8 minute read 19 Aug 2020
Woman working laptop table plants

The purpose of place

By

Selina Short

EY Oceania Real Estate, Hospitality and Construction Managing Partner

Expert in intelligent buildings and smart cities. Champion of innovation and the strategic importance of cities.

8 minute read 19 Aug 2020

COVID-19 has dismantled decades of obstruction to remote working and forced a fundamental rethink of the value of the office.

The office is dead! Remote working isnt so great after all! While headlines such as these make for good clickbait, many stories about the pros and cons of remote working miss the more nuanced discussion being had over Zoom meetings. Both the office champions and work-from-home aficionados have valid points, but don’t expect a gladiatorial showdown, as it’s far too early to declare winners and losers in the COVID-19 coliseum.

What we do already know is that businesses and office owners must closely consider the far-reaching consequences of this crisis and how it will reshape the relationship between people and place. COVID-19 has dismantled decades of how we think about workplace and forced a fundamental rethink of the future of work. 

Home will be a feature of the future office

48%

of EY employees in Australia and New Zealand want a mix of office and home settings time.

Why work from home is working

So, what do we know? There are four main reasons cited in study after study so far. These are all reflected in EY’s latest Workforce Pulse which took the temperature of 4,500 employees in Oceania in July. These studies are all telling us:

  • Productivity powers on

    Nearly four in five (78%) of EY people think they can work just as effectively in a remote setting as they do in the office. We’re hearing that work requiring concentration can be achieved quicker and easier at home – provided there are no kids, flat mates or noisy renovations next door. We are also being reminded of design failings that existed pre-COVID.

  • A level playing field

    Working from home has also democratised our interactions, as everyone is operating from the same platform. Edelman has found video calls have increased contributions from junior staff, with 33% noting that meetings are less hierarchical as the ‘head of the table’ dynamic dissolve. Introverts can raise a virtual hand or type a question in the chat box, and those who have always worked in a different location no longer feel left out of the water-cooler conversations.    

  • No more rush hour

    No one misses the commute, but the further away people live from the office, the less they are relishing the return. In EY’s case, those more than an hour away from the office are 35% more likely to want to work remotely indefinitely than those who live within half an hour of the office. 

  • More time for leisure

    People are enjoying extra time with family, exercising or engaged in hobbies. Even those of us who have never worked harder are appreciating more family dinners at home. Edelman’s survey found 64% of remote workers are prioritising fitness and self-care in a way they did not before COVID.

Norms are changing. COVID-19 has blurred many of the boundaries between work, leisure and learning and this disruption is reshaping the norm of shared time off. EY’s 2020 Megatrends Report explores work and life unbounded and points to a future where major components of our lives are constantly rebalanced to meet changing circumstances.

EY employees have told us that 48% want a certain number of days in the office each week and to work remotely the rest of the time.

A further 44% want to work remotely as the default from now on and to use the office for specific purposes, like client meetings, team building and social events.

With that in mind, it is unsurprising that 87% of EY’s people agree we need to rethink how we use our space. We have seen similar commentary emerging around the globe. Boston Consulting Group’s survey of 12,000 employees found that 60% want flexibility in where and when they work, while global recruitment firm Adecco has the figure at 75%.

It’s not all roses

But before we call time on the office, there is also striking convergence on the downsides borne out in both local and global data:

  • Collaboration killer

    Gensler says 55% of workers find collaborating harder online. For many people nothing beats gathering everyone in the same room to shake out some ideas. It can also be hard to get to know a new client, onboard a new employee or negotiate a complex deal without that personal interface. 

  • Less osmosis learning:

    Employees are worried they may have less opportunities if they stay away from the office. We often overlook or undervalue learning by osmosis in the workplace, but this is especially important for people at the earliest stages of their careers. A colleague recently reflected that some of his most important career discussions, rising through the ranks, occurred in the taxi ride to the airport. The opportunity for learning simply by proximity is something that disappeared overnight. 

  • Social isolation

    Millions of people working from home also has massive social implications when loneliness was already the second biggest challenge for remote workers prior to the pandemic. There’s clear evidence that loneliness is a long-term productivity killer. Humans are hardwired to connect, and the office has always been the place that people make friendships, and sometimes meet life partners. Gallup has identified 12 indicators of high performing teams; behind many of these indicators is the sense that “someone at work seems to care about me as a person” and that they have at least one close friend. With loneliness poised to become a serious public health issue, what role should businesses play in reimagining the office as a place for strengthening social fabric?

  • Work and life unbounded

    EY’s 2020 Megatrends Report argues that, as entrenched norms governing traditional work structures are eroded, the “leisure dividend” gained from eliminating the commute brings new complications: “the challenge of demarcating personal and work domains, declining motivation, and feelings of isolation”. This is backed up by hard data. A recent large-scale study by the National Bureau for Economic Research in the US, using data from more than three million workers, finds “significant and durable” increases in length of the average workday since we’ve all been working from home – up 8.2%, or 48.5 minutes.

What to watch for?

First and foremost, it is too early to call. There are some factors which will continue to play out and ultimately determine where we may end up:

  • Capacity to adapt

    It turns out humans are a resilient bunch. Yes, eight hours straight of Zoom is tiring, and it is hard to collaborate online, but we will work out hacks. We will rewire our very adaptable neurones, so beware of building plans through a pre-COVID lens. The longer this drags on, the more structural change and permanent behavioural shifts we will see.

  • The economic kicker

    Many businesses are doing it tough and battling to stay in the game and this can radically change your decision-making parameters. But even when it comes to survival decisions, you can still have hardcore financial objectives with the best outcomes for your customers and your people at the core.

  • Policy and fiscal breath of life

    The cities, states and countries that manage this better will give a major advantage to their local businesses and populations. Firstly, those that better manage the health crisis and minimise the destruction it wreaks will allow businesses and people to bounce back faster and in better shape. And secondly those that manage the recovery and find ways to revive and reinvent their fortunes through policy and interventions that encourage innovation, jobs and investment will have the greatest influence on the future of work and all the resulting impacts for people and place. The virus has the capacity to play out very differently by location so beware a one size fits all approach.

  • Beware unexpected consequences

    If COVID has taught us anything it is to beware the unexpected. This is a vital mantra to take into the future of work and place. One example is illustrative of the possibilities. The statistics suggest that women are more keen to remain working from home in greater numbers which may result in a step backwards for opportunity and progression of women in the workforce. Planning with intent, measuring the changes and recalibrating when the results don’t pan out as intended, will be key.

Leading companies are now looking to the future of work. They are learning from both successes and failures. They are factoring in the financial, economic and government policy implications and how these will impact their future scenarios. We expect to see these leaders spend more time considering the nexus between people, place and productivity. 

Leaders will spend more time considering the nexus between people, place and productivity
Selina Short
EY Oceania Real Estate, Hospitality and Construction Managing Partner

Ways to rethink the people and place

Right now, creative solutions will be required to reconfigure space. As we recently explored with MIT, safe and healthy buildings become table stakes. Quick and inexpensive design hacks – like quiet floors and larger collaboration zones – will allow offices to re-form to meet new requirements without the big capex budgets that most can’t afford.

As commuters are clearly a key pain point, hub and spoke models are also part of the consideration – although this tends to divide the (virtual) room. Spokes in a geographically distributed network could provide the benefits of the office without the headache of the commute. Or it could further splinter people and over-complicate office strategies.

New office developments, designed in response to the rapidly evolving needs of hybrid workers, will have obvious appeal. Expect design to evolve in response to our great realisation: that companies don’t want offices, they want productive workforces.

We are poised on the edge of a new era as we ponder what this means consider three things: 

  • Innovation at scale

    We went into this crisis in a low growth, low productivity environment. The old tricks won’t work. We need to bring innovation to the fore to reinvent business models. If you are an office owner, your greatest competitor is now the home. And your job is now to rethink space and how to create hubs of productivity, innovation and collaboration that are worth getting out of your slippers and tracksuits for.

  • Technology at speed

    Companies are now considering a spectrum of remote working policies, hub and spoke models and agile office strategies. Expect to land in a more multi-optioned world than the one we left; technology will be vital to support this new world. 

  • Humans at centre

    Whether you are recalibrating where work happens, harnessing growth or working out how to survive, people must be at the centre of your decision making or your efforts will wither.

One thing we all need is to take the hard-won lessons from the COVID coliseum and use them to create better places, more connected communities and a productive, prosperous world of work. And that will mean a future that is better than it was in LBC –life before COVID!

Summary

Real estate is poised on the edge of a new era. As we re-examine the nexus between people, place and productivity, new opportunities for tenants and landlords emerge.

About this article

By

Selina Short

EY Oceania Real Estate, Hospitality and Construction Managing Partner

Expert in intelligent buildings and smart cities. Champion of innovation and the strategic importance of cities.