In September 2020, a CBRE survey found that 39% of office occupiers expected their office footprint to shrink significantly. At the time, it seemed that a new era of remote work would claim the office as its victim. But as quickly as the doom and gloom for in-person work arrived, it evaporated. Less than a year later, with the pandemic still ongoing, the same survey found only 9% still felt the same way.
Channeling Mark Twain, it seems that the office was firmly declaring: “Reports of my death have been greatly exaggerated.”
As projections for the future of the office continue to evolve, the next 12 months will inevitably be the “Great Test Run of the Post-COVID Office” for pretty much every company reopening (even if early stages take place while COVID persists).
In the short term, the office needs to support the needs of employees. That means providing an environment that is healthy, safe, collaborative, and welcoming. As the pandemic recedes, workplace strategies should shift to align once more with the organization’s overall mission; for most companies and government agencies the workplace should be tailored toward enabling and inspiring collaboration and innovation around the product or services they provide, for higher education it is about the end certification and research being performed, and for healthcare it is about improving the costs and overall outcomes of patients.
So, what’s the best way to get the best of both worlds — to get what you need today while setting yourself up for success tomorrow?
The Great Underutilization Awakening
Real estate is the second-largest expense for most white-collar businesses, trailing only employee salaries. With such high overhead, it’s no surprise so many executives were ready to substantially reduce their real estate investments when remote work proved productive and efficient. The hidden secret to that takeaway, though, is that pre-pandemic, most companies underutilized their space by 30%. That’s a lot of sunk cost delivering no results!
At first, the surprising efficiency of the sudden remote work shift led to a mass awakening that the office wasn’t as critical to productivity as many thought it was. But as the pandemic has persisted, those sentiments have also evolved into a clearer understanding that the real value of the physical workplace is in driving collaboration, culture, and supporting the mission of the organization.
Given this context, it’s easy to see why KPMG’s 2021 CEO Outlook survey found that more than half of CEOs were actually considering increasing their investments in shared office space. The office isn’t going anywhere, it’s simply being reimagined as a more efficient, flexible, and functional space.
Moving forward, the most effective workplace strategies will focus on monitoring and assessing how employees interact with space and how that supports short and long-term business goals. The key is to find out if their office space is matching how, when, and why their employees work best — and if not, what they need to do about it.
The ideal office supports the needs of employees. Photo via Shutterstock
How to Think About Utilization
The number one goal for any organization re-entering the office is to make sure the way it uses space aligns with its broader business goals. There are a few high-level questions to ask about the space that can help guide this process:
- Does the space provide the right environment for promoting collaboration, teamwork, and culture/team building?
- Does it provide the right balance of dedicated individual workspace?
- Is there enough reservable work space available for hybrid workers to use on a daily basis? Is there too much?
- Are meeting rooms and collaboration space readily available and easily reservable? Do these spaces often go unused for most of the day or on certain days of the week
At the end of the day, optimal utilization comes down to making sure employees are getting the most out of the space, without extra, unnecessary overhead. Every employee will have a different framework for how they make this decision, and the needs of each office in a company’s portfolio will be different. It all comes down to creating a system that incorporates all factors affecting the human-office relationship.
How to Track Trends
The goal is to establish a “single source of truth” by extracting robust data from all possible sources about the way people interact with buildings. Businesses can extract invaluable information about utilization from systems such as:
- The software that staff use to reserve hot desks or meeting rooms;
- Overhead occupancy sensors that identify where staff tend to be when in the office, where they linger, and whether they tend to work in isolation or in groups;
- Visitor management solutions that track who comes into a building, how often, how long they stay, what kind of space they use when they’re onsite, and more;
- Environmental sensors that track indoor air quality metrics such as CO2 concentrations, air pressure, humidity that can promote the spread of disease, and natural sunlight.
Figuring out the way people work in the office goes a long way towards designing a space that caters to those preferences, and eliminates costly redundancies. It just requires access to multiple streams of critical information, and the ability to easily digest these trends to take action in a smart way. Especially given recent advancements in machine learning and predictive analytics, the advantages to sourcing this data are hard to overstate — especially when considering how to make portfolio-scale decisions across the entire business.
Effective workplace strategies must focus on monitoring and assessing how employees interact with space. Photo via Shutterstock
The Office Should Support Your Mission
In purely financial terms, the purpose of the physical office is to enhance the ROI of its most expensive cost center — its people. The calculation to determine the value of real estate used to be simple: productivity vs cost = value. But today, in such a dynamic and fast-changing world, it no longer makes sense to focus on those two metrics alone.
To borrow another Mark Twain quote, “The two most important days in your life are the day you are born and the day you find out why.” A key way of thinking about “why” our offices were born is to think about space as a critical resource that enables people to achieve their greatest potential. Use data to find incremental victories as well as overhaul opportunities that set the organization up for success. To stay flexible and remain competitive, no organization can accept runaway costs associated with underutilized office space. Fortunately, with the right data, and a way to learn from it quickly, there’s no need.
Kurt von Koch is an established leader in the IWMS and CAFM enterprise software markets with more than 20 years of experience in high-tech software solutions. As CEO and Chairman of FM:Systems, the top-rated facility and real estate software company, Kurt sets the strategic direction of the organization and works with each department to ensure a customer-first culture, operational efficiency, and growth of the business.
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