The Future of Work: act now, not tomorrow has been saved
The Future of Work: act now, not tomorrow
In our latest article on the post-COVID way of working, we reveal how organisations can adapt to an evolving workplace with the insights of corporate real estate managers
Working from anywhere other than the office has become ‘the new normal’. We interviewed corporate real estate (CRE) managers about the post-COVID working environment. What is their understanding of office use and need for the future? What about the integral business case? Have any long-term policy decisions been made?
What we found
The findings were compelling: the first article (published during the early stages of COVID-19) showed many organisations expected a 40-60% reduction in real estate footprint. The second article adjusted this estimation to 10-20%; but now CRE managers are even more cautious regarding estimated office space reduction. It is likely that COVID-19-induced changes, such as working from home, will become a permanent fixture in the ‘Future of Work’ strategy. Pre-COVID-19 trends, such as activity-based working concepts, are also gaining traction. The clear message is that the work environment is constantly evolving, and organisations must adapt accordingly.
Developing the strategy
CRE managers indicated that many organisations have already made long-term hybrid working decisions. They are increasingly developing and implementing hybrid work policies, with certain important elements being considered:
- You cannot rely on a standard hybrid work policy; it must be tailored to each organisation and its employees.
- A hybrid work policy impacts an organisation’s overall real estate strategy and requires reconsideration of its portfolio. Some offices may become obsolete, while others are redesigned.
- An integral business case can optimise the development of the Future of Work strategy. It encourages departments to collaborate, resulting in cost savings and deeper business insights.
The evolution of the hybrid work policy
Working from home has been a more positive experience than employees and organisations expected, with clear advantages for both, such as a better work-life balance and reduction in costs. But the work environment is constantly evolving and a new hybrid work policy is a crucial part of any organisation’s Future of Work strategy. All CRE managers indicated that a uniform hybrid working policy is not the answer: employees have different needs and there are clear differences between types of organisations.
The four perspectives
Deloitte offers organisations the Hybrid Workplace Framework to determine their desired Future of Work strategy. The framework provides insights into which type of work and activities should be performed by whom, where and how, and is based on four perspectives, all of which constantly interact. If CRE managers want to arrive at a feasible Future of Work strategy, they should ensure these perspectives (see Chart 1) are aligned, with a focus on human experience at the heart of all decisions.
- Human experience encompasses efficiency, culture and connection, wellbeing and employee value proposition and work-life balance. Everything ultimately hinges on this. The hybrid work policy needs to be flexible enough to adapt to this diversity of needs. It also needs to consider the war on talent, offering a flexible and attractive workspace to entice skilled workers.
- Place focuses on distribution of work (future footprint), real estate portfolio strategy and planning, transactions, travel and mobility. Organisations are aligning the new hybrid work policy with real estate strategy. Most say a large number of employees work from home at least a few days a week, using the office for meetings and work/social collaboration, etc – particularly headquarters, which represent corporate identity. The trick is to balance the two environments.
- Space looks at how we use the office: workspace vision and design, space capacity planning, smart operations and service delivery, alternative pricing and commercial models. As the working environment fluctuates, adjustments to offices have to be made – some small, such as minor technological changes; others more radical, such as replacing individual desks with brainstorm rooms and more collaborative workspaces.
- Technology is centred on a more connected workplace, hybrid collaboration, data and IT infrastructure and increased consideration of cyber security.
Integration and insights
All CRE managers agree that the most integral change in developing a Future of Work strategy is to factor in more flexibility for later adjustments. In real estate, the expectation of how this new way of working would reduce office space has diminished. CRE managers are now more cautious in their estimations. In fact, they might even require expansion to meet evolving needs: for example, spacious individual workplaces and areas for social gathering. They may ask for flexibility in current and future lease contracts; many stated that they “prefer short lease contracts over long-term ones.”
When developing a Future of Work strategy, it’s important to recognise that all perspectives of the Hybrid Workplace Framework are interconnected. An integrated business case can optimise this process by combining the interests of different departments. The challenge lies in cooperation, as each department has its own focus.
Developing an integrated business case has many advantages. It can save costs – for example, lowering real estate fees by reducing office space, or requiring less commuting, bringing mobility allowance savings. Integration also provides important insights to support strategic decisions, enhance collaboration and improve overall organisational performance.
All in all, most CRE managers indicate to have developed and implemented a new Future of Work Strategy. It is time for all organizations to act now and start doing the same, as hybrid working is here to stay.
Written by Mark Platier, Danique Havenga and Bernice Kieft | Deloitte NL