Cushman & Wakefield- Sponsor of the Pulse Blog

A New Reason For The Office: Connection And Inspiration

Jul 6, 2023

From our Thought Leader Partner, Cushman & Wakefield

Despina Katsikakis • 6/5/2023

KEY FEATURES
  • Hybrid work has changed the reason for the office and will permanently reshape the office market.
  • The new workplace ecosystem balances office, remote, and third places.
  • The office is where people socialize, interact, brainstorm, learn, and celebrate together.
  • The office needs to shift from focusing on a collection of individual desks to becoming an inspiring community center for the company.
  • The office needs to adapt a hospitality approach, focus on experience and be the physical manifestation of company culture, brand & values.
  • Flight-to-quality will occur, rendering some properties obsolete forever, but others “good enough” to attract some tenants, albeit at a lower cost.

Technology has enabled the workforce to be more virtual and as most employees now have choices of where to work, there’s something different about the office these days. It’s not just the casual attire, the prevalence of videoconferencing or the hybrid work environment. Three years post-pandemic, there’s a new reason for the office—one that is focused just as much on inspiration and connection as it is on efficiency and productivity. Employees are seeing their work—and their workplaces—with a laser-focused intentionality. They long to be inspired by their work, and they want to connect with their colleagues in a meaningful way. For most, however, that inspiration and connection doesn’t come from a 40-hour work week working remotely, but from intentionally choosing to come to the office to make connections with people and within workplace environments that inspire collaboration, creativity, and innovation.

We’re in the People Business Now

So, what does this mean for the office? It means that the office market—and the entire workplace ecosystem—has been dramatically and permanently changed. But it also means that today, we’re not only in the building and real estate business; we’re also in the people business. If we want our employees to be inspired and feel connected, to optimize our workforce productivity and employee engagement our buildings and work environments must meet the demands of a modern era of tenant preferences or risk being obsolete and not transforming to meet new demands and challenges. They must be engaging, efficient, and sustainable, with amenities and provide compelling experiences that employees want now that will continue to meet the expectations and demands of tomorrow’s workforce. Recognizing this 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 in early 2022 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, long-term real estate strategy requires a clear action plan that aligns employee experience goals 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, promote culture, and drive company performance. 

Our research backs this up. Since 2017, Cushman & Wakefield has collected more than 10 million data points, in more than 130 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 percent 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 percent want to work in the office three or more days a week
  • 37 percent prefer hybrid 
  • 38 percent of people prefer remote

These numbers vary widely across geographies, with 53% of employees across the Americas leading the charge for remote work. 60% of workers in Europe, the Middle East and Africa (EMEA) want to be hybrid, coming in 1-4 days a week, and across Asia-Pacific (APAC), 60% of want to be in the office 3+ days a week.

Where does the C-suite land on this? With XSF data from approximately 1,000 leaders across industries globally over the last 2 years, we find a balanced desire across all three dimensions:

  • 36 percent want to be in the office three days a week or more
  • 32 percent want to work remotely 
  • 32 percent want to flex between the two, with 1–2 days per week in the office

This is a significant change from the 66% of executives that wanted to be in the office 3+ days a week in 2020.

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 percent embrace the new workplace system and want to continue working in a flexible way 
  • 90 percent 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 percent to 64 percent, and personal well-being dropped from 73 percent to 39 percent. 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 percent 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 percent of employees report positive experience and engagement with flexibility about where to work 
  • This drops to 48 percent when companies dictate office attendance 
  • 85 percent report positive experiences when given a choice about when to work
  • This drops to 45 percent 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. As office worker density continues to decline—from 190 to 165 square feet (sf) per employee over the next eight years—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 realize office frequency is a team decision, where business 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 40 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 percent drive the experience of people and provide meaningful value. And that varies by region, market, and down at the building level. 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. A focus on environments that support wellbeing is key, as we have seen a steady decline of people’s sense of positive well-being since before the pandemic—from 73 percent in 2019 to 39 percent 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 of the stakeholder’s priorities are co-dependent to the others, and investment or disinvestment in one priority can suppress success in another—but when addressed together with a balanced approach, this can be a catalyst for enabling 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, with the office as an enabler
  • Plan in an agile, iterative way with employees at the center
  • 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 and intentional way. Real estate leaders will need to integrate and ensure alignment of all key business, HR, and technology 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, choreograph, 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 External Link and is under the copyright ownership of Henry Stewart Publications.

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