Imagine the feeling. It’s mid-2001. Fresh-faced and overflowing with ambition, I have embarked on a career as an office property researcher with global advisor Jones Lang LaSalle (JLL). No sooner are my feet under the table, than I uncover a steady stream of articles proclaiming the imminent death of the office – prompted by the extraordinary rise of technology and the realisation of home or remote working. Talk about timing. Have I just committed career suicide?
Of course rumours of the death of the office have proven to be greatly exaggerated. Over the ensuing 13 years more than 30 million sq ft of office space has been added to the Central London market alone, while 63 million sq m has been added to the stock of 24 core European markets over the same period.
Despite this clear increase in quantum, something has changed, and fundamentally. The inter-relationship between the physical office and its users – employees and employers – has evolved. The form and function of the office has been recast. The office is not dead but it certainly no longer looks or feels anything like it did a generation ago. And there is no turning back.
– Why has this change occurred? There have been four drivers at work.
Firstly, there has been a strong financial imperative for change. There is nothing like hard currency to focus the mind, particularly in the aftermath of the greatest economic downturn since the 1920s. The Global Financial Crisis (GFC) turned businesses on to the fact that real estate most often represents the second greatest operational expense to a business. It is therefore unsurprising that, at a time when most businesses were firmly in survival mode, the amount spent on office accommodation was scrutinised and re-evaluated. Some searching questions have been asked not only about expenditure but whether it brought value or efficiency. When business leaders realised that most office space is unoccupied for around 40% of the working day that created a second driver for change.
There has been a tremendous push for greater productivity within business post the GFC. The office has been swept up in this debate and has been repositioned. It is no longer regarded as a mere factor of production – a necessary expenditure to enable work to happen and profits to be realised. Instead the office is increasingly being viewed as a facilitator of productivity. Greater attention is being paid to the design, functionality and culture of the office. Get it right and the office can become a crucible of creativity, connectivity and collaboration. Get it wrong and the office becomes a financial burden that stymies innovation and the interaction that is so important for modern business.
The third driver was the realisation that as well as being the number one cost, people also represent the greatest competitive advantage of modern office based businesses. Put simply, a well considered office design gets the best out of employees and makes those employees content. Happy employees are productive employees. This focus on employee wellbeing is relatively new but is crucial not just in terms of supporting existing staff, but also in terms of attracting and retaining new staff in an era when creative and innovative talent is in short supply. It should also be recognised that this talent pool also brings a different value system into the office – one which puts personal lifestyle, flexibility and wellbeing ahead of financial reward. The office user and the requirements they have from the office are changing.
The fourth driver is indeed the insatiable rise of technology. Rather than being the destructive and disruptive force predicted back at the turn of the century, technology has been the enabler through which changes in the where, when, how, and what of work have been delivered. Mobile technology has allowed stronger, quicker and sustained connection between workers and the workplace. Video conferencing technology, now delivered through laptop computers, allows workers to be present even when they are not in the office. Software advances are enabling workers to collaborate on documents and projects simultaneously whilst spread around the world and working from a range of different environments.
Each of these drivers is fundamentally recasting the office, its form and its function. Externally, offices project brand values to consumers and, crucially, to current and future staff. Internally, office space has transformed from a sea of grey ‘dilbert-esque’ pods or row upon row of workbenches and is now a vibrant and diverse environment providing a range of work settings that encourage all types of work task to be undertaken – focused work, creative work, collaborative work, meetings, and so on.
Such has been the transformation that it is hard to generalise on what the office of today or indeed of the future really looks like. However, I would point to three over-arching office types:
- The experiential office – here the office has become the place where workers collaborate, create and, yes, have fun. It is not the place where email and administrative tasks predominate. It is a place that provides and stimulates workers to do their best work. Interestingly, many companies have found that in creating such environments they have re-enforced or re-established brand identify and created a place that workers want to work in and actually rarely want to be away from. What could be more productive than that?!
- The mobile office – companies are now recognising and trusting that, through technology, work can be undertaken at anytime and anywhere. Work is not confined to the office. Nor is work confined to formal corporate space. The rise of home or remote working is testimony to this fact. Most companies now accept that the workplace today is a mix of formal and informal spaces, of company office space and private, personal space. They also recognise that workers actually wish to operate across these various spaces at their own behest.
- The third space – Much like the death of the office narrative, the benefits of a rise in home workers has also been overstated. Employees, like any human being, are social animals. Those that work in isolation from home five days a week are unlikely to be fulfilled socially or from a physical or mental well-being perspective. Moreover, businesses themselves are likely to suffer from a failure to connect people and the creative benefit this connection brings. As a result we have seen the rise of third or co-working spaces. Most notably here is the serviced office space concept but this is developing rapidly and we are witnessing the creation of co-working spaces across the UK and beyond. These spaces sit outside the corporate real estate portfolio and provide facilities for workers to connect into a work environment and other workers – but not necessarily workers from the same firm. One interesting trend to watch will be the emergence of these co-working spaces in traditional commuter belt locations. As the financial, environmental and social cost of increased commuting is realised, co-working spaces in suburban locations are likely to offer a solution.
So my anxiety over my early career choice was misplaced. I am firmly of the view that offices will remain a strong and consistent part of our commercial landscape. But I am also convinced that the form, function, shape and fabric of the office will continue to evolve. Going forward the four drivers noted herein will remain influential and, I believe, will be joined by a fifth driver of sustainability. The office of tomorrow will not only need to assist productivity, employee well-being and creativity but also in controlling or reducing the carbon footprint for a business.