Until recently, it was common for businesses to allocate an arbitrary square footage to each employee. Now, choosing the right office space has never hinged on so many evolving themes.
Flexible working habits, environmental and social commitments and the dawn of Artificial Intelligence (AI) are upending how companies plan for the future. We say it is vital that companies properly interrogate how various teams are working and investigate how their performance might be optimised in years to come before committing to new office leases.
“We know that the talent pool is going to evolve over the medium term, which will be driven by AI and technology,” says Victoria Goodings. “If you focus only on the square footage, you're focusing very much on existing talent, doing the work they are currently doing, based on the commute they currently have. That has limitations.”
Office attendance is yet to settle in the post-Covid age, but fully remote work is an increasingly niche position. Businesses of all sizes are seeking to attract employees back to the office, typically for at least three days a week. Employees have saved considerable time and money on commuting and want compelling reasons to comply. Indeed, while the space itself is important, the length of the commute tends to trump any internal features.
“The commute is consistently a top barrier for people returning to the office, which poses challenges for businesses with workforces that have typical commute times above the UK average benchmark,” Victoria says.
High-specification or luxury features aren’t essential outside of some specialist sectors. Rather, occupiers tend to favour simple spaces that better serve modern workstyles. Biophillia and plenty of natural light are essential. Rows upon rows of partitioned desks are being removed to make communal spaces so teams can spend more time innovating. Large boardrooms or secluded offices are also on the way out - both are expensive in terms of fit-out and real estate costs.
AI will have a big impact on many real estate requirements, but exactly how will depend on the specifics of a given business. As many as 30% of jobs could be automated by AI, according to a November study by the Department for Education. Productivity gains could be huge, and new “high value” roles will be created as the technology becomes more embedded, the researchers found.
"Workspace decisions must be taken with one eye on commercial building sustainability targets and one eye on occupier net zero commitments" says Tanisha Krishnan. Landlords are upgrading swathes of UK real estate to meet the expected 2030 deadline, after which it will be unlawful to let a building with an EPC rating lower than B. Occupiers are eager to avoid disruptions while landlords make the required upgrades and tend to favour buildings that already meet the requirements.
Opting for the right space will hinge on clear communication, Victoria and Tanisha agree. Companies can gather reams of data by carrying out utilisation studies or using booking apps, but it’s important that the data is supplemented with input from the various workstreams across the business, not just real estate decision makers. All of this information can be collated to create a vision of the business many years from now, and only then is it time to instruct agents and designers, Victoria says.
“We help companies build a playbook for future real estate decision making, based on a deep understanding of how their employee-types are working, their performance needs, and what the future talent might look like,” she concludes.
