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The “traditional office” is at a turning point. Who is right about how the future of work will look?
During the C19 lockdowns we watched the tide go well and truly out on the traditional culture of work. Overnight, commentators looked into their crystal balls for quick and catchy answers on how the office and housing market would react and … eventually, these reflections began to feel trite and premature and we all succumbed futurology-fatigue.
Most organisations did whatever they could to weather the storm, choosing to play the mood by ear and remain flexible and open to finding new ways of working. Now as we enter spring 2023 after the dust has settled and the economy attempts once again to normalise in the aftershock of Covid/Brexit/War in Ukraine, we are seeing divergent camps emerge with radically different views on the future of work.
I have found recently that the answer to the question “what is the future of workplace design?”, depends very much on whom you ask. When I speak to our workplace sector clients, they have an unwavering belief in the enduring appeal and value of high-quality in-person work environments. Conversely, when I speak to our housing sector clients, they are preparing for widespread home-working; a desire for less commuting, more pets, more access to garden space and localised co-working on premises, or nearby. At the same time companies are experimenting with the 4 day working week model, an idea that would’ve been inconceivable a couple of years ago but is swiftly becoming mainstream.
While the contractions abound, I have become intrigued by the idea that all of these outcomes while appearing at odds could instead be true at the same time, representing a wider and more permanent shift towards an autonomous, wellbeing-centric workplace culture that will be good for both workers and employers in the longer term.
Office-led developers were buoyed in February by news that from early May, Big Tech leaders Amazon would be returning to in-person work for a mandated 3 days per week as a minimum. CEO Andy Jassy wrote a memo to the organisations office workers, outlining the benefits of being in person — here is the TLDR (quote):
“1 — It’s easier to learn, model, practice, and strengthen our culture when we’re in the office together.
2 — Collaborating and inventing is easier and more effective when we’re in person.
3 — When you’re in-person, people tend to be more engaged, observant, and attuned to what’s happening in the meetings and the cultural clues being communicated.
4 — Learning from one another is easier in-person.
5 — Teams tend to be better connected to one another when they see each other in person more frequently.”
Andy Jassy, CEO Amazon
I particularly liked this line from the memo: “Invention is often sloppy. It wanders and meanders and marinates” because it accords so closely with our experience as a design studio. This points to the core value proposition of the office; it isn’t a place for desks, screens and chairs (although they’re certainly useful), you can have these at home.
The office is fundamentally a piece of essential business infrastructure that drives invention, productivity, wellbeing and quality outputs. When tenants sign a new lease on a floorplate this is what they are signing up for and this is what designers have to focus on when we create future workplaces. Physical offices give an organisation the ability to out-compete on ideas and culture. Without them they may make some short term saving on rent, but they are taking a long term gamble on staying competitive.
The deep introspection of the lockdowns was followed closely by the so-called “Great Resignation” of late 2021. But since then, a rising interest rate environment has proven hostile to “growth-orientated” companies and has caused them to change tack, flipping from an unprecedented hiring boom to laying off 128,000 workers in 2023 alone. This is significant to workplace, because SNP500 profile companies with international presence tend to be the kind of idealised tenant that are targeted for high quality city centre offices. Elon Musk, an increasingly divisive global tech leader announced 10% job cuts in mid-2022, but — and this is important — at the same time he has been outspoken on the merits of in-person working and highly critical of remote work. Musks’ ruthlessness in finding efficiencies at Space X, then Tesla and finally at Twitter during the turmoil then provided cloud-cover for other leading tech companies to do the same thing more quietly.
One could jump to the conclusion that less people will automatically mean less demand for office space, but that probably overlooks how these kind of leaders think and ultimately they make the final decisions on premises. Facebook this week announced that 2023 would be their “year of efficiency” and dedicated a whole section of the statement to “in-person” working:
“In-person time helps build relationships and get more done. Our early analysis of performance data suggests that engineers who either joined Meta in-person and then transferred to remote or remained in-person performed better on average than people who joined remotely. This analysis also shows that engineers earlier in their career perform better on average when they work in-person with teammates at least three days a week. ”
Mark Zuckerburg, CEO Facebook Meta
Much of the work done at tech firms like Meta is very cerebral in nature, requiring long spells of focused coding work — exactly the kind of work people claim is best suited to home-working and yet here the CEO is arguing that this too is best done in person. Anecdotally we have spoken to clients thinking about alternative target occupiers who’s business model more concretely would rely on physical presence; companies with more “discursive” business models, like agency, marketing, law and other service based industries that could stand to gain more from an in-person working culture. This quote suggests that even if this re-focus were to happen, there will remain a latent demand from leading companies we were led to believe would shift more to remote.
Peoples’ opinions on the in-person vs remote vs hybrid argument often correlate to their stage in life and their previous life experiences; it’s likely that your perception of relative productivity and wellbeing versus your peers is highly connected to nuances of your personality and also on the nature of the task at hand which can vary substantially by role and career stage.
Decision making on leasing premises and routines for the working week come from the top of organisations, from leaders who are usually older and have a more rigid picture in their minds about workplace ideals, based on their own back story. At the same time, a growing proportion of innovation, cultural intelligence and technical know-how will (increasingly) be coming from the younger generation who are graduating now and will become the future leaders. The workplace will change as our demographics change over the next decade, when millennials will represent a greater proportion of leaders and Gen Z will represent the bulk of new and established members of the workforce.
The traditional case in favour for remote working goes something like this:
And in London at least, that is happening and we are seeing high uptake in rates (see recent report from ONS) for hybrid work concentrated in the higher income bands:
“28% reported both working from home and travelling to work over the period September 2022 to January 2023. Workers in the highest income band, those who were educated to degree level or above, and those in professional occupations were most likely to report home only or hybrid working.”
Cost savings loom large in these justifications and the cost of living crisis has impacted lower-paid workers worst of all and they tend to be more junior and younger. The latest headlines from tech-leaders like Musk who decry the sticky trends in remote work, contrast strongly with anecdotes from workers on the ground and there exists a tension between top-down decision making about premises and bottom-up feelings about what is best for people. This precarious misalignment is one that can only be managed by holding onto some semblance of flexibility in the form of hybrid working, which allows teams to benefit from being both in person and, sometimes — remote. This article from the World Economic Forum discusses generational differences in workplace expectations:
“Competitive pay isn’t enough. Generation Z also want flexibility … The oldest entered the workforce during COVID-19 lockdowns. They grew accustomed to remote work that allowed them to meet friends or grab a yoga class between Zoom calls. They’re unwilling to give up that freedom. The vast majority — 85% — want to work fully remote or hybrid and they say they’ll leave companies that don’t offer those options. As one 22-year-old said: “I would never, ever want to work a nine-to-five job in a little cubby cubicle… I love the flexibility of being home.””
As well as a desire for flexibility, Gen Z is likely to be mostly priced out of the housing market as they reach typical house buying age due to the growing disparity between income levels and minimum mortgage deposits. This changes the dynamics around traditional career expectations of job security and the time horizon on decision making about where to work, people may increasingly think more short term about their enjoyment.
How will occupiers deciding on premises in the next 5–10 years reconcile such divergent opinions? Given the extremes, it’s unlikely that the mainstream will view it as a binary decision; that on the one hand they could embrace greater worker flexibility meaning reduced overall physical space and capital expenditure, or on the other hand doubling down on the benefits of “in person” working culture and investing in better work environments that will retain talent over the long term.
There will be edge cases, but what intuitively feels most likely is that the middle of the bell curve will seek a balance point that can temper both extremes, providing people with an inclusive working policy that keeps them content and productive but makes sure they have a mission-led physical space at the heart of the organisation that allows people to be together regularly, a space that will engender learning, collaboration and social interaction — and that I think for most will mean “hybrid with in-person mandates”.
Mary Barra has called this method ‘working appropriately’ and it is an employee-centric model, where leaders put trust in their teams and allow them to work in an autonomous way that suits them.
“The learnings and successes of the last year led us to introduce how we will manage the future of work at GM, called “Work Appropriately.” This means that where the work permits, employees have the flexibility to work where they can have the greatest impact on achieving our goals. The notion behind this approach — that our employees are capable of making smart decisions without overly prescriptive guidance”
Mary Barra, CEO General Motors.
Many have been hedging their bets during the pandemic and recovery, maintaining the same level of physical space and expenditure and working in hybrid mode, but they will soon approach a crunch moment where they must make a more permanent decision as leases run out. Suppose a company hasn’t grown overall during their current lease period, what are the chances they decide to stick with the exact same space that they had before?
Ultimately the decision will likely come down to doing whatever maximises the ability to compete on productivity and creativity combined. At a minimum they will want to substantially reconfigure their physical environment for this new mode: for example, less desks more amenity/wellbeing space. At a maximum, they may want efficiently planned space,, but with higher impact spaces where they can host events; providing better wellbeing / fitness facilities and quality of spaces that give employees a feeling that they are ‘missing out’ by staying at home.
The city is gradually waking from a long slumber and people are remembering why they liked them in the first place. A vibrant workplace sector is a living and breathing part of a healthy city and the emergent trend of “hybrid with 3 day minimum mandates” feels like a good fit for the dominant mode of future work. The market is in the process of adapting to this change and this transition has caused lingering uncertainty, but as leases expire, organisations will have to make very consequential decisions about their future. Making this choice can be good for employees and employers alike.
In order to build for this future, the workplace needs to augment. It needs to be seen as a place that is a “vacation from home”, one that people willing to travel for, because it enhances their working life; for a rewarding worklife, for better mental health, for friendship, for mentorship and (importantly for the next generation) to facilitate career progression. When we design workplaces, we need to imagine places where people will feel a sense of ‘FOMO’ when they stay at home.
With this in mind, we may expect organisations to gradually trend back towards in-person work, but under a new, more flexible culture. Occupiers can choose to embrace both the individual flexibility that is permitted by hybrid working and cloud computing, but will also maintain a focus on the long-term benefits of structuring organisations around in-person work environments.
Here is a sense of what such a change would mean for workplace design:
I have begun to think that Generative Design was waiting for Generative AI to come along to really find a place in the mainstream.
