We interviewed almost 400 global business leaders to understand how they’re adapting their real estate strategies for the years to come. The below insights are based upon their responses. To discover the data behind the story, get the full picture in (Y)OUR SPACE.
The post-pandemic era will fuel a wide-ranging business transformation agenda. Despite the binary debate that dominated the first half of 2020, the office will be a key device in successfully meeting the challenge. But our relationship with the office, its purpose and its form will evolve. New models of work will emerge.
Covid-19 forced businesses to implement remote working processes overnight. Up until that point, working from home had been an exception for many, rather than the rule.
But as a testament to operational resilience, most businesses surpassed their own expectations. Indeed, 59% of the global occupiers we surveyed rated their experience of working from home as ‘positive’ or ‘hugely positive’.
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And yet, despite much of the sensationalist rhetoric that dominated our screens during lockdown, such a positive experience doesn’t represent the ‘death of the office.’ In fact, ‘death of the office’ claims ignore three very crucial points:
1. They regard the choice between the office and remote working environments as binary.
2. They take short-term (and in this case, enforced), adaptations and plant them in a ‘business as usual’ operating environment, without much evidence of their long-term viability.
3. Outside of Covid-19, the adoption of a fully remote working model which ignores the need for office space (despite a handful of well-rehearsed examples) doesn’t represent mainstream business aspirations.
That’s not to say the office will not undergo an evolution. But new working styles will emerge – models which are far more dynamic, flexible and complex – and all of which share a very important feature: The office.
Three emerging models of work
Businesses are drawing on the lessons – both good and bad – from the global workplace experiment to create a number of potential responses. Three emerging models of work have been particularly evident.
1. Hybrid working
Hybrid working has been the most common emerging model of work. It comprises a combination of in-office and remote working in varying proportions so that employees and employers can enjoy the benefits of both.
HSBC, for example, has said it’s cutting its office space by 40% in an effort to save costs and leverage the benefits of both office work and remote work. In announcing the business’s shift to a hybrid model, Chief Executive Noel Quinn explained space reductions will be targeted on offices “with support functions and head office activities”.
Likewise, Lloyds took a similar – yet less drastic – route, announcing it will cut its office space by 20% by 2023 and embrace hybrid working. But, as we discuss here, the business reality is not as simple as slashing large swathes of office space proclaimed in such recent headlines. Meanwhile, PwC announced on March 31st 2021 that staff could work from home twice a week and “start as early or late as [they] like.”
In Singapore, Standard Chartered has begun piloting a flexible working programme for up to 80% of its employees, while local banks such as DBS and UOB are redesigning their working arrangements to embrace hybrid working.
2. Work from anywhere
Some businesses, particularly within the tech sector, have moved further still, adopting ‘working from anywhere’ policies, which give employees the freedom to choose where they work and how. We’ve seen adoption on both sides of the coin here – by businesses and by office space providers. WeWork, for example, has created a new coworking membership, dubbed ‘WeWork All Access’, which provides access to “hot desks, conference rooms and private offices worldwide”.
In terms of business adoption, Nationwide recently told its 13,000 employees they could work from anywhere, following an extensive staff survey which highlighted a demand for remote working, as well as a blend of the office and home. Joe Garner, Chief Executive of Nationwide explained: “We are putting our employees in control of where they work from, inviting them to ‘locate for their day’ depending on what they need to achieve.”
And earlier in 2020, Spotify made a similar announcement, citing employees could work from home, the office or a mix of the two. Staying true to its ‘work from anywhere’ buzz phrase, the tech giant is also providing additional flexibility to the countries staff can work from – albeit with a few limitations to restrict time-zone issues.
Likewise, Japanese telecommunications group, Nippon Telegraph and Telephone (NTT), recently signed a deal with IWG, the world’s largest flexible office provider, to allow its 300,000 employees to use IWG’s global network of workspaces.
3. Hub and spoke
We’ve also seen choice offered through proposed ‘hub and spoke’ models of work. Here, traditional hub offices, which are HQ-type buildings fulfilling core functions such as client engagement, are coupled with spoke offices, which are more geographically dispersed. Naturally, spoke offices present opportunities for employees to work closer to home and for employers to potentially mitigate environmental impacts through reduced commuting, build operational resilience by being multi-locational and also make required savings on real estate costs. Despite saying staff could work from anywhere, Nationwide’s strategy crosses over into the hub and spoke model, as employees can work from their local High Street branches if they’d prefer a shorter commute. Nestle and Salesforce have also followed suit.
The bottom line
There will of course be considerable variance in individual business responses. The likes of Goldman Sachs, for example, is urging bankers to be at their desks full time as soon as possible, as remote working is an “aberration”, according to Chief Executive David Solomon. But based upon the responses of almost 400 global occupiers, employing in excess of 10 million people around the world, we sense there will be a bit of a pattern; one that truly celebrates the office’s form and function, but invites it to be smarter, safer and more sustainable.
To explore what the future of work means for your business and understand how you can optimise your real estate strategy, step into (Y)OUR SPACE, or get in touch with a member of our team at www.knightfrank.co.th/commercial/occupier-services
