Panel Q&A: Redefining Workplace Property Strategy in the era of COVID-19

On October 7th 2020, XY Sense joined a virtual panel featuring property leaders from ANZ, Australia Post, CBUS and the Property Council of Australia to discuss CRE strategy in the era of COVID-19.

The discussion was wide-ranging and included themes like:

• The macro-impact of COVID-19 on CRE & property strategies

• The great downsizing debate (when? and by how much?)

• How offices will need to change to support post-pandemic work styles

• How guest panellists are re-defining their workplace property strategies

Watch the Replay

Panelists:

• Claudette Leeming, Head of Property Strategy & Performance, Australia Post

• Adam Garfield, Manager – Facilities & Property, Cbus Super Fund

• Ken Lynch, Head of Workplace, ANZ

• Alex Birch, Co-Founder, CEO, XY Sense

• Cressida Wall, Victorian Executive Director, Property Council of Australia (Moderator)

Q&A Written Responses

There were so many fantastic questions we didn’t get time to respond to during the panel, so we’ve pulled together the below Q&A responses with some of our panelists.

Q: With employees looking to rotate between home and the office, what is the panel’s view on moving away from traditional leases and instead using flex space operators on a more long-term basis or for remote working teams?

Claudette Leeming – At this stage would only see flex space augmenting workplace rather than replacing, be it to enable project overflow space or workforce access alternate locations.

Ken Lynch – For the short/medium term flex operators will likely continue to provide space for companies to satisfy demand that was not forecasted. Hard to see flex operators replacing property portfolios entirely, largely because people come to work to feel part of the company they work for and as such the company needs a ‘home’.

Adam Garfield – I think that flex space has a place in the post pandemic world with an ability to quickly and immediately respond to a need if businesses reduce space and have short/medium term requirements arise. There are great benefits to using it as we experienced with HUB Parliament Station for our 11 months with a complete turnkey solution, limited mobilisation & on costs and most importantly no fit-out or adjustments to a sub-leased property.

Q: What kinds of systems, tools, processes or business change will be used to manage a safe return to the office?

Claudette Leeming –  We like any business have documented COVIDSafe controls and guidelines. Our occupancy management systems allow us to track and trace close contacts in the event of an incident. We are also investigating digital applications to enable teams to coordinate their attendance in the workplace and the spaces they need. Beyond that we are likely to be observing, testing and piloting as this is new territory.

Adam Garfield –  We have tried a few tools to help us with managing occupancy and allocations as well as health checks through a system called Enborder.  We are introducing real-time occupancy management sensors into our new tenancy to enable us  to better manage social distancing and deliver reporting on utilisation of space (both workpoints and meeting rooms). In the short term, sensor data will assist us to optimise COVID safety and housekeeping practices and in the longer term to inform our strategic space planning requirements.

Ken Lynch – We have returned people to office on rotation in every state except Victoria. Physical distancing means we can only use circa every second desk so rotation capacity is reduced to ~50% (we managed our space tightly prior to Covid !). We also have a split team principle where teams need to be split over rotations. Re tools we use Serraview linked to our turnstile data and HR systems etc. which we track daily. We first used sensors back in 2014 and I think they have matured a lot in the last couple of years to the point where they may add value in understanding how space (not necessarily desks) is used. We were testing sensors prior to Covid and I can see a role going forward. Medium to longer term we need better space booking tools, in fact we may need very very clever AI type space booking tools. If there is a large take-up of WFH post Covid that will likely change the ‘neighbourhood model’. That may require whole teams to book spaces before coming into the office.

Alex Birch – From a tooling perspective, we’re seeing organisations implement a combination of space booking platforms and sensors like XY Sense to help manage COVID capacity limits and give workers the surety that they’ll have a clean desk/meeting room to work from if they are to go into the office. This webpage explains how the systems can work together well.

Q: For Claudette, Adam and Ken, are you able to comment on the practical metrics – over and above the 1.5m separation and 1 person per 4 square meters – you have identified in the configuration of your offices?

Claudette Leeming –  As you note we have tested and adapted our workplace to these metrics (limited physical change required). Any other physical changes will be reserved until time has been spent back in the workplace and we can observe, measure and evaluate what is and isn’t working.

Adam Garfield –  We have enough space to accommodate the majority of our workforce in the short and medium term.  Having just opened a new 9200sqm office we need to test the design intent and then listen and observe to how it works, and we can adapt to what could be a new iteration of the workplace in a post-COVID era.

Ken Lynch – Re office configuration similar answer to Claudette and Adam. In our newer fitouts we have mobile desks so that gave us more opportunity to implement physical distancing and retain a lot more than 50% capacity. Re metrics – as time moves on and restrictions hopefully continue to relax and more people come back to the office….we are set up to dig deeper into who is coming in, is it the same people? are people coming in teams or as individuals?

Q: Do you foresee the workplace being used over a wider timespace of each day to accommodate the density, transport and rental overhead limitations?

Claudette Leeming –  This hasn’t been our hypothesis so far.

Adam Garfield –  I don’t envisage this being the case where there is a significant shift in the times that people work in an office space.

Ken Lynch – This isn’t on our radar.

Q: What initiatives are executives in your organisation’s putting in place to build and sustain organisational culture?

Claudette Leeming –  This is a big question that will unfold as ‘the new norm’ becomes more apparent. At the moment the focus is very much on health and well-being given the massive change we are all experiencing.

Ken Lynch – We have had incredible leadership during Covid. Of the many initiatives the one that stands out for me is our CEO does a call with all staff every week since the start of Covid. Initially the agenda was focused keeping people informed very transparently re what was happening re covid and what ANZ is doing, that then broadened to hearing from key members of staff and bringing in our customers to hear directly re how they are going during Covid which was really powerful. It’s a brilliant initiative that keeps us connected as an organization. Another initiative I liked was publishing intranet content re how our Executives are working from home including their home office how they work, their families, pets etc. Re staff H&S… we have daily Zoom exercise classes available and courses on managing yourself and your mental health during covid , toolkits re managing teams during Covid etc.

Adam Garfield –  Our Executive have responded really well to ensure that the health, wellbeing and safety of staff during this shift to remote working has been the priority as well as ensuring that the Fund continues to deliver for our members. Maximum flexibility has been offered to all staff to ensure they can find the balance between work and caring for children or dependents during this time.   Quick decision making, keeping people informed through webinars and briefings and reviewing what is critical and what can de-priortorised has been crucial in ensuring that the balance is struck for people.

Q: I don’t see how a 50% reduction of utilisation logically equates to making the assumption that space can reduce by 50%. Thoughts?

Claudette Leeming – Agree, the two aren’t directly correlated as it depends on how the workplace is being used and occupied i.e. what types of spaces and facilities are needed in the future.

Alex Birch – You’re right. They’re not directly correlated and it certainly wasn’t my intention to frame as such. It’s my view that the vast majority of companies won’t drop anywhere near as much space as 50%. As we discussed on the panel, both COVID capacity limits and changes to the ‘way we work’ when in offices mean that space will need to be redeployed. The net effect is that you will likely require less space than before but it’s important to measure and understand how much and what types of spaces are being used before rightsizing. Reducing by too much will result in a situation that’s challenging to unravel and will have a big negative impact on culture.I recently wrote a blog about this – you can check it out here.

Adam Garfield – Agree with the above.  We don’t know what we don’t know as of yet and need to ensure we strike the right balance of staff having the choice to attend the office and right sizing space at the appropriate time and also when market conditions might allow for the right deal to be struck.

Q: Alex, the measure before acting philosophy you implement is understandable in an office that is currently being used. How do you extrapolate that into an office environment that is largely vacant at the moment?

Claudette Leeming – Very good point and why it would be important not to jump to any conclusions before people are re-occupying the workplace.

Alex Birch –  You’re right. It is hard to collect data if there’s no-one around! In my view, while offices are largely empty it’s a great time to get prepared to collect that data over the next 6-12 months. Gather a team and define what metrics/ data you’re going to need to make space/property decisions into the future, audit your current utilisation tracking capabilities (i.e. do you already have access to data from building systems, is there merit in a manual observation study?), then conduct a gap analysis to identify whether you’re current  data sources are rich or accurate enough. It’s also worth evaluating how prepared you are to collect what will be critical data over the next 6-12 months. Having tools in place to help experiment with spaces will enable data driven decisions and iterations on the new ideal space layout.

If your team is interested in exploring the role sensors could play in simplifying this process, during this ‘downtime’ my team can also deploy sensors for a pilot across specific floors and locations, getting you set up to capture rich, accurate utilisation data as people return in the new year and adapt their behaviours across 2021.

Q: Change management is a big element of the changing work environment as staff have initially been concerned about cleanliness of shared desks and wok environments. How have panellists dealt with this?

Claudette Leeming –  This is an ongoing work in progress. It is very important to communicate to the workforce specifically in relation to safety related controls and measures that have been put in place.

Ken Lynch – As well as the physically adjusted workplace we have lots of initiatives to assist staff who have returned to work  on rotation (1) we created RTO booklet which was emailed from leadership giving staff all the information they need about RTO (2) produced a video of the covid safe workplace so staff could see the ‘employee journey’ before RTO (3) produced an online ‘ecourse’ that was mandatory for all staff to complete before RTO

Adam Garfield –   Cbus just aren’t just returning colleagues to a COVID-Safe workplace but also launching a completely new space and the change management is going to be vital and differing communication tools to try and create a frictionless experience will be one of our pillars of success.

Q: After this WFH ‘disaster recovery stage’ do you foresee plans for mission critical teams being physically separated to mitigate risks for future infection? Will ‘mission critical teams’ ever work again in the same space?

Claudette Leeming – This would be an ongoing and evolving risk assessment depending on nature and degree of the risks at the time.

Adam Garfield –  We will continue to review this in alignment with the Fund and regulators requirements.

Q: A few studies point out that the office environment is key for innovation, socialisation, etc. whereas work from home is ideal for training, individual tasks, etc. What office/work from home ratio would the panellists consider appropriate? (i.e. 3 days a week from home, 2 in the office?)

Claudette Leeming- This is likely to vary for different people and teams depending on the nature of their work. The average may land somewhere in that vicinity however there is a way to go to determine that. The challenge ahead is navigating and bringing together what is optimal for the individual, team and organisation.

Adam Garfield- I certainly agree with Claudette’s response above and believe that people will prefer to work from home 2 -3 days per week.  When thinking of what might be a choice or what is mandated by an organisation we all need to consider the broader economic impacts to the communities that our offices are currently located.   A range of 20-60% reduction of people attending either CBD or commercial office hubs will have considerable impacts on small, medium and large businesses and prolong the economic recovery process considerably.

Ken Lynch – The only thing we can be sure of is that the pandemic has brought forward changes that were happening anyway. How much forward only time will tell and I do think that this will take some time for this to play through. The tipping point will come when physical distancing is removed. An initial rush back to the office may swing back and forth between work and home for a while before it finds a level.

Q: There is talk of consolidated/co-located offices evolving into smaller ‘hubs’ distributed geographically outside of typical CBD zones to reflect the dispersion of staff WFH – Does the panel think this foresight or fantasy?

Claudette Leeming – This may be where the role of co-working / shared spaces comes into play, supporting those who don’t wish to work from home when they aren’t coming in to collaborate in the more central workplace. An organisation of significant scale and geographic spread may however see value in this.

Adam Garfield –  We have reviewed this option and one of the insurers uses this strategy for call centers that work from home permanently.  At this stage this wouldn’t be a recommendation for our size operation but who knows in the future.  Don’t think it’s a fantasy but for the right organisation that is going through considerable growth or insourcing of transactional functions could definitely be a great strategy to pursue.

Ken Lynch –  I think take-up of a strategy like this will vary from business to business and possibly even from geography to geography. I think larger companies will always want a HQ to retain identity even if the space inside may be used and allocated quite differently form today.

Q: The workforce got used to working from home and demonstrated that work can also be done from home productively. What are the views of the panelists regarding the challenges around justifying the need of the office space/HQ after the pandemic?

Claudette Leeming – It will definitely be important to demonstrate the purpose and value of the workplace in the future. It is also important to remember what has felt like a long time isn’t really in the scheme of things. Nor are we experiencing all aspects of the work cycle. Those who have onboarded into new roles whilst working remotely, particularly younger workers, are likely to have a different experience to those who left the workplace with strong relationships and business knowledge.

Adam Garfield –  Majority of organisations I’m certain will always have a “home”. What that looks and feels like and how big or small it is in the future will be specific to requirements and workforce dynamics of that business or organisation.

Once given the choice and control (especially in Melbourne) on where we can work which isn’t our second bedroom, dining room table or study nook, it’ll be interesting to watch over the short & medium term on how people change their outlook – to Claudette’s point it has really only been a short amount of time.  As dynamics change, kids go back to schools, work & personal social activities start to increase, spouses/partners return to offices or just the realisation of being at home all day and all night just isn’t that appealing anymore, the trip into the city or business hub might just be worth it!

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