From our Thought Leader Contributor, EY.

Guest Post by David Asker, Senior Manager, Ernst & Young LLP

The workplace is in the midst of transformation. Employees believe they have proven they can be just as productive working remotely as they are in the office. Nearly 80% of employers in the EY Work Reimagined 2022 Employer Survey agreed, responding that the pandemic has caused their organization to rethink how productivity is measured. The next step is determining how the physical workplace fits into the equation. The office isn’t going away, but it will look and feel different. Analytics can play an important role in helping companies identify the right real estate strategy for their business.

Those companies that have already shifted to a hybrid work environment will have an obvious advantage over businesses that relied on a traditional operating model. But a committed approach to analytics can help organizations dig deeper and understand traits and characteristics of their companies’ functions that they didn’t even know existed. There is considerable value in creating an environment where people can see one another in person and feel a sense of community. The survey also found that the top two things that drive employees to come to the office are collaboration with colleagues (27% of respondents) and the ability to stay socially connected (26%). When everyone is in the office five days a week, there are continuous opportunities for informal, impromptu meetings that become valuable opportunities to share information. How can that same valuable dialogue be replicated in a hybrid setting?

Analytics can help companies create a workspace that supports the objectives of the business. Some companies thrive on in-person interaction and in a hybrid environment, can find great value in meetings where employees come to the office and spend the day updating their colleagues and direct reports on their work. There is an energy at these meetings as team members value the opportunity to see each other and reconnect. Employees leave this day feeling recharged and excited about what lies ahead. The physical space has provided tremendous value to the business.

Another company could be completely different: same strategy, same space, but no energy. Employees feel like their productivity is diminished by having to make trips into the office and away from whatever setup they have created at home. Most of their daily interactions are with other people who aren’t even in their office. They can’t get away soon enough. The office feels like a relic to a time that simply doesn’t exist anymore.

Real estate is often forgotten as a component of business strategy. But in these transformative times, it’s a critical element to the future of every business. Leaders need to create a workspace that meets the needs of their people and delivers value for the business. Companies that can utilize analytics to understand what works and what doesn’t in their organization to create that desirable environment will be poised to respond as the post-pandemic economy continues to evolve.

Data and the three Cs

In today’s world, analytics drives decision-making in countless settings. But the context in which this data is viewed is critical to its reliability. What happens too often for many companies is that they get caught in a situation where the data points they need are dispersed across different sources and systems. One metric doesn’t necessarily align with another, and it becomes difficult to draw reliable conclusions. An outside firm that specializes in data analytics can help companies centralize data and create dashboards that enable leaders to understand at a glance how their business functions.

Data should have these three key traits:

1. Is the data consistent? – Is the data coming from a reliable, reputable source? Is it being delivered the same way each time? Data that is delivered in a methodical way through the same source and based on the same collection method should have a high degree of reliability. For example, a company wants to look at utilization rates; data collected every week by the same method is more reliable than data collected at different times of the week through different methods.
2. Is the data complete? – Data is complete when each field on a form is filled out properly. Addresses are in the address field; zip codes are in the zip code field. There are tools available that can help an organization review its records to verify that they are done the right way.
3. Is the data correct? – Is this data an accurate representation of whatever is being measured?

Independent firms can bring a fresh perspective to help companies make sense of their metrics and coordinate technology, operations and other aspects of their real estate strategies. Businesses should be cautious in using firms that offer analytics support but do so with the hope of convincing the client to buy something. These are real estate advisors that provide advice to get transactions done. The problem is it may not be the right transaction for that particular business.

Businesses that are assessing their real estate strategies and looking to create a space that fits their new operating model need support understanding how their business functions. We have found that a company needs to measure 40 to 50 different data elements to get an accurate read. These metrics should help to paint a picture of how space is used, whether that space is valued and how it could be adjusted to better meet the needs of the workforce. But every organization has its own internal biases that influence how data is viewed and could affect how decisions are made. An external firm that brings a fresh perspective, and a commitment to help a business solve a problem rather than spend money, can be of great value.

The ideal scenario when thinking about real estate is creating a system that collects real-time coordinated information, allowing for data-driven decisions that are fueled by twice the experience at half the cost.

Build a strategic vision

One of the keys to an effective vendor relationship is collaboration. Clients that ask a lot of questions and take an interest in how the strategy is being developed will have a better sense of what’s happening and how it fits into their culture and organizational vision. They’ll learn that theirs isn’t the only organization experiencing the same challenges in building out their real estate strategies. Patience and flexibility will also be needed. The workplace is continuing to evolve, and there no doubt will continue to be changes as knowledge is gained and lessons are learned about the best way to get work done.

It’s also important to think about the financial aspects of a real estate strategy in context. The goal is to create a better work environment: a place where employees want to spend time. Companies continue to learn more about how to drive performance and strengthen culture by assessing employee perceptions of their health, wellbeing and performance while at work.¹ Ernst & Young LLP hosted a webcast last year that explored the future work environment and what organizations can do to help people feel healthy and safe within their work environments, wherever those might be located.² If there is an up-front cost required to create a work environment that ultimately leads to greater productivity and helps to attract and retain talent to an organization, that expense may prove to be a great investment.

The challenge for employers is to consider what’s best for their organization, gather analytics to inform their strategy and create a workplace that empowers their business to reach its full potential. Companies that can keep financials in mind as they consider the big picture, and can use data to guide their journeys, will have a better chance at creating long-term value. Those companies that can build a strong partnership with analytics experts who can support their work will be in an even better position.

References

1. “Launch of WELL Performance Rating Signals Future of Smart, Healthy Buildings,” International WELL Building Institute press release, April 11, 2022, https://resources.wellcertified.com/press-releases/iwbi-launch-well-performance-rating-at-well-summit/, accessed June 2022.
2. “Navigating real estate’s road ahead, EY website, https://www.ey.com/en_us/webcasts/2021/05/ey-webcast-navigating-real-estate-s-road-ahead.

The views expressed by the author are not necessarily those of Ernst & Young LLP or other members of the global EY organization.