Thu 7 April 2016 – Property week.
By the year 2020, 50% of the global workforce will be millennials – what challenges will the office real estate sector face in creating space for this new breed of employee?
This generation brings a new set of aspirations and attitudes, as well as an ‘always connected’ approach to both social and work habits. However, this is just one factor affecting the rapidly evolving office real estate sector.
A recent Wedlake Bell event, Tomorrow’s City, Today’s Challenge, brought together panellists from the Work Tech Academy, the RICS, Gensler and GlaxoSmithKline to discuss the key issues facing this rapidly changing industry.
As the notion of the office as a rigid place of work declines and the impact of changing worker demands and technology accelerates, so work spaces are becoming more flexible and integrated into communities. Some companies are altering their facilities to enable employees the opportunity to work off-site, while others are relocating staff sections – internally or externally – to optimise output. We have now seen the success of co-working spaces, and while not every occupier will take space in a white-collar factory-type environment, traditional internal silos are coming down – and may soon disappear entirely. Internal hot-desking, for example, is prevalent in many organisations, and there is increasing attention paid to the use of space, with ‘third spaces’ utilised for certain activities and workstation use tracked.
Dark Side of Data
This evolution is heavily influenced and driven by technological innovation. ‘Smart buildings’ are on the horizon and advances in building information modelling are facilitating sustainable and future-proofed offices. However, the real driver of change now is big data. With tools such as entry swipe cards in use, buildings are already data processers and effective monitoring is allowing for the optimisation of space and enabling remote working to become more viable.
However, while the use of systems to assess employee engagement with space can drive effective design, there remain fundamental concerns over privacy. Some companies have run into difficulties when monitoring the use of specific desks and the growing prevalence of wearable technology, in combination with the large amount of work done on connected mobile devices, brings the ‘dark side’ of data into sharp focus.
The core theme of these developments is the confluence of employee work and social life, health and wellbeing. The vast majority of corporate occupiers’ costs go on employee salaries and benefits, not rent. Furthermore, it is becoming evident that wellbeing is vital in sustaining productivity.
The role the workplace-built environment has to play in maintaining this cannot be underestimated and an agile and innovative approach to workplace design and management is crucial.
Millennials’ needs and aspirations are driving this; as the Victorian notion of the eight-hour day declines, work is becoming a fluid notion that transcends the workplace. Some organisations are learning lessons from elsewhere in the world, particularly in emerging markets where young professionals are on the rise.
This can be taken one step further, with companies competing to hire tech-savvy millennials who are vital to today’s connected business. Many of these potential staff simply do not want to work in a traditional office and, in many cases, they are actually more productive and innovative when surrounded by like-minded professionals. The development of hubs such as Tech City is a testament to this, and we may see corporate occupiers shrink central office space and look for service line hubs (notably for web developers, marketing or fintech) to attract new professionals.
At the same time, we are facing an ageing populace who are working much later in life and have their own requirements, which might involve, for instance, investment in accessible facilities.
However, the difference between millennials and their older counterparts may not be quite as polarised as many may expect. The key issue is adopting a practical approach to broader workplace health – both physical and psychological. Use of environmental design techniques – for example day lighting and plant life – in combination with an appreciation of the cognitive strain that the connected business has on staff will form a fundamental part of effective workplace strategy.
These concerns have wide-ranging implications for built environment professionals, ranging from the employment law aspects of personnel data privacy to the need for facilities managers trained to cope with the demands of supervising smart, data-driven buildings. Similarly, the changing requirements of businesses and their staff will alter the approach to acquisitions and investment, with many companies looking for flexible lease structures and entailing, perhaps, a re-evaluation of what constitutes grade-A office space in this dynamic new environment.
All this means that the workplace built environment is on the cusp of fundamental change, and the professions need to adapt to ensure the office of tomorrow’s city is fit for use and users.
Helen Garthwaite and Suzanne Gill are partners at Wedlake Bell and co-founders of Tomorrow’s City, Today’s Challenge