Now that business has normalized and the last of pandemic emergency measures are expiring, many organizations are struggling to find the right workplace and real estate strategy. Is it time to bring everyone back to the office full time? Would employees quit? Would they become more productive? If hybrid work strategies become permanent, how should real estate portfolios and workplace designs change?
FM:Systems recently conducted primary research to better understand how business leaders in HR, finance, facilities and real estate are keeping up with delivering the right spaces and experiences for the people who use them. We polled real estate / workspace professionals about their main real estate priorities for the next 1-3 years. Their responses were as follows, in order of importance:
- Reduce real estate expenses
- Expand the real estate footprint
- Invest in the “right” workspace more aligned with the culture, organizational mission and employee needs
- Downsize the real estate footprint
- Relocate offices
- Open satellite offices
In this article, we will explore how business leaders’ plans are evolving in the new world of work and what adjustments they are making in 2023. We will also look at how leaders are investing in spaces employees will value and they plan to obtain the workplace data needed to guide future decisions.
Business leaders have mixed feelings about hybrid work
Employees became accustomed used to working from home during the pandemic years and continue to express strong preference for work flexibility including hybrid or remote work. The last two years have also featured a tight labor market, so many business leaders are wary about rocking the boat on employee satisfaction by demanding workers return to the office.
Fortunately, several studies found workers were able to maintain or increase their productivity levels during the pandemic as they worked at home. In spite of this, 48% of business leaders in our research believe employees are less productive at home. It is also not cost effective for business leaders to maintain an abundance of office space if remote or hybrid work models continue on a long-term basis.
As we talk to business leaders, most would like to see employees come back into the office full-time. However, for the time being, leaders say they have accepted hybrid work and it will continue to be the primary work model for at least the next one to three years.
Although it is safe to say the hybrid work model is here to stay for at least the short term, there remains a disconnect between what employers and workers believe is ideal. How can businesses find a way forward that supports in-person collaboration while also maximizing employee retention?
The physical workplace should be a collaborative destination
Employees will enjoy coming into the office more if it is a healthy and safe environment, conducive to productivity and supportive of work-life integration. Employees should be able to see clear benefits to coming into in the office. Employers are committed to making investments in the workspace to create the right environment for employees.
First, employees need to feel safe. To enhance health, 35% of survey respondents said air quality was a priority for their future workplace. Fresh air helps personal productivity and also proper filtration cuts down on viral circulation and allergens. Additionally, 28% of workplace leaders thought health and wellness spaces (such as meditation rooms and access to outdoor spaces) were an important part of the workplace.
Employees benefit by interacting personally with colleagues and teammates. In person collaboration generates innovation and energy. Being around others helps employees experience the company’s culture and builds team cohesion. To support collaboration, 25% of leaders think the future workplace should include more conference rooms and 35% want to more open floor plans and less cubicles.
It is important to note that a lot of employees feel they can focus better on their work at home. The noise and people in open office environments can distract from difficult tasks. Many employees express a preference for a hybrid model where they can work on high concentration tasks at home while reserving meetings, brainstorming and ideation tasks for the office.
Finally, having a reasonable commute time is extremely important to employees. Real estate and facilities leaders seem to have mixed expectations about how location should play into their portfolio optimization strategy. While they identified relocation and opening satellite offices as potential near-term strategies,
Do your leaders have the data to make confident decisions?
With a hybrid work model, many organizations find they now have an abundance of unused or underutilized office space. Portfolio optimization is hindered if organizations lack understanding of how their space is used across buildings, campuses, cities and countries.
Our research revealed three out of four business leaders feel they lack reliable information on space and utilization on which to make informed decisions. How can decision-makers create real estate strategy without access to this critical information?
Business leaders want better management data so they can make data-driven decisions about their space designs and real estate portfolios. Real estate and facilities teams are prioritizing workplace management (50%), workplace analytics (42%) and visitor management (39%) solutions for technology investment over the next year.
For more insights and key strategies for workplace and real estate optimization, download our complete Refocus and Rationalize the Workplace Report