Corporate Real Estate needs to develop new performance measures for office spaces. Looking only at density or cost per square meter is not enough to understand and determine today’s workplace needs.
In this joint webinar together with Cognitive Corp. we dived deeper into the topic of the future workplace and discussed topics such as:
- The workplace of tomorrow
- Workplace Leaders roles and how to enable future workplaces
- Success factors for Corporate Real Estate Managers
- Tools workplace leaders should familiarize themselves with
The webinar took place on the 9. December 2020, 5.00-6.00pm (CET) during which we answered your questions online. Watch the recorded video below!
Sabine Ehm – Thought Leader, Locatee
James Waddell – Executive Vice President, Cognitive Services
The management of the physical office space has become a business-critical topic for organisations around the world. While this may be of good news for you as a corporate real estate professional, there are still many hurdles and struggles to face:
- Do you feel enabled to contribute to your organisation proactively or strategically?
- Do you know the industry market and how to make use of the ongoing trends?
- Do you have the appropriate information or the tools to do your job successfully?
If you’ve answered “no” to one or several of the above, fret not: we translated those questions into a 3-dimensional model that reflects the challenges but also the opportunities of corporate real estate. The model reveals different approaches on how to master the challenges of corporate real estate in 2020. Armed with this knowledge, you will have all the makings to become a proactive leader and influential strategist in your company.
The 3 dimensions
Let’s have a brief look at the three dimensions and how they can be used to make your daily work more effective, sustainable and eventually more powerful.
Dimension 1: Corporate Goals
By keeping your objectives in line with those of your C-level executive team, you take active ownership in executing one common vision. Seeing their challenges as your own allows you to not only empathise, but also to get others onboard with your ideas and build up trust.
Are you aware of your corporate goals?
Dimension 2: Industry Trends
Knowing what lies beyond your company’s borders is crucial if you aim to position yourself as an expert. Stay afloat of actual trends and topics, and dare to engage in conversations with peers and competitors.
Are you on top of your industry trends?
Dimension 3: KPIs
Tapping into the power of data means more than collecting all the numbers, metrics, analytics and insights you can: it’s about having the right data in place. Thoughtfully determine which business results matter most first, and select and report on KPIs accordingly.
Do you have access to insightful workplace analytics data?
Do you want to read more about the 3 dimensions and how you can make use of them? Learn more!
Find your roadmap for a powerful long-term CRE strategy
Being aware of those three dimensions is helpful to understand single parts of the whole – by combining and aligning them, you will get a strong tool at hand to find your specific way for a reliable and actionable CRE plan tailored to your particular needs and circumstances. Thus, we created a roadmap covering all three pillars with different variables for each dimension, showing you different options you can choose from to establish your long-term corporate real estate strategy.
Do you want to dive deeper into the 3 dimensions or learn more about certain scenarios?
We compiled a strategic guide for corporate real estate professionals who recognise their potential and wish to improve their standing within their company and on the industry market. It aims to help understand different aspects to consider, measures to take, and provides specific proposals on how to master the challenges which can be expected on the path towards the future of work.
- The detailed 3-dimensional model explaining how company goals, industry trends and KPIs can influence your action plan and long term strategy
- 2 scenarios which will exemplify possible strategies on your way to becoming an influential strategist mastering the future of work
Do you want to learn more?
In times of COVID-19, successfully managing the office space and enabling employee mobility have become a business critical need. Benchmarking practices that monitor key metrics of different areas ease the required surveillance of office space – but not only in exceptional times.
The Institute of Facility Management (IFM) at ZHAW Zurich University of Applied Sciences and Locatee have joined forces to develop a benchmarking framework aimed at providing guidance on using space utilisation data for internal and external benchmarking. Therefore, they conducted a survey, asking CRE stakeholders about the value of different benchmarking areas and performance metrics.
Are you interested in the outcome of the survey?
In corporate real estate, benchmarking and workplace performance management have become a more and more important practice over the past few years as the pressure for efficiency and cost effectiveness has increased. But the results have shown that the current interest in benchmarking still exceeds the current benchmarking practice by far.
According to the results, the main interests lie especially in space utilisation and density. But not as one might expect, these areas are less of an interest for cost reduction purposes but serve as support when it comes to workplace decisions. “The tendency for performance management and benchmarking is to become a core component of workplace management and an important activity to accompany organisations in the strategic management and development of their workplaces.” (Benchmarking Survey, p. 5)
Multiple studies have shown the importance of employee experience, such as CBRE’s Workplace Survey Research Report about the influence of workplace experience on employee engagement. This trend turned out to have an incremental impact also on benchmarking interests: survey participants stated to expect that areas such as the quality of workspaces will gain remarkable attention and demand for more user-centric metrics at the same time.
For more information about user-centric use cases, consult the Use Case Guide about how to navigate the complex smart building landscape!
When it comes to the subject of taking up space these days, most of the attention is placed on the occupier, with the space being taken up often relegated to an afterthought. However, in the world of corporate real estate and workplace management, a small misaligned understanding of what “net area” means could potentially lead to catastrophic consequences and costs.
“Great things happen when the world agrees.” —International Organization for Standardization
What are standardisation organisations?
As globalisation connects people, businesses, and cities around the world, one of the challenges of international business is laying a common groundwork for understanding. Beside the International Organisation for Standardization, or ISO, there are several other organisations that publish guidelines on valuation standards. Some, like European Standards (EN) and The European Group of Valuers’ Associations (TEGOVA), publish standards adopted and approved for use across an economic region such as the European Union. Others, such as the Deutsches Institut für Normung (DIN) and the Asociación Española de Oficinas (AEO), operate with the specific aim of promoting and defining activity in country-specific markets like Germany and Spain.
Although their main aim is to eliminate barriers to business and trade, the different schools of standardisation which exist occasionally confound more than they enlighten. There probably is no better example of this in corporate real estate than the definition of “net area”: depending on which school of standardisation is employed, the same term can be taken to mean two very different concepts.
The difference between EN and BOMA standards
Since April 2012, the usage of the European Standard EN 15221-6 has been mandatory in the European Union. Across the pond, the Building Owners and Managers Association, BOMA for short, is a federation of US associations and global affiliates that have established a standard together with the American National Standards Institute (ANSI) to maintain floor measurement standards for property types such as office spaces. As the leading association for corporate real estate professionals in the US, BOMA is employed by many organisations based or headquartered in the US.
The European Standard: EN 15221-6
The European Standard uses the following terms to measure office space:
- Gross floor area: The total area of a building, calculated on a floor-by-floor basis, enclosed by the outer building’s outer walls.
- Net floor area: Commonly also referred to as “net area”, the net floor area is derived when the construction area, or the outer walls of a building, is deducted from the gross floor area. The space contained within the net floor area falls into one of four categories:
- Technical area: These are the technical rooms, air shafts, and server rooms of a building.
- Circulation area: In layman’s terms, these are the walkways on an office floor.
- Amenity area: Amenity areas includes toilets and kitchens used by the tenants or occupants.
- Primary Area: Finally, this is the main usable area which serves to fulfill the purpose for which the building is rented.
The American standard: ANSI/BOMA Z65.1
BOMA standards for office space employ the following definitions:
- Gross area: The total area of a building, calculated on a floor-by-floor basis, enclosed by the outer building’s outer walls. (This is more or less the same definition as outlined by the European Standard.)
- Rentable area: The rentable area is derived when all the building’s common areas such as elevator shafts and staircases are deducted from the gross area. This is the area a landlord typically rents out to a tenant, hence its name.
- Usable area: The usable area is derived when all the spaces that serve every tenant in the building such as lobbies and toilets are deducted from the rentable area. (Although occasionally, sharing the kitchen and toilet facilities with other tenants can make things slightly more complicated, as the rented space cannot be measured directly using the floorplan. In these scenarios, a common area factor is typically applied.)
- Circulation area: The ANSI/BOMA standards make a point to further categorise circulation areas into either primary or secondary circulation areas. Primary circulation would be the paths from the entrance door to the kitchen area, desks, elevators, and toilets. Secondary circulation would be the paths from desk to desk.
- Net area: Finally, the net area is derived when the primary and secondary circulation areas are deducted from the usable area.
EN vs BOMA space definitions
Herein lies where the main confusion comes from when it comes to talking about corporate real estate in an international context. While the European Standard definition of “net area” includes circulation area or walkways, by most American standards, “net area” does not. Thus, when two workplace managers look at the same building, how they define and measure space depends entirely on the standards they use.
EN 15221-6 vs ANSI/BOMA Z65.1
- EN (European Standard) defines net area as including circulation area, or walkways.
- BOMA does not count circulation area in net area. Instead, circulation and net area together form the usable area.
- The EN definition of net area is roughly comparable to BOMA’s definition of rentable area, as both exclude the outer walls or construction area of a building. However, there are still small differences between the two: BOMA also excludes vertical penetrations, or elevator shafts from the rentable area.
- The BOMA definition of net area is much closer to EN’s definition of primary area.
So should an organisation use EN 15221-6 or ANSI/BOMA Z65.1?
What adds to the confusion is that even within the same organisation, different offices may employ different measurement standards. A satellite office in Germany, for example, may calculate their floor spaces using EN or the national German standard DIN, whilst the organisation’s headquarters may use ANSI/BOMA. A lexical slip-up when talking about “net area” can mean a misunderstanding of hundreds of thousands of square feet—or metres! Imagine what that could mean in costs when misunderstanding the terms of a lease.
When it comes to talking about net area, circulation area, or any other spaces, there’s no standard which is better than the other. The most important thing to keep in mind is to always clarify terminology and measurement standards upfront.
Whether your organisation uses ANSI/BOMA or the European Standard, Locatee helps you measure your space occupancy. Take a look at how to measure and monitor your entire portfolio’s health with the Locatee Portfolio Insights:
Fragen? Kontaktieren Sie uns!
Locatee at the event
As a silver-level sponsor of the event, we participated in a panel debate for both North America and UK/EMEA.
This top-class and well-known panel of CRE professionals discussed together various topics surrounding the workplace and explored the return-to-office-strategies not only providing a safe and secure environment but also enhancing the workplace experience for an evolving workforce.
Panelists (both events):
- Philip Ross Futurologist & CEO, Cordless Group & UNWORK
- Sabine Ehm Customer Success and Thought-Leadership Manager, Locatee
- Peter Otto Chief Product Officer, Condeco
- Mathias Elmiger Director, Knowledge and Data Strategy, Johnson & Johnson
- Peter Baumann, Global Real Estate & Facilities (GRF) Global Head of Projects, SAP
- Dr. Susanne Hügel, Director Head of Digital Innovation & Business Acceleration Continental Europe, CBRE
The panelists talked about the tools needed by the heads of Corporate Real Estate to successfully transition to new models of working in the post-pandemic world. From where people are sitting, to air quality and cleaning regimes, to new technologies for the workplace which can deliver an array of data and transform the user experience.
The virtual panel discussions took place on 14. October (North America) and 27. October (UK/EMEA).
Key takeaways from our panel discussions
- Health & safety of the employees as well as deploying according to smart tools remains the focus for corporations. Workplace strategists and CRE managers however are starting to look beyond.
- After a head start into the digital workplace and tools that enable remote work with the ability to fail and learn, employees and companies understand advantages and disadvantages of home work settings.
- The future will hold more choice for employees in terms of flex-time, flex-location and flex-workspace. Mindful choices to ensure productivity are being encouraged, but more importantly well-being and collaboration.
- Corporate Real Estate will be enhanced to reflect a more human-centric approach incorporating workforce aspects such as talent attraction, and a sense of community and belonging.
Video North America participation
Prepare yourself for the future of CRE
In collaboration with smart building research and thought leader Memoori we put together a handbook for CRE professionals. This handbook provides you with tips and the guidance you need to tackle the disruptive and volatile world of Corporate Real Estate.
Here’s a glimpse of some of the chapters you can expect:
- Digital Transformation in Corporate Real Estate
- Changing Roles and responsibilities of the CREM
- The Importance of Metrics
- Mapping of Metrics against Software Tools
- The Role of Software in CRE Management
„The Workplace Leader’s Handbook of the Digital Tools of Tomorrow“
Join the free webinar
Locatee Portfolio Insights ist eine kosteneffiziente Lösung, die Ihre Mitarbeiter wieder an den Arbeitsplatz zurückbringt, indem sie wichtige Daten zur Bürobelegung anzeigt. Da keine Hardware oder Installation vor Ort erforderlich ist, kann Portfolio Insights sicher eingerichtet werden und ist zudem skalierbar.
Bringen Sie Ihre COVID-19-Situation unter Kontrolle:
- Überwachen Sie die Gesundheit Ihres gesamten Immobilien-Portfolios
- Passen Sie Belegungsziele an
- Halten Sie alle Stakeholder stets auf dem Laufenden mit exportierbaren Berichten
Das Beste an Locatee?
Es funktioniert bereits mit Ihrer bestehenden IT-Infrastruktur. Keine kostspielige Hardware wird benötigt.
Haben wir Ihr Interesse geweckt?
Mehr als je zuvor, müssen Führungskräfte im Corporate Real Estate verstehen, wie ihre Büroräume genutzt werden, um eine sichere und erfolgreiche Rückkehr ihrer Mitarbeiter ins Büro zu garantieren.
In einer zunehmend volatilen Arbeitswelt liefert Locatee Portfolio Insights die entscheidenden Daten und Analysen, um Unsicherheiten Ihres Unternehmens bezüglich Sicherheit, Compliance und Betrieb zu bewältigen.
Mit Locatee können Sie den Gesundheitszustand Ihres gesamten Immobilienportfolios überwachen, COVID-19-spezifische Belegungsziele festlegen und alle Stakeholders jederzeit und überall auf dem Laufenden halten.
Sehen Sie hier, wie Sie Portfolio Insights nutzen können um die Rückkehr Ihrer Mitarbeiter ins Büro zu planen.
Mit „Portfolio Insights“ behalten Sie den Überblick über den Gesundheitszustand Ihres gesamten Portfolios. Filtern und betrachten Sie die Bürobelegung und -nutzung nach Region, Land, Stadt oder Gebäude. Sie können sofort sehen, welche Gebäude überbelastet sind, oder wo Distanzierungsregeln nicht eingehalten werden.
Mit Portfolio Insights können Sie auch benutzerdefinierte Belegungsziele festlegen.
Sie können leicht benutzerdefinierte Belegungsziele für jedes Gebäude in Ihrem Portfolio erstellen und anpassen. Auf diese Weise können Sie sicherstellen, dass Ihre Back-to-Work-Strategie mit den Gegebenheiten Ihrer lokalen Büros in Einklang steht. Locatee informiert Sie, wenn ein Gebäude seinen sicherheitsangepassten Schwellenwert überschreitet, so dass Sie schnell reagieren können, und immer auf dem neuesten Stand bleiben.
Portfolio Insights verfügt über die Daten, die Ihnen dabei helfen, Belegungsmuster zu erkennen, Dichte-peaks zu untersuchen und die Gesundheit, Sicherheit und Compliance Ihres Unternehmens zu einer Priorität zu machen. Exportierbare Daten machen Briefings für Führungskräfte zu einem Kinderspiel, und ermöglichen Ihnen somit alle jederzeit und überall auf dem Laufdenden zu behalten.
Das Beste an Locatee ist, dass all dies bereits mit Ihrer bestehenden IT-Infrastruktur funktioniert. Die Einrichtung von Locatee Portfolio Insights ist sicher und einfach. Diese erfolgt per Fernzugriff für Ihr gesamtes Unternehmensimmobilien-Portfolio. Es sind keine Vor-Ort-Besuche oder Freigaben erforderlich, was Locatee zur skalierbarsten Lösung für die Messung der Arbeitsplatzbelegung macht. Weil Locatee die Daten über die LAN- und Wi-Fi-Netzwerke Ihrer Gebäude erfasst, kann auf den Kauf von zusätzlicher, teurer Hardware verzichtet werden. Da die Gewohnheiten und Verhaltensweisen am Arbeitsplatz immer flexibler und fluktuierender werden, zeigt Locatee langfristig Trends, Wachstum und Optimierungsmöglichkeiten auf und liefert Ihnen kontinuierliche Daten, damit Sie Ihre Arbeitsplatzstrategie an die sich ständig ändernde Arbeitswelt anpassen können.
Wenn Sie mehr über Locatee Portfolio Insights erfahren möchten, haben wir für Sie ein umfassendes Factsheet erstellt, das Sie direkt von dieser Seite herunterladen können. Wenn Sie mehr darüber erfahren möchten, wie Locatee Ihnen und Ihrer Organisation helfen kann, sprechen Sie noch heute mit einem Locatee-Experten über Portfolio Insights. Besten Dank für Ihre Aufmerksamkeit, und bleiben Sie sicher!
In the time that has elapsed since our analysis on corporate real estate responses around the world, COVID-19 infection rates have impacted countries with different levels of severity and resulted in quite a diverse range of coordinated responses around the globe, from China’s strict lockdown and travel bans to Sweden’s controversial laissez-faire approach.
Looking through the lens of corporate real estate, the global response is much more aligned. Office occupancy and utilisation have dived head first in every single country with no signs of a rebound to pre-coronavirus levels in sight. This has been compounded by the rising trend of permanent remote-working setups being introduced by companies large and small.
Using year-to-date office occupancy data, we calculated the average weekly peak utilisation to better understand the current state of corporate offices around the world and the direction they might be headed in the near future.
Weekly peak office utilisation in Asia
China and Singapore were the first countries to react to the developments of the novel coronavirus back in January and early February. While we can see that since locking down, office utilisation in Chinese cities has been slowly but steadily increasing over the course of the previous months, utilisation has remained conservative in Singapore. Offices in the city-state seemed to be on the path to a slow return until the week of March 13th, when the Ministry of Health advised employers to allow employees to telecommute, stagger their work hours, and commute at off-peak hours. On April 3rd, Prime Minister Lee Hsien Loong introduced a much stricter set of measures to curtail the rise of COVID-19 infections in Singapore as well as the risk of asymptomatic spread, effectively closing all non-essential workplaces until June. However, even after the end of the “circuit breaker” period, office occupancy remains stagnant at well below 10% peak capacity.
South Korea, which has been lauded in its handling of the outbreaks without resorting to drastic lockdown or quarantining measures, appears to be leading the return-to-work movement along with China. As active cases have remained low in the country since June, weekly peak office occupancy has surpassed 50% or half capacity.
As India has the world’s third highest number of infections, office occupancy has remained low. Following the government-mandated nationwide lockdown on March 25th, corporate offices have remained mostly empty.
Weekly peak office utilisation in Europe
In Europe, where the data points all reflect a precipitous drop at around the same time, there seems to be a strong inverse correlation between the severity of the spread and weekly peak office utilisation. Italy and the UK were the first countries in Europe to respond, and were also among the countries most hard-hit by the pandemic. As a result, office occupancy has remained low. As the UK currently has the world’s second-highest death rate per capita of major countries, knowledge workers in large UK cities such as London are not expecting a return to the office anytime soon.
Countries like Spain and France that also undertook drastic lockdown measures are continuing to operate cautiously. Both countries are beginning to lift their states of emergency albeit in different ways. As a result, we’re starting to see the beginnings of a very slow return to the office space.
Out of the countries whose data we gathered, Germany and Switzerland are the countries who are leading the return to work in Europe, with weekly peak office utilisation almost reaching 40% before the beginning of the summer holiday season.
Weekly peak office utilisation in Africa, Americas, and Australia
When looking at data from other parts of the world, we can clearly see that corporate offices in the Americas, namely the US, Brazil, and Mexico, are very much still in deep the trough of the pandemic. As some of the largest countries both land-wise and population-wise, it’s difficult to predict when employees will start to make their way into the office again as there are no indications of a change in occupancy patterns thus far.
In Australia, we’ve seen a swift resurgence in office occupancy in the beginning of June, when the country reported the lowest number of new cases since February, with no new cases in Sydney and Melbourne, Australia’s largest cities.
In general, as more and more companies such as Coca Cola, Google, and Twitter offer extended or even permanent home office and remote work options to their workforce, we may never see a full return to the peak office utilisation rates of pre-corona times: the new normal of work is one that will force companies large and small to pay closer attention to their real estate portfolio in an effort to understand their workforce’s new working habits.
* Locatee gathered anonymised workplace occupancy data from a sampling of workplaces across 24 cities in 15 countries. Thus, the information and interpretations presented in this article should not be taken as definitive representations of workplace occupancy patterns for entire countries.
For more information about Locatee’s workplace analytics solution, download the Locatee Product Overview.
Among the most recent organisations to introduce sweeping changes to the “new reality” of work is Fujitsu. Last week, Japanese giant Fujitsu became the latest company to announce a permanent working-from-home plan as well as intentions to shutter half of its office spaces by 2022. With companies across all industries like Twitter, Groupe PSA (the French automobile manufacturer behind Peugeot, Citroen, and Opel), and Fujitsu having made such bold statements, are we seeing the first ripples of a much larger movement—the decentralisation of the office?
Coronavirus may not have been the root cause of the decentralisation of the office, but it has certainly been the catalyst to accelerating the speed of which flexible working setups are being adopted. But the looming question remains: how much of this is permanent and how much of it can we expect to revert to business as usual as the swells of the pandemic subside?
Faced with these uncertainties surrounding the future of work and the office space, we sat down to poll the opinions of some leading minds in the workplace experience domain. Phil Kirschner has spent decades helping global organisations provide better office environments for their workforces, so when it comes to the future of the workspace, few experts are better equipped with the experience and intuition than Phil. Here are some of his predictions for the new reality of the office space.
Phil, given everything that’s happened thus far, do you think CREMs and workplace directors will be managing larger or smaller portfolios? And what is the financial impact, e.g. on rent?
From the occupant or the employer perspective, I believe that increased adoption of flexible and remote working will reduce the overall total area required for a corporate portfolio over time. Furthermore, we may be looking at a distribution of the total area of a portfolio through greater adoption of “third places” such as coworking providers. These trends were already happening even before COVID-19, but the pandemic has definitely accelerated the action to adopt these flexible and remote working practices.
When it comes to actual rent, future buildings will likely be able to charge more per square foot or square meter than they have in the past. New real estate projects are beginning to include a greater number of services in their offerings. The focus has been on shared amenities like onsite fitness centres, but will evolve to more advanced technologies to and even data feeds of building performance.
“We may be looking at a distribution of the total area of a portfolio through the greater adoption of ‘third places’ such as coworking providers.”
Moving past the topic of the space, how do you think the office of the future will differ from pre-COVID times?
We’ve seen during the pandemic and months of working from home that a lot of work can indeed be done remotely. However, we’ve also recognised some pain points, and collaboration is definitely one of them. I believe that the primary purpose of the future office will be for collaborative working, either amongst employees themselves, or between employees and their customers or other business partners.
The traditional desk setup that you envision when you think about banks and insurance companies will recede in favour of mixed-use, multi-purpose, and interactive settings conducive to a wide range of collaboration types. Imagine a space that you can use for a formal meeting in the morning, a dining area during lunchtime, and a scrappy innovation and brainstorming session during the afternoon.
I also think that more people are aware now of the power of tools like Zoom because they’ve had to depend on it. Therefore, the ability to loop in remote participants via audiovisual or even AR/VR will also be a prominent feature in future office spaces.
“The strength of companies relies heavily on how connected individual members are…interaction is required to build strong and authentic connections.”
Collaboration aside, it sounds like the office space will lose some significance in people’s lives. Is this how you see it?
Not quite. A quality workplace experience is required for companies if they want to attract top talent and keep people engaged in their work. My personal favourite definition of “experience” is the events which make up the shared consciousness of a community; the most memorable experiences are the ones shared with other people. The strength of individual communities—or companies in this case—relies heavily on how connected individual members (employees) are to each other, and physical proximity and interaction is required to build strong and authentic connections.
So we need physical spaces to activate these interpersonal connections. The office will still be a cornerstone of community building and a company’s culture. A virtual environment can complement but not truly replace it. I called this concept the Connectivity Based Workplace and more information can be found in an article I posted to LinkedIn recently, which includes visuals and basic talk track from a presentation of mine.
What about the role of the Corporate Real Estate Manager and its relevance within organisations?
The role of the Corporate Real Estate manager is far from becoming irrelevant. However, the responsibilities traditionally held by this role may see a new owner which today still hasn’t taken hold of most organisations yet. Over time, I expect positions such as “Chief of Work” or “Chief Workplace Experience Officer” to emerge that will become a better representation of what it will feel like to work for a company in the future.
Although we are nearing the midway mark of the year, the ramifications of the global response to COVID-19 are only just beginning to show their long tails. Social distancing and lockdown measures put in place by national and regional governments have forced businesses to pivot their models or face stagnation. Companies have adopted remote working policies wherever possible, and even previous naysayers of working from home have ceded to forces beyond their control.
In lieu of the traditional commute to the office each day, many employees—knowledge workers in particular—are slowly adjusting to alternative working conditions. However, is this trend here to stay? We asked a few workplace leaders about how much space tomorrow’s employees will need.
Less is more
Phil Kirschner – a workplace strategy leader whose career spans WeWork, JLL and Credit Suisse – believes that in a year from now, employees will take up much less corporate office space than pre-COVID-19 times, citing an increased adoption of flexible and remote working habits.
For Kirschner, it all boils down to workplace experience: while there’s no doubt that the physical place in which people conduct work will continue to bear significant meaning, it is the where that will begin raising more questions. Now that we’re beginning to get a better understanding of what we can achieve out of the office, more people are beginning to question the real reason for needing to return to the workplace at all.
Kirschner predicts the further distribution of the total area of corporate portfolios through a greater adoption of “third places” such as coworking and flexible office providers. Although it is a trend which was already in development pre-pandemic, COVID-19 has accelerated its course. The age-old expectation of presenteeism is gradually being eschewed in favour of simply a better workplace experience, with talent naturally gravitating toward places which provide them with the best environment to work in—and this doesn’t always necessarily mean the office—or at home.
Co-working spaces are just one of the „third spaces“ which will see greater adoption, according to Kirschner.
“One of the major benefits that technology brings is providing employees with complete agency on when and how they work. But at the end of the day, it’s not the technological connection we need; it’s human connection,” explains Kirschner. In his point of view, the experience in most corporate offices currently still leaves much to be desired. This, together with new distancing and remote working habits, will drive down the need for keeping the same amount of corporate square footage per employee.
Back to before?
Arguing the flipside of the future office vision is Nick Riesel, Managing Director of Free Office Finder, a UK-based agent for serviced offices. Although Riesel shares similar views with Kirschner in the sense that “third places” or other “work points” have a crucial role in the post-COVID-19 world of work, he argues that in the short-term, a higher amount of square footage must be allocated per employee, driving up the employee-per-meters-cubed ratio.
Employees appreciate the ability to collaborate, mingle with co-workers, and seek out mentorship which is only accessible in a common workplace environment. It’s more evident now than ever before that people miss and relish in the human connection that the office space brings. As employees begin trickling back into offices, the conversations management teams are having, according to Riesel, are not centred around “if we bring the full workforce back,” but “how we bring the full workforce back.”
Removing every other desk, implementing desk screens as a physical barrier, and introducing office shifts for teams are just a few of the ideas being tossed around. As real estate and facilities managers experiment with the aforementioned tactics, “some will inevitably find themselves lacking in space and may need to consider taking up additional real estate,” says Riesel.
Riesel also hypothesises that the world of work may see a shift away from the open-plan office, moving back towards more partitioned space: not only desk screens, but enclosed office rooms. “Arguably, larger spaces between employees with screens between them may decrease collaboration. However, this could in fact increase productivity by allowing less chatter and introduce more focus.”
Partitioned space: a staple of the future?
A path with many lanes
Perhaps the differences between Kirschner and Riesel’s visions are two facets of the same coin. What may surmise is that it is less about employees taking up space, but more about whether the space is officially incorporated into an organisation’s real estate portfolio.The major question both pose is: how will corporations embrace the concept of flexible working, that is—locational flexibility? And perhaps the follow-up question to that would be: what will be the purview of the corporate real estate managers post-COVID-19?
There are many lanes leading to the future of work. Just as we’ve seen different strategies in the response to COVID-19, there will be no single strategy to office space. Based on your company culture, setup, and working style, how much space do you think each employee will need in your office?
Last week, the Financial Times organised The Global Boardroom, three days of live online conversations with senior decision-makers around the world who are leading the discussions surrounding policy and business.
The topics at hand focused on the numerous ramifications that COVID-19 has dealt to the domains of business, finance, and policymaking. As economies everywhere are buckling down in survival mode, the world’s top minds are scrambling to ensure that markets and businesses remain resilient. Among the questions posed, many wondered how quickly societies could recover from such a disruptive event, and the price to be paid for a swift bounceback.
Face to face with flexibility
From one day to the next, corporations were forced to shift their paradigms from business as usual to unusual business. The global lockdown presented us with many obstacles, but one thing participants agreed on was that it will be much more difficult to ramp up business again than it had been to shut everything down. The general response to COVID-19 has been precisely that: reactive. However, bringing businesses back requires much more preemptive planning and strategic thinking, in no small part due to the unpredictability of future waves of coronavirus infections.
What can workers expect? Flexibility, a lot of it, and in every sense of the word. As we’re already beginning to see, companies may permit and even encourage staff to work remotely for the remainder of the year. Having recently found itself at the vanguard of the work-from-home movement, Twitter has confirmed that it won’t even reopen most of its offices and facilities until September.
Are you ready to work from home for the rest of 2020?
Hierarchies and processes will also be much more flexible: we may expect more job rotation models, where employees take on different tasks and roles depending on the demands of their business. Temporal flexibility is also certain, as companies are already considering varying the normal schedules of work to reduce office utilisation peaks and rush hour traffic.
As a result of the efforts taken to minimise the chances of a second wave of infection, most facilities will not be running at pre-COVID-19 capacity for some time. For companies, this means sunk costs, lost profits, and inefficient operations. Businesses not willing to compromise safety must strive to seek cost-cutting opportunities somewhere.
One of the places which leaders and executives are now turning their attention towards is their real estate assets. As many of them have been sitting empty for several months now, it has become easier to separate business-critical sites from areas which could be shut down—temporarily or permanently. This may be an early indicator of a general trend towards trimming down on assets and streamlining space. On the other hand, some, like former Google CEO Eric Schmidt, predicted just the opposite: an increased demand for office space due to the desire to keep social distancing practices.
“The future ain’t what it used to be”
One of the many hot topics not only debated heavily by leaders but the general workforce is whether or not it is safe to go to work. In a time when guidelines often clash head-to-head with practicality and necessity, there is no answer that seems to lead to consensus.
A one-size-fits-all approach sounds too good to be true, and it is. Back-to-work strategies will need to be tailored to regional differences, regulations, and infrastructure. The localisation of these strategies may force companies to revisit once well-oiled business models and develop singular location and work concepts which reflect each locale’s state of inequalities, vulnerabilities, employee profiles, modes of transportation, and finances.
Back-to-work strategies need to take a region’s available modes of transportation into account.
The duty of corporate real estate managers would be to provide the necessary guidance to support decision-making with as much information on property usage during these times as possible. Combine workplace utilisation measurements with business performance results over time, and one can begin painting a better picture of what can (or cannot) be achieved remotely.
The Great Transformer
Making the rounds recently is the bon mot that COVID-19 has led the digital transformation at enterprises more than any C-level executive. In many ways, it’s a simple truth: the pandemic has managed to push buttons and pull levers that not even executives at the highest echelons of corporations had access to. Working concepts which were debated or on the drawing board for years were practically packaged overnight into MVPs and launched. Knowledge workers have made a collective stride over to the side of remote working—a movement which took decades to initiate and days to complete.
Many agree that the people who find themselves working effectively from home will have good reason to retain their privilege, as many myths about the necessity of an office space for collaboration has been busted. For some knowledge workers, the private space to focus, the lack of constant distractions, and a more personalised physical environment is proving to be much more pleasant than being in the office. Others are also discovering that as teams are no longer geographically bound to one place, communication with other teams has opened up and it has become easier to foster cross-functional work practices due to forced digitisation. Will the need for business travel become lower?
Only time will tell for certain, but we may be looking at future offices which are less dense, but more experiential. The world of work post-COVID-19 bears many new expectations, and the concept of the office as a space where people gather to work will see reevaluation. This means some work for workplace planners: starting at square one when it comes to analysing mobility patterns, ergonomic preferences, new working habits won’t be easy. But having workplace analytics in place is a great first step in laying the foundation for the crucial business and real estate decisions of tomorrow.
To learn more about how Locatee’s workplace analytics can help you better monitor and assess your organisation’s real estate portfolio and workplace occupancy, see our product overview or get in touch with us.