Shaping the future of work – The office ecosystem and hybrid work
To navigate the future of work, organizations will need to be agile to adapt to changing conditions throughout 2021 and beyond. In this two-part series, JLL's Bryan Froud takes us through the four foundational truths the company believe can help guide a return to the office and navigate what might be a long, complex and demanding future of work transformation journey.
In the history of work, the pandemic of 2020-2021 will be viewed as a turning point. Historical patterns of work, worker behavior and workplace engagement that had evolved over decades were disrupted and transformed and irrevocably shifted into a new direction. Offices hold a starring role in the future of work as they attract talent and help define and exemplify company brand and purpose.
The early 2020’s will be marked as a defining period where a confluence and intensification of trends – the importance of the worker, healthier living and working, social and community responsibility, sustainability and environmentalism, the advance of technology, and now health security – forever changed the nature of work, triggered by a global health crisis and the massive structural societal shifts it caused. McKinsey argues that “the physical dimension of work is a new factor shaping the future of the work, brought to the fore by health and safety considerations”.
Truth 1 – The office remains the center of the work ecosystem
A physical office reinforces culture, drives collaboration and innovation, enables professional growth, and brings a company’s best to its clients and employees. No wonder that our 2021 JLL Workforce Preferences Barometer survey of 3,300 office workers found that 79% of the workforce aspire to be back in the office at least once a week (see Figure 2). Great office environments attract talent; bring a brand to life; provide a social outlet; connect new employees to company culture; drive employee engagement and affinity; and encourage spontaneous interactions and informal networking. The physical office provides a link to that sought-after connectivity and culture. Done correctly, collaborative and purposeful offices add extra enterprise value as social and innovation hubs.
Companies have learned rapidly about their capacity to be agile and flexible, as well as the need to be resilient, during the health crisis, and have adapted to the new rules and conditions of work. And new work styles and methods of sharing and collaborating have developed quickly to attain mass familiarity and become mainstream. The vast global ‘pivot’ to distributed collaboration and cloud-based work processes and work activities via remote work and distributed cloud technology work platforms is well under way and proving to be effective and successful. Most notably, the extreme resilience of the workforce during the pandemic has been brought sharply into focus. Its ability and agreeability to be adaptable and to maintain (and in many cases increase) productivity and performance in unusual and testing circumstances has been fundamental to the resilience of most businesses. However, many workers are feeling burned out and anxious about their future, and it is starting to impact performance.
We can now see signs of work-from-home fatigue. According to our study, nearly half of employees are exhausted, feeling overwhelmed (49%) and under pressure (48%) (see Figure 3). In addition, 61% of the workforce are also craving ‘real’ human interactions with colleagues. Flexibility is becoming more and more attractive. We found that 63% of the workforce want to keep the possibility to alternate between different places of work in the future. Employees also want more certainty from their employers about what lies ahead, and they are demanding and expecting a greater equity in the new world of work. Of those employees surveyed, 55% want to be in places that can innovate and adapt to future crises. The future of work is likely to become increasingly worker-centric and might be tagged ‘the Golden Age of the Worker’ as human experience and human performance takes center stage.
As we reach the post-pandemic early stages of a return to normalcy – or what might be termed ‘a new normal’ – remote work is fully accepted and operational at a large scale, and leaders and managers have a new mindset and have stepped up and adapted to virtual management. Our study found that 88% of the workforce would like more flexible working hours in the future, compared with 71% a year ago. McKinsey argues that “COVID‑19 has highlighted the importance of physical proximity as a factor shaping the future of work”. The workforce has demonstrated that it is capable of collaborating remotely through advanced collaboration platforms, and businesses have shifted their cultures to embrace full remote-work operations as a model of resilience through hybrid work – a mix of in-office, at home and/or third-party work.
A hybrid workplace describes an organizational business model that accommodates flexibility for the workforce to be physically present in a corporate office or to work remotely (from home−or third places− all enabled by technology). As the definition of the workplace changes, organizations will need to rethink the support services needed to empower people to do their best work regardless of location. The workplace is changing from being a single location (the office) to a network of locations (the office, the remote including flex spaces, and the virtual).
Truth 2 – Hybrid work has a durable presence
Most companies already embraced mobility or flexibility ahead of the pandemic. Hybrid models have typically been the starting point for return-to-office, ahead of local guidelines allowing for full capacity. Some recent employee surveys suggest employees want to spend less time working from offices than in the past, while many CEOs expect their employees to be back in the office with increasing regularity. This is a gap – sentiment will continue to fluctuate, and data on this topic is evolving. Flexible work and hybrid office environments provide greater employee workplace choice, but fully remote models are unlikely to satisfy all needs and styles. Whatever “hybrid” means in the future, we believe offices will become more tech-enabled to inspire employees and customers who occupy them, and to reach and connect remote or hybrid workers seamlessly. According to our survey, 63% of the workforce is ready to switch to a hybrid way of working, mixing different work locations, while 8% want to work exclusively at home and 26% exclusively from the office.
Shifting priorities and striving for a better world
The corporate occupier world is therefore in a transition phase, where companies need to listen to and lean into workforce preferences and address the long-term coexistence of their business with the virus and its consequences. Progress with the vaccination is strong and a return to the office and to a large degree of ‘freedom’ are expected, but not to the way that things were before the pandemic. It has taken 30 years and major disruptions through multiple crisis for the future of work to arrive.
It is clear that few organizations will return to prepandemic ways of working. The trends that have reached mass adoption years ahead of schedule have not only proven themselves to be better for business and workers, but also good for society and the environment.
Another certainty is that the impacts of the pandemic will live with us for many years, as will the new ‘learning culture’ and ‘learning mindset’ that organizations have adopted. 2020 was a step change in work’s evolution forced by the mass-scale adoption of remote working. Boston Consulting Group asserts that “Covid-19 is hastening the transition to on-demand workforce models” forcing companies to “remake their culture, rethink the employee value proposition, redefine work into discrete components, reassess capabilities within the organization, and rewire organizational policies and processes”. Author Akhtar Badshahx contends that ‘purpose mindset’ is the light to overcome this extraordinary pandemic year.
The most vocal about the need to transform the organizational mindset is Satya Nadella, CEO of Microsoft, who recently stated that “anything is possible for a company when its culture is about listening, learning and harnessing individual passions and talents to the company’s mission.” One Fortune 500 corporate client of JLL shared that they will use the learnings of their global remote work experience to evolve how they work in order to build the business and increase productivity while strengthening an agile, empowered and accountable culture through a ‘growth’ mindset.
Markedly, large tech companies are eager to return to the office. IBM expects 80% of the workforce to be in the office at least three days a week. Amazon has announced that its plan is to return to an office centric culture as their baseline, as it believes it will enable them to invent, collaborate, and learn together most effectively. Some of the loudest voices in the corporate world are “rallying to get employees back in offices”, particularly within the finance industry, and are suggesting “the long-term role of remote work has been overstated”. The corporate mindset will need to shift and mature to accompany the transformation around hybrid work.
On a societal level, the pandemic has magnified and accelerated how new ways of working can enable better outcomes The need for a healthier, fairer and more sustainable world with responsible and caring communities, businesses and governments will only gain greater momentum. This will be driven by changing social and economic values among younger generations (X, Y and Z) and their demands for greater environmental and social justice and a redressing of inequities and inequalities. Consumers, investors and employees will want greater change and all of these stakeholders will become much more demanding of corporate as well as governmental efforts to build ‘a better world of work’.