Workplace special – the changing nature of the office
What does it take to woo employees back to the office? Nature views. Social spaces. A focus on employee wellbeing. Deep focus areas. Renewable energy.
All of this, and more, according to Google, which has incorporated all these elements into its new Bay View Campus (pictured), a state-of-the-art workspace designed by Google, and Googlers, in response to the future of work.
Sporting a people-centred design and with a focus on wellbeing and culture, the Silicon Valley campus arrived on the Bay Area horizon just as Google kicked off its hybrid work schedule in April, requiring most employees to show up at the US offices.
Google is one of the largest companies attempting a ‘hybrid’ model, and this innovative workspace is designed to lure workers back to the physical office, and to cater to the hybrid work model that most employers seem likely to embrace.
Rise of the hotel office – social amenities and conveniences
This shift to a new way of working is underway, according to CBRE’s 2022 Occupier Survey. Across Asia-Pacific, 66% of business occupiers say they are adopting flexible working as the new normal; across EMEA, 72% indicate they are moving towards a hybrid workplace model, and across the US, 62% plan to have return-to-the-office strategies underway by mid-2022.
But while the transition from remote to hybrid is happening, progress is slow. The UK reached a post-pandemic high of 30.6% occupancy in June, according to Remit Consulting, while US occupancy hit a pandemic-era high of 43% in April, reports Kastle Systems.
Employees aren’t rushing back, it seems. Caroline Pontifex, Director of Workplace Experience at KKS Savills explains that there are ‘Learners, Leavers, and Leaders’ and that it is the ‘Leavers’ – those employees whose lifestyles, attitudes and priorities changed during the pandemic – that organisations are finding it most difficult to re-engage back with the office.
One of the reasons people are reluctant to return, says Caroline, is that their “home office outperforms their work office” when it comes to comforts, conveniences, and lack of commute.
This provides an opportunity, says Christine Li, APAC Head of Research at Knight Frank, to “redefine the role of the office in enhancing our working lives, by offering better amenity provisions than what one might encounter working from home”.
And many businesses are responding. Caroline points to the rise of the “hotel office”, with more firms following in big-tech footsteps and delivering all the services one would expect from a quality hotel, from concierge services to cafes, fitness centres and therapy spaces, to dog creches and social spaces. “Many of the organisations we currently work with are doing upgrades of space around offering social amenities,” adds Caroline. “It’s about giving employees a reason to visit the office two to three times a week.”
Physical office strengthens collaboration, culture, cohesion
Socialising is one reason employees do want to return to the physical office, to build relationships, collaborate, and feel connected to the company culture – something many have missed over the last few years. “With hybrid working in place, interaction among workers dwindled and can be a challenge when it comes to keeping the culture of the company alive,” says Christine.
And the numbers back this up. More than half of employees who left their job in the past six months say they lacked a sense of belonging, a recent McKinsey survey found. It’s an ongoing concern for business leaders who fear hybrid/remote working can lead to loss of culture, connectivity, and cohesion, and ultimately, a loss of top talent.
For business leaders, employee mental health and physical wellbeing is now firmly on the corporate agenda, says Tim Armstrong, Global Head of Occupier Strategy and Solutions at Knight Frank, and “many have come to value the social importance of the office above and beyond providing a physical space for work. It has expanded beyond the traditional notion of being just a place for work.”
While Tim acknowledges that hybrid working is a global trend that is here to stay, he believes the office will remain important for companies to promote collaboration and communication of ideas between employees.
“Physical collaboration and social interactions are fundamental to the creation, curation, and sustenance of a corporate culture; it’s what distinguishes the function of the office from remote settings. That’s not to say that working from home cannot be collaborative – it can, but the ease of that collaborative effort is improved with physical proximity, and stunted by the unnatural form of video calls, which have also shown to further marginalise minorities.”
Christine concurs, adding that when communications are virtualised, task-oriented exchanges and brainstorming activities might be limited as people may find it hard to visualise, especially visual learners, and it can be more difficult to gauge colleagues’ responses during discussions.
Collaborating in a physical setting not only facilitates brainstorming, explains Christine, it also “allows people to be engaged in spontaneous exchanges and minor decisions” preventing problems such as the ostracisation of employees from bigger conversations and more important decisions.
The new office design will focus on collaboration
Christine predicts the design of the office in a hybrid future will likely provide a curated blend of environment, from meeting rooms to working pods as well as breakout spaces that promote collaboration and connect employees, with the requisite digital tools that enable hybrid work styles. “Whatever is envisioned of the hybrid office, it should remain human-centric and continually place occupants at the centre of this evolving concept,” she says.
Describing the future office as an “attractor and cultural hub”, Sebastian Mann, Executive Director & Head of Design at CBRE APAC, explains that as the adoption of hybrid working tends to lead to focused work or back-office functions being performed remotely, the reimagined office will ultimately become a location for discussion, interaction, and collaboration. And as such, office design will need to be “exciting, interactive, and engaging”.
He predicts the end of the open plan office and a switch from traditional space allocations towards unassigned and collaborative spaces for unscheduled catch-ups, and communal spaces for socialising. “Organisations are starting to appreciate the value of an office environment that brings people together – the office as a destination,” he says.
Take global accountancy firm BDO, which recently sank £8 million to repurpose its UK office spaces to better accommodate hybrid working, inclusive of more areas to work collaboratively, “as we know we need a working environment and culture that attracts and retains the brightest, most ambitious talent”, says Martin Gill, Head of BDO Scotland.
Similarly, following its commitment to a hybrid working model, Deloitte has begun to roll out new transformations to its UK offices, which will see the introduction of more collaborative spaces. According to Stephen Griggs, managing partner UK at Deloitte, “the flexibility of our hybrid working model has changed the purpose of our offices” and the “feedback from our people has been that they want to use our workspace for collaboration, connection and networking”.
No one size fits all – employees will be part of the redesign
There is no one-size-fits-all workplace model, however, as it will vary by sector, department, and even employee profile, explains Tim. “For example, financial firms that deal with confidential data would probably need more private offices, which can be reserved by the staff, while some types of business services companies can fully operate on hot desking as they do not require fixed seating or private offices.”
Furthermore, companies must recognise the needs and roles of their employees and plan office spaces based on their needs, says Tim. “For instance, client-facing roles or business-critical operations are still best undertaken from the office. If a company has such requirements, offices should be making considerations to cater to these.”
Tim recommends organisations look at the number of days employees are coming into the office, their reported levels of productivity, and their preferred facilities and amenities in the office. He points out that sensors can be used to track the real-time utilisation of space.
It is a process that is both individual and ongoing, as organisations experiment with what works for them. What is essential, say all experts, is that employees are involved, and that the space remains flexible to ensure adaptability to change.
And that’s exactly the approach Google has taken with Bay View – an approach that is both flexibly focused and employee-centric. The process began with a deep dive into Googlers, with the design growing from there and ultimately prioritising the experience of the people in the building over the exterior form.
“After talking to Googlers about what they need from a workplace, we found that they are happy, productive and creative when they come together in teams, but need spaces that are buffered from sound and movement to get deep-focus work done,” David Radcliffe, Google’s VP of real estate and workplace services, says.
The result – a collaboration of Google’s design team, Googlers, and two of the world’s most in-demand architectural studios (BIG and Heatherwick) – is a space that balances employees’ desire to come together as teams with an environment that enables deep-focus work.
And along with its many social spaces, including indoor courtyards designed to make staff feel like they’re outdoors, nature views from every desk, and 20 acres of open space, Google is confident in luring employees back for good.
Real estate strategies for 2022
As hybrid working kicks in, organisations are reconsidering their real estate strategies. Clare Bailey, Savills Commercial Research Director in the UK, says that some companies are being prescriptive in embracing hybrid working and downscaling and/or optimising their real estate, looking strategically at where they want to locate themselves to attract the best talent.
While downsizing in professional, banking and insurance sectors in the UK, mainly Central London, are taking place, she says, there is increased demand for space in the tech sector, and upsizing in regional areas.
It is the locations where the cost of the commute is quite sizeable, in time and money, that are losing out most, says Clare, with Central London especially impacted. While the smaller, regional offices – those that have always driven strong engagement in the workplace – have had most success in getting employees back to the physical workplace.
Clare highlights a rising trend, the ‘cluster effect’, where organisations are thinking strategically about where they want to be and locating themselves with like-minded companies in collaborative and community spaces. She points to Bruntwood SciTech, an agency creating a network of thriving innovation districts in the UK, whose Circle Square tech community in Manchester is proving ground-breaking. “A lot of companies have moved there as it offers a community, incubator space, plenty of green space, and flexible workspace, so firms can grow. Increasingly, companies, and developers, are focused not just on the interiors, but on the spaces between the places, the public realm – the green spaces, the cycle amenities, the train station nearby.”
She is also seeing a rise in companies taking less space so they can spend more on the E and S of ESG in the knowledge that they’re not going to get “occupiers or top talent if they don’t have sustainability in place.”
It’s a similar story across the Asia-Pacific region. “Although we have seen some news that companies are reducing square footage, for instance, Standard Chartered Bank,” says Christine Li, APAC Head of Research for Knight Frank, “there are by and large just a few cases in the region” As with the UK, in Asia-Pacific, the tech sector is the pillar for leasing demand, says Christine, with “tech backfilling spaces vacated by financial firms”.
The Knight Frank Asia-Pacific Prime Office Rental Index observed a 0.8% growth quarter-on-quarter in Q1 2022, sustaining the positive gain of Q4 2021, and indicating regionally that leasing activity is robust as momentum picks up from economies reopening.
But, while the return-to-office momentum has begun with the easing of the pandemic, the global economy faces multiple headwinds, warns Tim Armstrong, Global Head of Occupier Strategy and Solutions, Knight Frank. “The high inflationary environment will see pressure on corporate earnings, and as a result some corporate occupiers will focus on cost consolidation and a tighter scrutiny on how real estate is being utilised, and maximising the utility of their office space.”
Sebastian Mann, Regional Executive Director, Head of Design, CBRE Asia Pacific
Sebastian leads the design business across Asia-Pacific for CBRE, a global leader in commercial real estate services and investments.
Caroline Pontifex, Director of Workplace Experience at KKS Savills
Caroline leads the occupier and workplace strategy team, advising occupiers using workplace as a vehicle for change, and developers ensuring real estate solutions can respond to change.
Clare Bailey, Director, Commercial Research, Savills
Clare is a director in the Savills commercial research team and has written extensively on themes within the regional office markets. She has been commissioned by the British Council for Offices to explore the provision of affordable workspaces in the UK.
Christine Li, Head of Research, APAC, Knight Frank
Christine curates and co-ordinates regional forecasts and market outlook for clients across the office, industrial and residential sectors as well as specialist asset classes.
Tim Armstrong, Global Head of Occupier Strategy and Solutions, Knight Frank
Tim is responsible for growing Knight Frank's occupier and global portfolio solutions business, which delivers world-class corporate real estate outsourcing solutions to clients around the world.