that, ‘neighbourhood hubs where clusters of employees live would reduce commuting time and assimilate a cross-section of workers from various roles, giving them a chance to build community based on the common experience of where they live. This would be a great way to break traditional role-based silos.’ Another benefit might be to populate unused spaces such as vacant storefronts, ‘bringing new life and new uses to neighbourhoods and street life’ – something we touch on elsewhere in Relationship Buildings®. ‘IWG signs up biggest customer as bets on hybrid working grow. Staff of Japan’s NTT will be able to choose from more than 3,300 sites as companies rethink links with office.’ In an article under this headline in March 2021, the FT reported that, ‘IWG, the world’s largest flexible office company, has signed up its biggest customer to date in a record start to the year, signaling an appetite for more hybrid working after the coronavirus. IWG has secured a deal with Japanese telecommunications group Nippon Telegraph and Telephone to provide access to its global network of offices for NTT’s 300,000 employees.’
desirable: people want it.
viable: commercially the numbers add up.
feasible: the crisis has shown it can work at scale.
‘WeWork, meanwhile, is planning to roll out an “all access” membership which will allow companies to work from any of its offices rather than taking desks at a specific location.’ The article outlined a move globally that sees, ‘flexible office companies such as the UK-listed IWG and rival WeWork … pitching themselves as a convenient middle-ground between fixed offices and homeworking.’ Cushman & Wakefield’s report ‘Workplace Ecosystems of the Future’ underlines the new importance of having more locally positioned facilities. Under the headline, ‘Flexibility, Flexibility, Flexibility’, they report that, ‘Location has historically been considered the most important thing in real estate—and it remains important. However, since the workplace is going to need to iterate at the ever-increasing speed of business change, maximizing portfolio flexibility will be among the primary needs of commercial real estate executives coming out of the recession. The global economy has been rapidly evolving for decades. Now portfolio planners and strategists have to add changing preferences in where and how people work, supported by technology.’ According to the report, flexibility is key: ‘real estate decisions can no longer be made in decades-long cycles, because understanding an organization’s office needs in five or seven years will become increasingly difficult. The culture of real estate decisions must change to support the business goals of today and the unknown strategies of tomorrow.’ As I noted in the introduction, it sometimes takes time for a great idea to gain traction. This was, for instance, true of the co-working spaces being trialed in multiple Dutch regional railway stations, which I came across a decade ago. A great idea, allowing commuters to cycle to the railway station without needing to board the overcrowded train to Amsterdam or Rotterdam. In the introduction to this section, I underlined that neither hybrid nor WFH are new concepts. They were first aired with real seriousness over twenty-five years ago, so we shouldn’t be surprised by the speed of their adoption over the next couple of years.
% 72 of the global workforce would like to work remotely, mostly part of the time. Accenture Research
‘Maximizing portfolio flexibility will be among the primary needs of commercial real estate executives coming out of the recession.’
Why we’re at the beginning of the biggest period of change in workplace thinking and design any of us will experience during our careers.
‘ Fewer workers commuting to offices, fewer face-to-face meetings and conferences will mean the need for fewer offices, hotels and business travel. Where we choose to live (and work) will begin to shift the balance of city, suburban and country living.’
Even before the pandemic, there were signs of trouble with the office marke t in the handful of cities where the “creat ive class” had been flocking. In 2018, net mig ration to New York, Los Angeles and San Francisco was negative, while the U.S. econom y grew at a healthy 2.9 percent. Creativ e magnets like London and Paris were exp eriencing similar declines. The New York Times
t(hq) t(wfh)+ t(hub) + = -$11k 2 2 $11,000 is what a typical employer can save for every person that works remotely for 50% of their time.
At the same time, the pandemic is accelerating an outward migra tion of knowledge workers from New York and California to less-expensive loc ales. Raleigh, N.C., and Austin, Texas, the top real estate markets at the start of 2021, are among the boomtowns attrac ting more than their share of young workers. Several recent high-profile cor porate relocation announcements sug gest that some employers are inclined to follow this migration. PwC
Accenture Research pages 96 – 97