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Priority 2021: Unlocking Better Real Estate Returns through Workplace Experience

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The world is taking a fresh look at the value of corporate real estate, and that’s a good thing. It only took a few months of working remotely for many organizational leaders to begin asking, “Are offices really needed?” While it’s natural to react with concern when faced with a question like this, now is the perfect opportunity for corporate real estate leaders to lean-in and take advantage of this renewed interest in the value of offices.

In reality, questions about the value of corporate real estate are long overdue. Technology freed people to work from anywhere many years ago, but for many organizations presenteeism has acted as a proxy for productivity, which led employees to feel that they must come into the office, even if their productivity or wellness suffered. But it was the success of employees remaining productive during this year’s COVID-related quarantines that finally changed the attitudes of many organizational leaders about working remotely, and in-turn sparked this renewed debate about the value of offices.

Thankfully, these questions about the necessity of offices are beginning to wane, due to a combination of recent studies indicating that people still want to work from offices for a portion of their work week and the personal experiences of many organizational leaders who have grown sick and tired of working exclusively from home. However, that doesn’t mean that the conversation about the value of offices has ceased.

It’s become evident from our research at Herman Miller that distributed working - which refers to people working from a wide variety of locations - will be accelerated as organizations give their employees more freedom to work from home, the office and beyond. As work happens in more and more locations, the question that we should anticipate in 2021 is this: “Are we effectively leveraging our corporate real estate investments in this new world of work?”

The answer to this question lies in an organization’s understanding of workplace experience. Consider this analogy. Suppose someone said to you, "Restaurants are a thing of the past. They have been closed throughout COVID and we’ve all learned to successfully cook for ourselves. We’ve got the Food Network and YouTube to teach us how to cook like professional chefs and almost any ingredient we need is available through our local markets or Amazon. We can expect that our society will need fewer restaurants in the future.”

How would you react? You’d probably think that they were nuts, as most of us love going to restaurants. We don’t do it out of necessity, but rather because we cherish the experience. So why then don’t we react in a similar manner when someone suggests that offices are no longer necessary?

Simply put, we don’t value the experience of going to most offices nearly as much as we do restaurants. Restauranteurs know that they need to deliver excellent experiences in order to survive. If their food isn’t better than what we can cook at home, then they’ll close. In order to thrive, they need to compete - and now offices do as well. Where will work happen in the future? Well… where do we eat? Anywhere. The blunt reality is that the conversation we’ve witnessed about the value of offices would have never happened if most offices delivered highly-valued employee experiences.

As we look to 2021, we can expect a time after the vaccines are widely distributed (likely late summer or early fall) when most people flood back to the office to reconnect with missed coworkers and to escape the isolation and monotony of working from one place. But it won’t take long for most employees to realize that they’ve gained the autonomy to choose from where they’d like to work on a given day, and then we can expect people to begin to determine what their average work week looks like. For those facilities offering mediocre experiences, we can expect people to work from home more often and for organizations to see a lower return on their occupancy investments. For those facilities offering excellent experiences, we can expect to see more in-office activity, and those organizations will see a far better bang-for-their buck on their CRE spend.

Delivering a great workplace experience is complex and requires thoughtful planning. We suggest organizations consider a few key principles today to deliver better experiences - and thus a better return on their investments - for 2021 and beyond:

1. Focus on the person, not the space. The narrative for CRE leaders in the future will be less about how much space they manage and more about the value they deliver. A user-centered mindset is critical, which is just a fancy way of saying that important decisions about how much space you have, where your offices are located, and how they’re designed should be always viewed through the lens of the people using it. While partner organizations such as commercial real estate services firms, architecture and design firms and furniture dealers can assist you in this, it’s critical that CRE teams own this in order to deliver long-term value to their organizations. Over time, CRE teams will need to behave more like marketers - understanding employees as their consumers and viewing their spaces as products to meet consumer demands in order to compete in an open marketplace.
2. Understand your space utilization. Space utilization data has always been helpful, but in an era when people were expected to come into the office each day, it primarily assisted in understanding how different spaces within the facility were used. As employees have more and more opportunity to work in places other than the office, space utilization takes on heightened importance, acting as a proxy for whether or not the space is meeting demand and delivering value.
3. Ditch the densification strategy. In a world where people can work from anywhere, it’s no longer necessary to pack floorplates with small, densely planned desks for everyone. These strategies have generally led to lower overall utilization and have not been popular among employees. Instead, consider shared desks and scheduling platforms to help people find a desk when they need one, freeing up space to support work activities and experiences that are of higher value to employees.
4. Get laser-focused on supporting critical experiences that aren’t well-supported from home. This will vary by organization and job type, but our research indicates that there are three important experiences that people most miss while working from home - social connection with their extended internal networks, longer-duration (several hours or longer) collaboration sessions with teammates, and times of quiet individual concentrative work. This last point might surprise some as in the past there was a mindset that people could simply “work from home if they needed to concentrate” but for many this isn’t the case.
5. Don’t go it alone. Form a standing committee with key partners in IT and HR to discuss how to deliver better workplace experiences together. Lean on IT to help ensure that collaboration tools such as Teams and Zoom are effectively supported in the space, not just outside of it. They can also help you evaluate new tools such as scheduling platforms and workplace experience applications to better support on-demand workplace experiences. Partner with HR to discuss how the values of the organization can be expressed in the space to positively promote your organizational culture and to offer amenities that are valued rather than novel.

Through this multi-faceted approach to improving workplace experiences, corporate real estate teams can move beyond the challenges of 2020 with a renewed confidence that their investments are well-spent and that their work is meaningful and impactful to their organization - because it’s meaningful and impactful to the people who work there.

Ryan Anderson, VP, Global Research and Insights, Herman Miller Ryan Anderson serves as Vice President of Global Research and Insights at Herman Miller, where his team focuses on gaining and sharing insights to help Herman Miller customers thrive. Previously, Ryan was Vice President of Digital Innovation. With over twenty-five years of industry experience, much of Ryan’s work has centered on how technological and social changes have enabled new ways of working and living, and how the places we inhabit can support positive, productive experiences.

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