What does your company’s employee mix look like these days? Does it use contingent workers alongside full-time employees? Is it not there yet but heading in that direction? Like most companies, yours is probably asking the question:
How will our corporate real estate team provide workspaces for teams that fluctuate in size and shape and remain welcoming to freelancers and employees?
To remain competitive and unlock new sources of growth and revenue, companies are already embracing artificial intelligence, the Internet of Things (IoT) and robotic process automation (RPA). These changes are disrupting the way work is done and are driving some companies to focus on outsourcing and automating non-core work. Others are shedding fixed real estate assets while creating networks of workplaces that include company offices, co-working spaces and employee home offices. Meanwhile, organizations that value in-house collaboration are designing their workspaces and offices to bring employees together in a more creative environment.
The “Liquid” Workforce
It all began following the global financial crisis with the rise of mobile working and when many companies began to see the advantages of having a flexible, nonemployee workforce with variable, rather than fixed, costs. Nowadays, “workforce” no longer means only the permanent employees who come to the worksite every day. More often, the workforce includes full-time employees along with freelance, contingent and contract workers delivering just-in-time capabilities, on-site or remotely.
Today, an estimated 29 percent of the U.S. workforce is contingent. The number of these independent contractors, freelancers, consultants, seasonal workers and on-call workers of the “gig economy” will jump by 20 percent in the next five years alone, according to the Intuit 2020 Report.
Specialized Web-based services such as Upwork, OnForce, and Findly have emerged to connect on-demand talent with companies. Similarly, services such as MBO Partners are emerging to help companies manage their independent contractor networks. Some on-demand talent companies actually hire their talent and “rent” it to other companies at an hourly rate, just as Amazon Web Services and Microsoft Azure provide cloud-based IT infrastructure and software that companies can “rent” for a fee without having to hire programmers and buy servers.
Full-time Talent is Critical, Too
Companies also need to think about the everyday workplace experience for full-time employees. In many industries, talent is at a premium as Baby Boomers continue to retire at record rates. Attracting and retaining younger talent has become critical — and the workplace is at the forefront of recruitment and retention. Creating workplaces that motivate and inspire all workers is a competitive imperative.
Numerous studies have shown that younger workers have new expectations for their work experiences. They prefer shorter commutes than older co-workers tolerated and seek collaboration-friendly, non-traditional workplaces with vibrant, amenity-rich surroundings. JLL research finds that to help them cope with work pressures, 47 percent of workers want spaces for concentration, 40 percent want an environment that helps renew their energy, and 39 percent want opportunities to move away from their desks.
Now that mobile working and telecommuting have become commonplace, companies know that they need to give employees a reason to want to be in the office. Globally, 54 percent of employees regularly work from sites outside of the office, including Internet cafes, public libraries or co-working spaces. Employees younger than 35 are more likely to work offsite. Yet, certain kinds of work require on-demand workers to be in the corporate office, collaborating with co-workers and managers.
According to JLL research, human experience in real estate is a key differentiator for how employees interact in an organization. Therefore, it should play a core role in driving engagement, empowerment and fulfillment. New types of space and workplace services can facilitate new ways of working and contribute to an overall positive experience.
For instance, making it easy to reserve a workspace or a conference room takes the hassle out of the workday. Offering employees a choice in how and where they work contributes to their professional empowerment. The companies that excel at combining the right spaces and services will be best equipped to offer a positive employee experience.
The Office is Becoming a Network of Workspaces
The rise of the contingent workforce and the war for talent further complicate a complex web of considerations for workplace design and facility management. The question is, how can a company accommodate these workers?
Some facility managers are beginning to see “workplace” as a network of places to work, with work-enabling technologies for a mix of workers. Some workers regularly use the office. Some come and go. Flex staff may move in and out very quickly. That may mean tapping into on-demand, pay-as-you-go offices or touchdown space, meeting rooms and drop-in business centers for project teams, or creative configurations of corporate office configurations to accommodate fluctuating needs.
As co-working spaces have become more abundant, some companies are adding them into their workplace networks to accommodate on-demand workers. One start-up, the New York-based WeWork, has established more than 45 locations in cities across the United States. It’s even attracting interest from major companies needing temporary space. Companies such as Google, Amazon and Twitter offer their staff temporary workspaces like WeWork, allowing them to test prime new locations with very little financial risk – rather than committing to a long lease.
Another interesting concept is DEXUS Place, an Australian company that provides premium executive boardrooms, conference auditoriums, training and workshop spaces and other group working facilities in three cities. Cheaper than hotel meeting rooms, DEXUS Place provides advanced workplace technologies for high-definition displays and video conferences, along with catering, onsite IT support and related services. Considering how rarely some executive boardrooms are occupied, a short-term rental of a premium space is a viable solution for many organizations.
New Business Reality Requires New Corporate Real Estate Approach
As the business world is transforming, workforce management strategies are changing too. Rapid technology adoption is turning business models inside out. Converging industries and shortening product lifecycles are forcing companies to innovate more aggressively and to transform constantly. Many industries have become hyper-competitive, requiring businesses to become more nimble.
Corporate real estate is often perceived as slow-moving and costly — but smart strategies can align real estate with the needs of a fast-paced business. Adopting the “network of workspaces” approach is one response to unpredictable business requirements.
The reality is that traditional models for leasing and using space limit business flexibility. In a typical U.S. or European company, only 50 to 60 percent of desks are occupied on any given workday. The need to reduce occupancy costs has accelerated the adoption of alternative workplace strategies, such as open layouts, “hot-desking,” hoteling and telecommuting.
In an environment of high-velocity business change, companies need to balance agility with the need to provide inspiring workplaces, with all the technological tools employees need to be productive. It’s less about managing static buildings and space and more about creating, and consistently providing, the services, work-life supports and environments that enable work, bring down barriers and differentiate the corporation.
Rising to the challenge of the future of work involves many moving parts. The smart corporate real estate teams will create spaces inspired by their company’s vision. They will create agility and continuously pilot new innovations and environments. Planning for the future of work will allow organizations to manage uncertainty and create opportunity.
By Doug Sharp, President, Americas Corporate Solutions, JLL