Welcome to Workplace Bytes, your monthly rundown of news and ideas on real estate and occupancy management.
This month, the world of workplace is buzzing about:
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Hybrid work “readiness” among leading companies
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How to actually drive ROI from an occupancy analytics program
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Productivity downsides of 100% WFH
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CBRE’s latest occupier sentiment surveys
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The push to return to offices (and how to get it right)
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Dodging the downsides ‘peel and stick’ sensors
Let’s jump in…
McKinsey Survey Shows Companies at Varying Stages of Hybrid Work Readiness
A recent McKinsey survey reveals that companies need to do more to optimize workplaces and maximize productivity and employee satisfaction. The company identified 12 key ways companies can deliver a better workplace experience, with only a few achieving all of them.
Said the post, “Even some of the most forward-thinking companies are leaving both performance improvements and more efficient real estate spending on the table.”
Many of the characteristics McKinsey has identified relate to obtaining accurate, real-time insights into workplace utilization. The article goes on to say,
[R]elatively few companies have aggressively addressed the full spectrum of capabilities that would create a best-in-class workplace experience, which we find surprising given the ample potential benefits. For some, long-standing perceptions—including the notion that more days in the office is the measure of success—may stand in the way of meaningful change. For others, it may be that defaulting to old norms is easier than rethinking new ways of working. Companies may find that implementing magnetic and inclusive environments requires significant financial and leadership resources.
Clear goals and policies combined with outstanding measurement are the keys to success with hybrid.
New XY Sense eGuide: How to use Occupancy Analytics to Reduce Costs and Improve Workplaces
Most workplace teams are under pressure to reduce costs and footprints in light of low occupancy rates, hybrid workplace policies/behaviors, and the challenging economy.
To help these leaders make better decisions, XY Sense has just released a new Guide, Rightsize Right, which explores:
- How to reliably measure daily and weekly attendance in offices
- Strategies for space planning based on what spaces teams use and prefer
- How to maximize space productivity and ROI in less space
- How to collect and interpret the data you need to forecast future needs reliably
JLL Research: The Downside of 100% WFH
The popular trope about worker productivity during and since the pandemic says that working from home helped maximize worker productivity during and after the Pandemic. But is that true? The JLL team dug into US data from the Bureau of Labor Statistics showing low productivity gains, which may be tied to working from home. The article says that productivity gains in some areas are overshadowed by slower skills development for less experienced workers.
“[Y]ounger remote workers develop skills at a slower rate, innovation has lagged in remote settings, and employee engagement has fallen dramatically, impacting productivity and retention. In other words, marginal efficiency gains from remote work are overshadowed by diminished ability to develop human capital.”
Australia Leads in Hybrid Working
At 34%, Australia’s percentage of adults working from home is the highest in the world, according to this article and research from Adaptive. As in other global regions, there is tension as employers get more aggressive in driving employees back to offices. But Australian companies also have the highest rates of hybrid work policies, at 50% of all businesses.
CBRE Spring Office Occupier Sentiment Surveys Have Landed
CBRE’s research team recently published Spring 2023 Occupier Sentiment Surveys:
The reports provide valuable insights into what’s happening in workplaces and what actions and behaviors business leaders hope to drive.
There were three big themes we noticed across the regional surveys;
1. A push to return to offices
US: The US Report shows companies are focusing more attention on driving workers back into offices more often. This is particularly true in the tech sector, which lags other industries in office occupancy levels.
EMEA: The European Spring 2023 Occupier Sentiment Survey revealed that almost 90% of companies aim for employees to be at the office at least half the time and that future policy guidelines will likely become more prescriptive.
APAC: CBRE’s Sentiment report for the AsiaPacific shows 68% of companies focusing more attention on in-office attendance enforcement.
2. The end of ‘your desk’ …. Agile seating on the rise
US: US data shows permanent pesk assignments in decline. With the growth of hybrid work rules, companies expect to move toward hot-desk systems so they can cost-effectively reduce workspaces to reflect hybrid policies:
EMEA: Agile seating up 250% in two years. According to the EMEA study, the region’s desks-to-employees ratios are also changing rapidly. Two years ago, just 7% of companies had an employee-to-desk ratio of 2:1 or higher. Now the figure is 25%.
APAC: APAC respondents expect their organizations to move from rigid seat assignments to more flexible activity-based and hot-desk systems.
3. Recognition that current utilization is likely our ‘new normal’, so workplace teams are placing CRE bets
US: In the US, companies are taking a more strategic approach to policy setting and enforcement where accurate data to inform decision making takes centre-stage.
EMEA: Appetite for Flex space is on the rise. European CRE and occupancy leaders focus on increased workplace flexibility as they plan for the future.
From the study:
Around 60% of companies expect some degree of portfolio contraction over the next three years, partly as a result of hybrid work, reducing their space needs. At the same time, 45% are relocating some functions into better quality space. Lease structures are a focus area, with 41% of companies favouring shorter lease terms. Appetite for flex space continues to rise, with some occupiers prepared to consider higher allocations of flex office space than has been the case in the past.
APAC: Interestingly, 44% of APAC workplace leaders expect their CRE portfolios to grow in the next two years, with companies emphasizing employee-pleasing amenities as part of their planning.
While some cities across the region have seen vacancies skyrocket, other markets have CRE demand escalating rapidly as economic growth drives company expansion.
What’s “Differentiating” and “What’s Nice to Have” in a Hybrid Policy
Most companies know that workers want more flexibility in work rules. But which types of flexibility are most valuable, and which are less important? A recent survey conducted for Harvard Business Review asked workers about 11 potential forms of flexibility and how much each is valued. The data indicate four critical value types: Nice to haves, common, expected, and differentiating. It demonstrates how companies can craft hybrid work rules that are more appreciated by teams.
Mandatory Returns Drive Higher Attrition
A Hoodline article on low San Francisco Bay area occupancy rates says that mandatory return-to-office rules are driving higher employee attrition. The piece quotes Unispace research showing that more than half of companies mandating returns have experienced higher attrition rates. The phenomenon is helping other businesses without such policies to cherry-pick highly coveted talent.
An Op-Ed in Forbes recommends a three-step plan for avoiding backlash to changes in workplace policies. According to the author, the critical first step is obtaining accurate occupancy data.
“A thorough understanding of the functional aspects of what is and is not being utilized in the workplace can assist you in making more effective office planning decisions.”
HBR: Workplace Resource Demands ~ Perception | Reality Creates Problems
A June post on Harvard Business Review pointed out the challenges of using anecdotal information to make hybrid work policies and design decisions. According to the piece, leadership’s assessment of how workplaces are used is often incorrect, and a desire for an arbitrary hybrid approach across all people, offices, and functions impedes productivity. The perspective piece identifies multiple potential hybrid models:
The author recommends considering jobs and tasks, employee preferences, projects and workflows, and inclusion and fairness to get hybrid right. Careful consideration and employee involvement help companies understand the best ways forward.
This JLL piece shared a similar perspective: “One of the biggest hurdles leadership faces is a discrepancy in how the physical office is designed and how employees now use it.”
Driving Engaged Return to Office
An insightful podcast from CBRE discusses several ways to increase the appeal of in-office work, including flexible seating, driving senior executive RTO, and locating in vibrant parts of a city. The program discusses how workplace policies can add vibrancy to the surrounding community, which boosts a more exciting and engaging worker experience.
Dodging the downsides ‘peel and stick’ sensors
A battery-powered occupancy sensor pilot can seem very appealing … Almost like an occupancy insight candy bar. ‘Peel-and-stick’ battery sensors are fast and cheap, but are they the best solution for your company?
XY Sense’s Chase Cockerill speaks to occupancy leaders every day about battery vs. POE sensors. Check out his perspectives on how to make the right choice for your workplace objectives.
That’s it for this month’s edition of Workplace Bytes.
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