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P R I O R I T Y 4

Rethink the role of the physical office

The office will remain an important part of office life for most companies, but its purpose will change.

PRIORITY: 1 2 3 4

As companies look ahead to a world of hybrid working, they need to rethink the role that the office plays in working life. Most have concluded that the role will be smaller - indeed, only 18% of respondents to our survey expect that they will make a full return to the office.

With less need for office space, many companies are taking the advantage to reduce their office footprint and save a lot of money. In April, for example, HSBC said it would cut its office space by 20% and expects this to increase to 40% in the longer term. This is clearly also a key consideration for business leaders in our survey. When asked about the biggest challenges in migrating to new ways of working, respondents cite the impact on commercial property as their biggest concern.

What do you see as the main challenges when thinking about he future of the office? (N=300)

0%

Understanding impact on commercial property needs

0%

Understanding employee requirements

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Assessing the effectiveness of the model in supporting business goals

Although there are undoubtedly opportunities for companies to reduce their office footprint in the coming years, Ms Molyneaux advises business leaders to not rush into these decisions. “Most organisations will have an opportunity to reduce their office footprint, but the decision-making should not be led by that,” she says. “Shifting to new ways of working is an iterative process over time that requires a lot of experimentation.”

Just for collaboration?

Many companies have jumped to the conclusion that, in a hybrid world, the office should primarily be a place for collaboration. But this ignores the wider needs of employees, some of whom do not have comfortable set-ups at home to work, and see the return to the office as a highly welcome development to enable them to work more productively.

There is an important cultural component, too. “The idea that offices will be primarily about collaboration is a very European and American concept,” says Mitali Kulkarni, Global Senior Director for Workplaces at Adidas. “If you look at countries in Latin America and Asia, where the average houses are much smaller, people want to come to the office to work, and not just to collaborate but really do focused work, because they don’t have enough space at home.”


The six C’s of work

Making decisions about what work gets done where, and rethinking the role of the office, depends on having a good understanding of the types of work that employees do. For Stephanie Bloor, Director of Workplace Strategy and Culture at PwC, work can be categorised into “the six C’s”:

  1. Collaboration: working together in teams to co-create, innovate and refine ideas
  2. Creation (or concentration): undertaking focused tasks that are usually done individually
  3. Communication: Sharing information and updates
  4. Coaching: developing employees and giving feedback
  5. Commitment: Agreeing to actions, making decisions and inspiring others to act
  6. Community: Socialising with team members, building community, nurturing relationships

“Once companies understand the type of work their employees do, they can make decisions about where it gets done based on an understanding of whether being physically present adds value or not,” she says. “Most creation work, for example, can take place outside office locations, whereas coaching, community and collaboration benefit from greater in-person meetings.”


Focus on micro-moments

In the world of customer experience, the term micro-moments refers to small experiences customers have that play a disproportionately large role in shaping their perceptions of a brand. Harriet Molyneaux, Managing Director of HSM, argues that the same principle applies to employee experience, particularly as companies experiment with new hybrid working models. “Although significant moments in the employee experience, such as how you were onboarded or when you got promoted really matter, the micro moments are also very important,” she says.

Positive micro moments might include returning to the office and having a seamless connection to technology as well as a welcome pack from management. Negative ones might include coming to the office to find no one there, or conversely arriving to find it full with no space to work. “Teams need to identify these micro moments and plan around them, otherwise the impact on engagement and ultimately retention and performance, could be significant,” says Ms Molyneaux.

Ray Berg, Managing Partner of law firm Osborne Clarke, agrees that the experience of employees returning to the office has to be managed very carefully. “If someone is returning to the office for the first time in many months, it’s really important that everything works and that they see it as a worthwhile and positive experience,” he says.

Interaction with line managers is another area where micro-moments matter. “Remote working has meant that juniors usually get more interaction with partners in our firm but it can be clunky because everything is in 30-minute blocks of digital meetings rather than the shorter, more informal chats that you can have more easily in an office,” says Mr Berg. “This changes the nature of line management and so it’s really important to adapt and have a consistent approach.”

Understand how the office gets used

Some large companies are taking steps to gain a more data-led and rich understanding of how their employees use the physical workplace. Sportswear company Adidas, for example, has set up sensors around their HQ offices that collect anonymised data about how employees use the office.

These sensors can provide heat maps of how much different spaces get used, giving Adidas a detailed picture of whether desk-based or more collaborative environments are proving more popular. The data can also show whether people are concentrated in particular areas of the building, which helps in ensuring that the office environment is safe during the pandemic. “The current policy might be that we can only have 40% of employees in a building at a given time, but if all of those employees are concentrated in one small area, then we know we have a problem,” says Mitali Kulkarni, Global Senior Director for Workplaces at Adidas.

The company can also understand levels of utilisation, helping it to plan capacity appropriately. “Let’s say we get a request to open a new office for 100 people,” explains Mitali Kulkarni. “We can look at our data, assess utilisation levels and help the company make more informed decisions in the future about Real Estate strategies.”

Although it won’t be the only role of the office in future, collaboration will still be important and the data insights will enable us to understand how effectively teams are collaborating with each other, and where different teams should be placed in a building. “Each team has a neighbourhood in the office, and our data will show, completely anonymously, how often people in each neighbourhood are collaborating with teams that are next to them,” says Mitali Kulkarni. If we see that two teams sitting next to each other are not collaborating, then one of them could probably be moved next to a team where collaboration opportunities are greater.”

As companies figure out the new way of working, gathering insight and data about how physical and digital workplaces get used will be key to ensuring a smooth transition. Experimentation will be needed, and companies will need to try different approaches. Getting new ways of working right will not happen overnight - and it’s up to the CHRO, and other members of the leadership team, to provide the direction and drive to ignite future business performance.

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