September 28, 2017
The workplace can and should be used as a strategic tool to support work and cooperation, to shape the experience of the brand and to produce competitive advantage for the organization. Even when not used as a strategic tool the workplace still affects all these parts and there is always a risk that the workplace has instead a negative impact if we are not aware of the relationship and really use workplace as a strategic tool to affect attractiveness, productivity, efficiency and sustainability. The workplace makes a great difference and it is becoming an important differentiator between successful and less successful organizations. I also strongly believe that the workplace management area is a key for us in the FM industry to bring FM to a higher level, to shift from cost focus to more value focus, and this is something we need to do together within the FM industry and we really should take the driver’s seat. But, let’s start from the beginning.
What is going on?
We can see four key drivers of change within the workplace strategy area, and these are: Cost/Price pressure; Sustainability & Corporate responsibility; Technology; and the War for talent & Productivity area.
When it comes to the cost/price pressure area, we still see a lot of focus on the cost side due to the economic situation, maturing markets, global competition and the fact that cost, like staff cost and rents, rise continuously. The rent is for example generally really high especially in the urban areas and we know that the utilization tend to be low. Almost never over 50% and in our own utilization studies regarding both our clients and ourselves we have generally seen a 35-45% utilization of work desks. In UK for example, the Real Estate managers see a reduction of almost 50% of the need for space within 5 years (Mitie, Executive Research 2014) and we can see the same development in the Nordic countries as well. However, we also see a change from only being cost focused to being more and more value focused. Are we getting what we need, could, and should get for the money and time we are investing? Are we really optimizing the value? And this is especially important in the field of FM where the overwhelming focus last years has been on diminishing cost and this without always reflecting on the relationship between FM services and employee satisfaction and productivity. In many cases the productivity cost can be so much higher than the actual saving we are making.
Regarding sustainability area the focus on sustainability continues to be even harder, and not only regarding environmental responsibility but also social and economic responsibility. We see a shift from just seeing sustainability as a hygiene factor to seeing sustainability as a business opportunity and a way to attract both employees, clients and business partners. In the future, companies will get neither clients nor employees if not being sustainable.
Regarding technology area, we see technology as both a driver and an enabler. Technology is both driving and making change possible, and I am not only referring to new technology, but also existing technology that has become both cheaper and more available for us. For example, QR code technology is today more than 20 years old (!) but we have just recently started to see and take advantage of this technology. We, both as private persons, employees and organization, have become much more mature when it comes to technology. We are today more used to technology and to trying out new things – and if it does not work, we try something else. We also tend to see possibilities with technology to a greater extent than before. We see how it can help our lives and work – simplify, improve, streamline, fasten and secure – and we have begun to demand it.
Corporates are fighting a war for talent and increased workforce productivity
When it comes to the forth area, war for talent and productivity, we see that corporations today are fighting a war for talent and increased workforce productivity and that the workplace, meaning “office, home and third place”, is really becoming an important differentiator!
What we can see is that:
- Unemployment remains high. However, both private and public sectors struggle to recruit and retain talented people in several areas and regions. We also know, looking at the demographic development for example, that this war for talent is just increasing. We will have even greater lack of talent in many areas and regions in the future and therefore even a greater war for the talent.
- The workforce at our workplaces today is diversified. We have for example a 4-generation workforce today with different preferences and attitudes towards work and workplaces, even though I believe that pretty much the same things are important to people regardless of generation, but of course, there are some differences as well. There are also other variations amongst the people, for example, when it comes to cultural and religious differences, background, and of course different personalities like introverts and extroverts.
- Many people at work today are not engaged. According to Gallup 63% of employees are not engaged and 24% are disengaged as an average of 142 countries (State of the global workplace, Gallup, 2011-2012). Many people come to work and lack motivation and just do a minimum effort and are “less likely to invest discretionary effort in organizational goals or outcomes”. Also many are “actively disengaged indicating they are unhappy and unproductive at work and liable to spread negativity to coworkers”. How does this affect creativity, efficiency, productivity and performance of the employees and the organization? And how big is not the potential of getting more creative, efficient and productive employees if we can increase the engagement.
- Many people (47 % according to Leesman Office Survey as an average of >100.000 respondents. Leesman, 2015) feel that their workplace does not enable them to work productively. If I feel that my workplace does not enable me to work productively, why should I go to the office? I might rather work from home, from a café, or from somewhere else.
- There is a strong relationship between perceived comfort and self-reported productivity, with differences in productivity as high as 25% reported between comfortable and uncomfortable staff (The Impact of Office Design on Business Performance) and, “with a 1 to 4% increase in perceived productivity for a 15% increase in satisfaction” (The Holy Grail of Measuring Workplace Productivity, University of California, Berkeley). You cannot of course measure productivity objectively when it comes to knowledge workers. Productivity differs a lot from person to person, but also there really are lots of different factors affecting productivity, and it is impossible to know exactly what factors affect how much of the productivity, for example how much the workplace or different aspects of the workplace affects the productivity, but of course we know that it affects. Instead, we measure the perceived individual productivity and for example, if we feel that our workplace enables us to work productively, as in the Leesman Office survey mentioned above.
- “There is overwhelming evidence which demonstrates that the design of an office impacts the health, wellbeing and productivity of its occupants”. (Health, Wellbeing & Productivity in Offices, World Green Building Council)
- “Appealing workplace facilities consistently DOUBLES the likelihood of a candidate choosing an employer regardless of the combination of other variables”. (Does workplace design affect employee attraction? Hassel and Empirica Research) It is really important that the workplace signals what we want it to signal and that it shows that we are practicing what we are preaching. Everything in our workplace sends signals, and not just the design but also behavior, services and solutions. The workplace needs to be trustworthy and consistent with our mission, values and offering. The workplace is an important platform for the brand management of any organization.
In conclusion, people are the largest expense and most important investment for any organization. What may appear as a modest improvement in employee health or productivity, can have a huge financial impact for the organization. The overall picture above is pretty general, no matter what company or business area. Of course, there are differences and some organizations in some areas and countries have slightly better or worse figures, but in general, we believe that every company can do a lot better! Can attract and retain more people, can save more money, can be more sustainable and have more satisfied, engaged and productive employees and overall perform better. I know that some organizations have realized this and I know that more will follow.
Workplace management – a single function in companies in the future?
If we look at the workplace management area generally, we see lot of interesting things happening. Traditionally we have had a silo thinking here, but now the workplace management area is becoming a more coordinated function. In for example England 25% of the Real Estate managers say that they already have seen this happen, and 40% say that they see this happen within 5 years. (Mitie, Executive Research, 2014) We also see these new workplace titles and functions like Head of Workplace and Chief of Work. The main objective for this new function is to increase the productivity and performance and to enable this, coordination of HR, IT and CRE/FM-functions is absolutely necessary. These are all important parts of the workplace holistics and the common aim for the workplace function is of course to make work work better!
Coor Smart Office – Holistic lifecycle perspective on workplace management
In our Smart Office model, we have both a holistic and lifecycle perspective on workplace management. Smart for us means that the workplace is attractive, productive, efficient and sustainable during the whole lifecycle of the workplace. As we see it, we can use the workplace as a strategic tool to:
- Strengthen the brand
- Attract and retain people (both employees, clients and partners)
- Maximize the output by enabling cooperation and making the employees more satisfied, healthy, inspired, engaged, creative, efficient and productive
- Optimize the use of space, resources and money
- Increase sustainability regarding both people, planet and profit
Even when not used as a strategic tool, the workplace still affects all these parts and there is an overwhelming risk that the workplace has instead a negative impact regarding attractiveness, productivity, efficiency and sustainability, if we are not aware of the relationship and really use the workplace as a strategic tool. This applies to all workplaces and offices regardless of what organization or business area it is. The workplace impacts the business results!
If we look at the holistics of our model, we see that it is always the employees who are to be supported in the workplace and all the parts – meaning the process, place, technology and services – need to be in place so that the office can fully support the employees in their work. These parts need of course always to be in line with the mission, vision, strategies and goals of the specific organization. We believe that a Smart Office is:
- Centered around the people working there. What attracts and motivates them? What do they need to be able to perform at their best?
- Based on the activities that are to be performed in the workplace. Where and how are these activities best performed?
- A place designed for flexibility. Flexible in a way that it is accessible and used every day depending on different activities and that it is open for changes and innovation over time.
- Enabled and enhanced by technology, which efficiently supports the needed ways of planning and performing work.
- Enabled and enhanced by the services provided regarding both function, convenience and experience.
- Sustainable in every possible way balancing both economic, environmental and social aspects.
Treat the workplace as a process – not as a project!
If we look at the lifecycle side of our model, we are considering the whole lifecycle of the workplace. Normally up to 10-20 years or even more. In the beginning, we have a project, often lasting up to a few years, before moving to the new workplace, and the project normally ends 6 months after moving in. In most cases, we could say that the workplace is already OLD day one when we move in, because we have not even during the project followed up the needs and adjusted the process, place, technology and services enough. By time it just gets worse, the discrepancy between the needs in the workplace and the support from the workplace. We treat the workplace as a project instead of as a process. The needs of course vary and changes all the time and we need to continuously follow up the needs and optimize the process, place, technology and services. This should be a never-ending process. A process – not a project! In order to stay smart, the workplace needs to stay attractive, productive, efficient and sustainable through the whole lifecycle.
Utilization analysis – good basis for workplace lifecycle management
Before we make a workplace change, whether it is moving to a new office or transforming the existing office or some other workplace change, we usually conduct utilization analysis. We want to know how we are using the workspace, so that we can have a better idea of what we might need in the new workspace. How are we working? Where are we working? How much space do we need? What kind of space and workstations/collaboration areas do we need and in what extent? Etc. This is natural for us to do. At Coor and for some of our clients, we for example use our Coor SmartUtilization-solution with heat sensors for this, but we of course also combine the metering with interviews and questionnaires. We want to get a better understanding of also why we are using the workspace the way we are using it, how well the workplace corresponds to our needs (are we satisfied, does it enable us to work productively etc.), but also to get a better picture of what we might be needing in the future.
Yes, of course we need to conduct utilization analysis before the workplace change and there really is a huge potential in reducing square meters, increasing number of employees, increasing employee satisfaction and productivity and all of this is enabled by objective and reliable facts. But, what we tend to forget is that workplace is a process, and that things changes continuously and that we therefor need to continuously monitor and adapt to the ever changing needs in order for the workplace to keep supporting the needs of the employees and the activities conducted in the workplace. However, in most cases, we only conduct utilization analysis before a workplace change and we also just do it for a short period, so even immediately after the change, the workplace does not meet the needs, and then day by day it just gets worse, until we have another workplace change project after maybe a few years. Utilization analysis, and especially permanent sensors are an excellent basis to start following up the workplace in a better way and start adapting the workplace to the changing needs of the people and the activities conducted in the workplace. This as a basis in a workplace governance model including continuous metering of important workplace parameters like engagement, self-reported productivity etc combined with more qualitative methods to follow up the changing needs, would help us keep the workplace smart during the whole lifecycle, and not just in the beginning.
As a conclusion, we believe that it is really time to take a more holistic lifecycle perspective on workplace management in order for organizations to perform better. It will make a difference. Smart workplaces and holistic workplace lifecycle management is good for the people, good for the business and good for the environment and yes, the workplace really impacts the performance and attractiveness of the business!
Kati Barklund is Senior Solution Specialist, Modern Workplace at Microsoft. At the time of writing she was Group Innovation Manager Workplace Services at Coor Service Management Group and Global Ambassador for the Nordic countries, Workplace Evolutionaries. This article also appears in Work&Place.