Workplace Bytes – September 2023

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Welcome to Workplace Bytes, your monthly rundown of news and ideas on real estate and occupancy management. 

This month, our top stories relate to what is our ‘new normal’ when it comes to utilization and occupancy in offices in the hybrid era, the tug of war over return to office mandates, and some eye-opening insights on the impact of workplace design on mental health.

Let’s jump in…

New Research: What % of office space is actually used?

The second issue of the XY Sense Workplace Utilization Index was published last month, capturing global attention. The report, available for free download, outlines the state of workplace utilization across APAC, North America, and EMEA. 

Major articles appeared in Bloomberg, Fortune, The Sydney Morning Herald, Crain’s NY Business, Seattle Times, The Irish Examiner, Japan Times, Hindu Business Line, Australia Property Journal, and more than 30 other publications around the world.

We also hosted a webinar featured experts from CBRE and Hassell to dissect what the findings mean for workplace teams, it’s well worth a watch (or so we think!).

CBRE Publishes 2023 Office Occupier Sentiment Survey

CBRE’s new 2023 Office Occupier Sentiment Survey: Global Summary landed this month. While their methodology for calculating office utilization differs from XY Sense’s, the findings show similar patterns.

55-60% of company leaders (varies by region) surveyed say they believe workplace utilization levels have stabilized.

 

Source: Slack, 2022

The regions also differ as to their targets for RTO. About seven in ten companies in Asia want teams to mostly or entirely work from offices. The figures for the US and Europe are 45% and 40% respectively.

In the US and Europe, real estate leaders expect portfolios to contract over the next three years, but in Asia, almost half believe their real estate portfolios will grow. Credit high-growth markets like India, Indonesia, and Malaysia for helping drive this bullish outlook!

Take note HR… Hybrid flexibility valued like an 8% raise 

According to new survey data from HBR’s Survey of Economic Uncertainty, most top execs expect hybrid work arrangements to continue to grow in popularity for the foreseeable future.

 

The piece quotes a National Bureau of Economic Research study that workers value hybrid work arrangements about as much as an 8% raise and reduces turnover/attrition by as much as 35%.

Senior Execs still reluctant to RTO despite mandating workers

There’s been a growing amount of coverage suggesting that the workers most resistant to RTO are actually…the very people mandating it. Some examples: Top Wall Street execs would rather quit than comply and Salesforce’s Marc Benioff suggesting that while the company has an enforced mandated RTO, he doesn’t work well in an office environment.

Stories like these aren’t new, but the sheer number of them is coinciding with the rise of more aggressively enforced RTO mandates across many industries, especially in the US.

RTO Enforcement escalates despite growing research suggesting mandates are counterproductive

Business Insider reports that recent economic challenges are shifting the balance between companies and their workforces. The result? Bosses are back in charge.

CNBC wrote a provocative story about how RTO mandates may actually be a way to lay off employees at a lower cost than redundancy payments. The piece quotes industry analysts who say that rigid RTO policies are stealth downsizing initiatives in which “companies are daring employees to quit.”

Business Insider posits that RTO mandates are unproductive and even cruel at times.

An interesting article in Fast Company suggests that RTO mandates signal a lack of trust in employees, which spurs productivity declines. The authors say that high-performance organizations show five key characteristics that are undermined by enforced RTO mandates:

  • Senior leaders trust employees
  • Managers trust their team members
  • Managers are trusted by their direct reports
  • Employees trust their team members
  • Employees trust the senior leadership team

From the article:

Forced, top-down return-to-office policies that don’t get buy-in from employees undermine autonomy for individuals and teams alike. And that hurts productivity.

The message is clear: If we want to boost productivity, we must rethink our workplace approach. Autonomy, trust, and flexibility should be at the forefront of this transformation.

A Forbes op-ed suggests RTO mandates drive down employee productivity and company growth rates.

Flexible lease terms now a top ask from companies

If the Pandemic taught the CRE industry anything, it’s that a company’s real estate needs can change quickly. According to research from CBRE, real estate leaders’ top “wants” are flexible leasing terms and shorter lease agreements.

Their more specific asks are focused on multiple forms of workplace flexibility and spreading the financial risk.

 Global workplace roundup

All over the world, CRE and occupancy are in the news, and we globally adjust to the “new normal.”

 

Oh, Canada…

There are signs of a commercial real estate revival in Canada after the sector suffered during the pandemic. RENX published a detailed piece on reasons for optimism. From the article:

Although C-suite leaders yearn for a return to full-time in-office work, a gradual return to pre-pandemic work norms is emerging as the most plausible long-term approach as employees value flexible work arrangements and compelling compensation structures.

Optimism from Hong Kong…

EJIInsight published an excellent summary of the reasons why hybrid is the best model for today’s workforce and why enterprises are fully embracing the hybrid model.

 

In Australia’s Wild West, Perth Mayor sounds off on WFH

Perth’s number one citizen says that WFH is causing significant problems in Australia’s top cities. Among the data cited to support the claim was a Global Survey of Working Arrangements study that found the average full-time employee in Australia spends an average of 1.27 days working from home.

 

Calls for Federal Government RTO in the US

For months, lawmakers have been urging Federal Government departments to mandate a return to office out of a belief that it will enhance productivity and revive ailing commercial businesses. Like many things in America today, the issue is fraught with political overtones, as the Democratic Party tries to walk a tightrope of encouraging economic growth while helping their traditional trade union allies advocate for their members.

Workplace design and mental health

In the months and months of discussion of RTO, there’s been less press attention on other workplace topics, but that appears to be changing as we enter a more stable workplace demand period. Among the most popular new topics is how workplace design can help address mental health challenges facing workers and their companies. This Fortune piece encapsulates many key themes – increased life stresses, fear that workers will harm their prospects by speaking about mental health, and workaholism culture, especially in North America, get significant attention.

An article in Corporate Wellness provides tips for developing workplaces that lead to better employee mental health:

  • Consult with employees
  • Use natural light
  • Incorporate ergonomic design
  • Use color strategically
  • Provide quiet work areas
  • Incorporate plants

This robust piece from Workplace Design underscores the critical role that workplace leaders play in enhancing the productivity and culture of business.

Some timely inspiration for us all on the intersection of workplace space, business productivity and individual empowerment.

That’s it for this month’s edition of Workplace Bytes.  We hope you enjoyed the read.

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