A new impact report by Cushman & Wakefield opens on the office new meaning and purpose in a post pandemic reality. Office of the Future Revisited gives three major benchmarks to follow for both developers and employers: growing absorption of offices, perpetual hybrid model and a new role for office.
An improving economy paired with strong office-using employment growth is driving office space demand. Leaders recognize the value of bringing employees together, even if less frequently. Tenants are taking advantage of a favorable market with an eye to long-term space needs, especially the technology, financial services, healthcare and life sciences industries. Presently, the economic sectors that use office space are leading the robust job growth. Executive leaders continue to factor in employee preferences for more flexibility as they map their organization’s path, particularly in a labor market environment where employees have options. But even as companies eye flexibility, we already see signs that leaders are making strong bets on the future of office space. These office space leasing decisions signal that the office will continue to be a primary feature in the workplace ecosystem of the future.
The perpetual Hybrid model is here to stay, according to Cushman & Wakefield. Experts advise that now is the time to embrace hybrid, close expectations gaps between leaders and employees and cultivate a common understanding to optimize employee experiences. Organizations must answer for themselves “What does hybrid mean for us,” or run the risk of eroding employee engagement and business performance. Today, it appears that sectors that tend to be office-based are faring better than others—hospitality, for example. In many countries, office-using employment is already back to Q1 2020 levels. And even in countries where employment hasn’t fully recovered, it’s on track to return by the middle of 2022. Better work-life balance, financial benefits and savings, and a greater ability to focus without office distractions are just a few drivers of new workstyle preferences. A look at online discourse about the return to office showed the majority (54%) of discussion is neither strongly for or against it. Rather, the core of the back to office discussion is related to the mental health and well-being of workers. Employees continue to have legitimate concerns in these areas. Ultimately, organizations that use mandates will be at a disadvantage. Limiting choice in a post-pandemic workplace is likely to backfire, as Cushman & Wakefield global survey data shows that employees with choice and control over where they work perform better. The companies with the most engaged employees are—and will continue to be—the ones that provide their employees workplace choices.
Finally, Cushman & Wakefield experts argue that the role of office has changed. It appears the shift will not always necessarily reduce space per employee ratios as we are seeing many organizations reimagining space to emphasize collaboration while still utilizing similar amounts of square footage. In fact, strong job growth has spurred many companies to add office space to house a larger workforce, even if in a more agile manner. Regardless of space allocation, the office will require a new type of flexibility: one focused on personal choice, permission and trust. There’s no one standard for the future of the office—not only from company to company but from location to location within the same organization’s real estate footprint. Each organization’s real estate portfolio offers unique opportunities. What’s required of leaders is to comprehensively review not only the physical characteristics, functionality and utilization of existing spaces but the experience in each location to determine which spaces to keep, which to shed, and which to adapt to support a more agile workforce.