MRI Real Estate Software - Sponsor of the Pulse Blog

Reason for the Office: Adaptable Environments for Connection and Inspiration

Feb 22, 2023

From our Thought Leader Partner, Cushman & Wakefield

Cushman and Wakefield Logo with Red building symbol and grey text

By: Despina Katsikakis and Bryan Berthold

What Happened?

Since March 2020, the world has experienced some of the most significant changes in how and where people work. The pandemic created a rise in remote work, a volatile job market and the momentum behind the “Great Resignation”—all while companies struggled to hold onto critical talent and define return-to-office strategies. Nearly three years later, we have a new workplace ecosystem, where people work in offices and remotely. We’re redefining the reason for the office—and for the first time, workplace transformation and employee experience have become top priorities for senior leadership worldwide. So, what happens now?

Now, We’re in the People Business

Today, we’re not only in the building and real estate business; we’re also in the people business. We have an imperative to optimize workforce productivity and engagement through buildings and work environments. It requires a change in mindset and a deep understanding of human psychology—and when the risks and costs associated with getting the workplace wrong are so high, it is exactly what businesses need now from CRE.

The pandemic taught us to be flexible, to tackle projects in a non-linear way, and provided us the opportunity to become more in tune with people when it comes to workplace strategy and decisions. When we canvassed our clients about their return-to-office strategy, they were divided: half were ready to return, and the other half wanted to continue working remotely—but none had based decisions on data or evidence that would help them understand current and future impacts on their workforce.

What we have learned is that an effective return-to-office and long-term real estate strategy requires a clear action plan that aligns employee experience data to an organization’s operational investment. It replaces guesswork with data and predictive analytics and provides the opportunity to create people-centric experiences that attract talent, inspire and retain employees and drive company performance.

Our research backs this up. Since the beginning of the pandemic, Cushman & Wakefield has collected more than 10 million data points, in more than 140 companies and across 100 countries, through Experience Per Square Foot™ (XSF), our industry-leading experience and engagement diagnostic tool, developed by a team of data scientists, quantitative and qualitative researchers, HR professionals, behavioral psychologists and workplace experts. We have more than 185,000 participants in our employee experience database—employees who are maintaining productivity but are pandemic-weary. In addition to struggling with their well-being and connection to their company culture, they are also less inspired at work.

The En Masse Shift of Behaviors

We asked our clients’ employees, “Where were you working before the pandemic, and where do you want to work in the future?” In 2019, the office prevailed, with 75 per cent going into the office and the rest split between hybrid and remote. Fast-forward through the pandemic and to 2022, and those numbers further shifted:

  • 25 per cent want to work in the office three or more days a week
  • 37 per cent prefer hybrid
  • 38 per cent of people prefer remote

These numbers vary widely across geographies, with employees across the Americas leading the charge for remote work. Two-thirds of workers in Europe, the Middle East and Africa (EMEA) want to be hybrid, and across Asia-Pacific (APAC), employees are more balanced across the three dimensions.

Where does the C-suite land on this? With XSF data from approximately 1,000 leaders across industries globally, here’s what we found:

  • 20 per cent want to be in the office three days a week or more
  • 17 per cent want to work remotely
  • 26 per cent want to flex between the two, with 1–2 days per week in the office
  • 20 per cent want in-office frequency of 1–3 times per month

Productivity was maintained but at a cost to the worker

XSF also told us about the pandemic’s impacts on people. Though we remained as productive as pre-pandemic, we also learned:

  • 78 per cent embrace the new workplace system and want to continue working in a flexible way
  • 90 per cent of remote workers feel productive and trusted to carry out their work

There are clear reasons why people want to continue working from home; however, over the past three years, workplace bonds and connections decreased from 74 per cent to 64 per cent, and personal well-being dropped from 73 per cent to 39 per cent. In addition, learning and development stalled, as mentoring is all but non-existent. Employees are languishing in connection—both to their company culture and to their colleagues.

The people have redefined the purpose of the office

The single driving force for a return to the office—in whatever form it may be — is connection. The learning that comes from a multigenerational workplace has disappeared and as a result, only 56 per cent of us are feeling connected when we work. It’s clear that we’re missing the meaningful conversations that bond people together. This lack of connection translates into an overwhelming sense for employees that no one cares about them. With only 54 per cent of people feeling connected to their company culture, it’s becoming increasingly clear that organizations are not well equipped at fostering a culture and keeping people inspired and engaged in a virtual world.

We’ve also learned that mandating where people work, whether by demanding that they work in the office or that they work from home, backfires. Our data told us very clearly that the best companies with the most productive and engaged employees offer the autonomy and choice of where and when to work—whether staying home to do concentrative work or coming to the office to brainstorm or learn from colleagues. Our data indicates:

  • 74 per cent of employees report positive experience and engagement with flexibility about where to work
  • This drops to 48 per cent when companies dictate office attendance
  • 85 per cent report positive experiences when given choice about when to work
  • This drops to 45 per cent when attendance is mandated

We also found that people do not do the same type of work in the office as they do at home. Employees told us that staying home allowed them to focus, save on time and costs of commuting and juggle home and life requirements. Going into the office gave them the opportunity to collaborate, innovate and socialize—and a sense of true human connection.

A renewed purpose affects office design and services

With most employees wanting an office as a place to connect, we forecast a shift in office space design and services, where work environments will reverse the traditional two-thirds desking space and one-third collaborative space to one-third desking and two-thirds collaborative space. We also predict a workplace that will resemble a conference center, where people intentionally go to interact, brainstorm, learn and celebrate together. This means a shift to our workplace services as well, as employees will become more like guests, where they may not have an assigned seat and where hospitality and concierge services might be provided.

These companies also understand that one size does not fit all, and that different segments of the workforce are likely to have vastly different responses to the current work experience. The best companies have teams come together to develop their own schedules and office-frequency game plans that work best for everyone.

People Need Inspiring Work Environments

Inspiration in the work environment—including company policies, culture and workplace—is the top driving workplace attribute for employee engagement and workplace experience outcomes. Employers must focus on the employee experience by uncovering what inspires people to want to come into the office—and then invest in those features.

Our research and statistical analysis have shown us that out of 36 workplace attributes, which fall into six categories—workplace design, technology, amenities and environmental, social and governance (ESG), services, location and brand—only about 20–25 per cent drive the experience of people and provide meaningful value. Through an evidence-based, data-driven methodology, driven by the voice of the employee, companies can focus on what matters and identify the workplace experience attributes in which to invest. Our research has shown that there are more than 80 amenities in which companies can invest, all of which fall into one of four categories:

  • Well-being (e.g., fitness, healthy foods, nature trails)
  • Work-life balance (e.g., meals to go, store, ATM)
  • Social (e.g., concerts, clubs, cooking classes)
  • Standard company perks (e.g., free coffee or free parking)

Through voice-of-employee diagnostics, XSF has helped uncover the amenities that matter. We’re replacing guesswork and subjectivity with voice-of-employee data and predictive analytics, reducing costs, while focusing on the amenities that will make a difference in drawing a talented workforce into the office. This is key, as we have seen a steady decline of people’s sense of positive well-being since before the pandemic—from 73 per cent in 2019 to 39 per cent in 2022.

Redefining Employee Experiences

Today, we can think about experience as a combination of three unique and specific drivers that make up the employee experience—efficiency, effectiveness and engagement—all of which are both driven by distinct priorities and correlate directly to an organization’s top stakeholders: the chief financial, operations and executive officers as well as leadership within HR and technology. The biggest and most significant challenge organizations face is determining how to align the priorities and budgets of every stakeholder to provide those experiences for a successful workplace ecosystem. Each vertical is co-dependent, and investment or disinvestment in one priority can suppress success in another—but when addressed with a balanced approach, it can support a thriving culture and business.

Embracing a multidisciplinary and iterative approach ensures alignment and allows for active engagement among all stakeholders in the process, as well as the ability to deliver enterprise value alongside employee expectations. To ensure alignment, we can learn from the iterative principles that agile product development applies to the planning, delivery and testing of new workplaces:

  • Cross-functional engagement with everyone at the table
  • Ground your initiatives in culture
  • Plan in an agile, iterative way
  • Weave the physical and the digital
  • Test, measure and iterate through a data- driven approach:

The Rise of Change Management

It is important to note that the biggest challenge for all organizations will be understanding and adapting how we will work and aligning the space to new behaviors. Accordingly, we will see a critical focus on change management. Realigning the workplace experience from a single location to an ecosystem of places will be a significant change journey that will need to include the virtual dimension. Change programs will need to be dynamic, and they will be required to ensure successful outcomes more than ever before; the future workplace will be all about inspiring and engaging people.

From Return to Office to a Reason for the Office

Now more than ever, CRE is at the top of companies’ leadership agenda. Office space is still in demand and there is clear value in bringing people together, but in a more flexible way. Real estate leaders will need to integrate and ensure alignment of all key business, HR, technology and CRE stakeholders to develop and implement a consistent and comprehensive workplace strategy and experience—both for the immediate return-to-office needs as well as for the sustainable future. Real estate leaders have an exciting opportunity to use an evidence-based, data-driven methodology to measure and monitor employees’ workplace experience and to align operational investment on what drives a productive, engaged—and inspired—workforce.

This article was first published in the Corporate Real Estate Journal and is under the copyright ownership of Henry Stewart Publications.

Connection CoreNet Global Corporate Real Estate Environments Inspiration Workplace
CoreNet Global