Spoiler alert: this is not another return to the workplace article. We knowjust about every time leaders open their news feeds, there is another headline with some permutation of the words new normal, return to the workplace or future of work. The fact is most organizations have already returned to the workplace in some capacity, and therein lies the opportunity for the year ahead.
What is important for executives to be thinking about, however, is how workplace trends at the micro levelparticularly evolving workstyles and how they enable a hybrid workforceare continuing to impact the macro level. This means not only the physical workplace but, more importantly, the broader real estate and talent footprint. These trends are not simply affecting the size and composition of existing real estate portfolios. Rather, they are also affecting where organizations are thinking about expanding, contracting and rebalancing their leased and owned properties.
We have identified three key challenges organizations are facing across the corporate real estate spectrum. Quality data is the absolute pillar of informed decision-making, yet organizations struggle to aggregate even the most basic information and draw insights from the simplest dimensions of their workforces and workplaces. Layer on new mandates to bring sustainability to the forefront of enterprise operational strategy and add in a mixed economic outlook impacting both the supply and demand of the workforce and workspace, and its easy to understand why so many organizations are still in a holding pattern. As such, the number of published case studies outlining successful footprint rebalancing initiatives have been few and far between.
Looking ahead to 2023, we expect that companies will see their longer-term corporate real estate strategies coming into focus and take steps to react accordingly. Where to begin? Lets start by examining some workstyle trends that will have a cascading effect on the way your organization views the workplace and what that means for your existing portfolio and future real estate footprint.
For many employees, well-being has become not just a priority but a nonnegotiable. There has been a renewed focus on both physical and mental health, and individuals feel empowered to set boundaries with and manage expectations of their employers in ways they hadnt before. The focus on personal well-being includes where and when people work and how people conduct themselves at work. In July, Deloitte asked Americans to reflect on how theyve changed throughout the past year and found that more than 70 percent of respondents said that they are focusing on prioritizing their overall well-being compared to 63 percent the year before.
While employees are focused on their personal wellness, burnout at work remains a major issue. Deloitte research suggests that hybrid work may be a contributing factor. In a recent study surveying women in the workplace by Deloitte, those who changed their working hours during the pandemic were almost three times as likely to feel burned out. The feeling of worker fatigue is impacting a large part of the millennial and Gen Z workforce as well, with 46 percent of Gen Zs and 45 percent of millennials experiencing burnout from their careers.
Data suggests that burnout also extends to executive leadership. Deloittes research found that a majority of employees (57 percent) and most C-Suite executives (70 percent) are considering seeking a job that better supports their well-being. Improving workstyles can mean a lot of things, but ultimately its about providing employees flexibility. For leaders, it means providing flexibility in how, when and where employees work, and providing the guardrails for them to find time throughout the day for well-beingas defined by the individual, not the employer.
Hybrid work continues to evolve and employees are looking for more support. While were well beyond the early days of hybrid work, the policies needed to implement a sustainable model are often missing. Transparent decision-making and clear working guidelines have become a major focus for employees as they operate away from the office. A Deloitte survey found that 58 percent of hybrid-working women felt that they have been excluded from meetings and interactions, and 64 percent said that their employer hasnt set clear guidelines around where and how theyre expected to work. The lack of robust policies anda commitment to mitigation strategies can impact how employees feel about their promotion prospects or how they interact with their teams.
Without question, for many individuals and corporations, hybrid work can promote productivity. But it doesnt come without challenges. Individuals want to see and be seen by leaders, but the workplace must be designed to enable these moments. Meanwhile, organizations want to unlock value from their investments in the workplace, but employees must be present to do so. Executives are taking this challenge seriously. In Deloittes 2022 Fall CEO Survey, 80 percent of CEOs agreed or strongly agreed with the statement that over the next six months, we will develop new tools to drive engagement and loyalty for remote/ hybrid employees that dont depend on co-location. Its not enough to have hybrid work aloneyou need to design hybrid work programs and policies to benefit both the employer and the employee if they are to be sustainable.
As the war for talent continues, what experiences can employers provide to attract and retain employees?
How do companies reconnect employees to a sense of purpose that will keep them engaged?
How has the nature of virtual work changed what employees need for an equitable work experience?
Corporations have the toolsuse them. Employee work styles vary from location to location, reflecting different roles, capabilities and sensibilities. As such, organizations are increasingly focused on accessing accurate, timely and insightful data to understand employee preferences, workstyles and how the workplace and broader footprint should evolve. In a recent Deloitte Dbrief webcast on the future of corporate real estate, Deloitte polled 3,425 participants to ask if they think executives within their organizations have the information necessary today to make informed decisions on the corporate real estate portfolio. Over 48 percent of respondents reported that their organizations were lacking in the availability or quality of data needed to ascertain strategic insights.
Many companies struggle with data quality, aggregation and analysis specifically relating to real-time utilization. While most leading organizations have systems in place to understand the supply side of the equation, the demand side can be a lot harder to gauge. Badging data is imperfect, reservation information may be loosely managed, and cameras and sensors face privacy and general industry adoption challenges, resulting in incomplete and inconsistent views of workplace utilization. Having access to quality utilization data is especially important when evaluating different locations within the same city or region for footprint consolidation initiatives, given that where people work from is less predictable when provided with optionality. For example, is a once-sleepy satellite office now more bustling than the city center headquarters, given the proximity to talent?
Thoughtful investment in the physical workplace is required to keep employees engaged and in the office. Floors of sparsely populated workstations are not a good advertisement for a vibrant and exciting workplace. While thats been the vibe in many offices lately, its about to change. Companies are recommitting to the idea that the workplace plays a significant role in creating connections and fostering collaboration. Deloittes 2023 Commercial Real Estate Outlook reports that 41 percent of real estate CFOs in North America expect that their company will perform a workplace redesign in the next 12 to 18 months, and we can expect a great deal of that investment will be targeted at reducing the amount of individual workstations and providing more places for people to come together for learning and culture building.
Beyond the physical workplace, investment will also be needed to deliver the digital experience. Additional technology infrastructure is required to seamlessly enable connectivity and provide the right environment for a variety of work locations, postures and styles. In Deloittes 2022 Gen Z and Millennial Survey, 20 percent of respondents who have worked remotely said that remote work has made forming connections with colleagues more difficult, and 14 percent said it has made opportunities for mentorship harder to find. This is a big deal, as we know that retaining, rebuilding and redefining corporate cultures in the wake of hybrid work is another challenge we all face.
Part of building a strong culture is through the provision of a differentiated employee experience, and the workplace is often where thats achieved. Executives recognize that the office plays a role in employee satisfaction and retainment. A 2022 Deloitte/CoreNet Global survey on the future of corporate real estate found that the top priority for corporate real estate professionals will be to enhance the employee experience (39 percent) and create positive workplace sentiment. Consumer-like mobile workplace applications enabling individuals to see whats on the menu for the day and where their colleagues have clustered are being deployed to promote connectivity. Providing a variety of furniture configurations to support the multitude of individual and collaborative activities in which we engage in the office also has a major impact on employee engagement and satisfaction. Picture some of the more residential elements we see in office design, such as living-room and dining-room inspired vignettes.
Is our organizations workplace designed to facilitate different types of teaming and collaboration?
What investments are needed to collect and contextualize the right data to make better workplace planning decisions?
Are there additional ways of leveraging technology to blur the lines between the physical and digital workplace experience?
Now is the time to closely review your real estate footprint. Executives are currently examining how employees are adapting to hybrid work and how the real estate portfolio can be optimized. Many corporate real estate leaders are facing the challenge of managing a pre-Covid portfolio that is now oversized. A Deloitte and CoreNet Global 2022 survey found that 75 percent of CRE professionals are likely to change their portfolio size within the next five to eight years, and 47 percent anticipate reducing their footprint. In the near term, decisions about right-sizing the footprint based on actual occupancy data, utilization insights and planned growth trajectories should be a top priority.
Companies are expressing a desire to create flexibility in their portfolios. Revising assigned seating policies and adopting co-working spaces have become popular as executives seek to reduce costs while growth decisions remain in flux. The same 2022 Deloitte/CoreNet Global survey found that a significant majority of corporate real estate professionals anticipate increasing the proportion of amenity and collaboration space (68 percent and 89 percent, respectively), while 67 percent anticipate reducing the proportion of individual space. Space optimization allows for organizations to reduce their fixed commitments without a major hit to the employee experience.
Executives are rethinking their location strategies to take advantage of shifting talent pools. As inflation and economic uncertainty loom large and raise concerns over the cost of living, its no surprise employees are considering or have already made a move. According to Deloitte surveys in 2021 and 2022, a growing percentage of millennials and Gen Zs are reporting that remote work has allowed them to relocate farther away from the office. These trends are having profound impacts on talent pools, suddenly offering employers access to talent at a lower cost while providing employees the flexibility they have come to expect.
As more and more skilled workers gravitate toward areas with lower costs of living, companies are taking note. Executives are looking for ways to access high-quality talent in low-cost environments as the future of the economy remains uncertain. Critical location factors are being revised to think about talent markets that wouldnt have been targeted in the past. With an unprecedented amount of market data available, organizations can broaden their aperture and orient toward areas that best suit their needs. New machine-learning-based tool sets are also playing a significant role by collecting and synthesizing candidate requirements and the ever-expanding global demographic data set to highlight talent markets that may have otherwise been overlooked.
How can excess space be best utilized to enable the right employee experience?
Where does the company need to be in order to attract and retain talent?
What strategies should be considered so that the portfolio can be scaled up/down quickly?
These workstyle, workplace and footprint trends are connected. If you dont understand what your workforce needs, or expects, to be productive, successful and acculturated to your organization regardless of location, you cannot define a set of workplace parameters to meet those needs. If you cant define what the ideal workplace is for your organization, be it the workspace composition, physical design or in-person programming, you cannot successfully determine how much space your organization requiresand in which locationsto be successful.
If that resonates, know youre not alone. In a 2022 Deloitte survey of global real estate CFOs, when asked whether vacancy rates will improve in the next 12 to 18 months, 47 percent responded that they expect levels to either worsenor stay the same, with 53 percent expecting improvement. Executives, feeling uncertain about how to proceed with their own real estate portfolios, routinely ask, What are our competitors doing? rather than embarking on thoughtful and data-driven footprint initiatives. This pause is due to the limited ability most organizations have to access real-time, relevant data about the way their workforce is engaging with the workplace. Often, workplace management systems providing seating capacity data are disconnected from the systems that track occupancy, which are also disconnected from the HR systems indicating which individuals, teams and departments are assigned to a specific campus, building and floor. Organizations must be laser-focused on the questions they are trying to answer so that the required data can be targeted to inform those decisions. Too many companies focus on the quantity, not quality, of portfolio data that impedes consumption and analysis instead of supporting it.
Complicating matters is the need for many organizations to better manage real estate to impact their stated sustainability agendas. Employees are demanding that their employers develop and deliver against sustainability strategies. A 2022 Deloitte survey found that almost two-thirds (65 percent) of business leaders reported feeling pressure from their employees to act on climate change. While green principles span the enterprise, the buildings we occupy, the energy they consume, the waste they produce and the emissions our workforce generates to access them are presenting actionable opportunities to make an impact on carbon emissions. Companies are now treating de-carbonization with equal or greater emphasis as cost reduction when it comes to prioritizing the levers of real estate footprint strategy.
A final consideration is recognizing where we stand today, with the tightest, most competitive talent market in decades. An uncertain economic outlook further clouds organizational decisions about workforce supply and workspace demand. An autumn 2022 Deloitte survey found that 71 percent of CEOs agreed that talent shortages will continue over the next six months. According to Deloittes 2023 Commercial Real Estate Outlook, real estate CFOs are split on whether the cost of capital will worsen (38 percent) or improve (37 percent) over the next 12 to 18 months, and these varying perspectives are manifesting in different footprint strategies. Organizations with vast real estate holdings and head count reductions are accelerating footprint consolidation activities. Conversely, mid- to high-growth companies with more promising economic outlooks see an opportunity to grow their footprint in existing locations and expand to new talent markets.
Today, leading organizations are demonstrating agility by viewing the above pressures as an opportunity, not a challenge, and developing a comprehensive plan that responds to each scenario with a unified strategy. Data and insights from enterprise operations (talent, occupancy, rent expenses, etc.) must be leveraged in concert with sustainability objectives to determine which locations are targets for rebalancingwhether due to the size of a particular office or the role of a specific location in the overall corporate footprint. Landlords, uncertain about the year ahead, are eager to engage.
Ultimately, today is a moment in time. The expectations of our workforce and the workstyles we provide to them will continue to evolve, whether fueled by generational ideologies or external market forces. The implications of our hybrid work strategy and growth (or contraction) of our workforce will continue to inform the mission and meaning of the workplace. The migration and evolution of talent pools and the scale of our workplace needs will continue to challenge leaders to think about where and how much office space is required to best support the workforce.
The new normal is no longer new. Weve returned to the workplace. The future of work is being created every day. Lets start delivering a differentiated employee experienceone that puts the workforce at the center of our workplace strategy. Lets start leveraging workplace technology and data to drive informed and impactful decisions about our portfolios. Lets start adopting workplace policies that balance the needs of employees and employers and define when and where people work. Lets start embracing the possibilities of hybrid work and take action to optimize the corporate real estate footprint as it should have been all along.
View post:
Creating Connections - Chief Executive
- Hamlin Bank and Trust Co. celebrates opening of St. Marys location - St. Marys Daily Press - May 19th, 2024
- Shreve & Co. closing Union Square location after over 170 years - NBC Bay Area - May 19th, 2024
- Data Center Colocation Market Worth USD 58.4 Billion to 2031 - Exclusive Report by InsightAce Analytic Pvt. Ltd. - PR Newswire - May 19th, 2024
- HighGrain Brewing Co. will open second location in Springfield Township - WLWT Cincinnati - May 8th, 2024
- Why companies are turning to colocation now more than ever - DatacenterDynamics - May 8th, 2024
- Garsnett Beacon Candle Co. to open Saugatuck location Thursday - HollandSentinel.com - May 8th, 2024
- Solar, wind and storage co-location: Electricity cost reduction - Energy Live News - Energy Made Easy - April 24th, 2024
- Window and door company JELD-WEN to close Rusk Co. location, affecting over 300 jobs - WSAW - April 14th, 2024
- NHS Trust 'over-egged' think tank's support for new cancer centre - Nation.Cymru - April 6th, 2024
- Single-cell and spatial analyses revealed the co-location of cancer stem cells and SPP1+ macrophage in hypoxic ... - Nature.com - March 28th, 2024
- Data Center Colocation Market size is set to grow by USD 66.57 bn from 2024-2028, American Tower Corp., AT and T ... - PR Newswire - March 28th, 2024
- Mighty Squirrel Brewing Co. is opening a Fenway location this week - The Boston Globe - March 20th, 2024
- Fastrack Technology's three keys to making the most of colocation - IT Brief Australia - March 20th, 2024
- Co-location agreement between the EU Delegation and Spain - EEAS - March 20th, 2024
- Browns Doughnut And Pastry Co. Opening Second Location In Bucks - Patch - March 12th, 2024
- Where District 5 Board of Education candidates stand on the charter school co-location issue - The Eastsider - March 4th, 2024
- Data Center Colocation Market to Reach $46.30 Billion by 2028, More than 5,175.6 MW Power Capacity to be Added in ... - Yahoo Finance - March 4th, 2024
- Rittal Announces Colocation Rack Initiative to Meet the Growing Demand for Colocation Market - PR Newswire - March 4th, 2024
- Sheetz to host grand opening of new Montgomery Co. location - WHIO - February 22nd, 2024
- Sheetz to host grand opening of new Montgomery Co. location - Yahoo News - February 22nd, 2024
- Pasta Supply Co. is opening a second SF location in the Mission - San Francisco Chronicle - February 22nd, 2024
- Educators and Families Win Limits on Co-Location - United Teachers Los Angeles - UTLA - February 22nd, 2024
- Co-working members' club The Malin opens wood-filled Nashville location - Dezeen - February 22nd, 2024
- Poplar Avenue retail location of Whimsy Cookie Co. closed; property to be demolished - Memphis Business Journal - The Business Journals - February 11th, 2024
- Data Center Colocation Market projected to hit USD 178.7 billion at a 15.3% CAGR by 2030 according to a new... - WhaTech - February 3rd, 2024
- Singapore Data Center Colocation Market: from US$ 1,543.9 Mn in 2021 to US$ 3,586.2 Mn by 2027 according to... - WhaTech Technology and Markets News - January 25th, 2024
- Simmtech preparing for another colocation investment with Micron: CEO Chun - Business Standard - January 13th, 2024
- Brunswick Co. Utility Billing moves to new location - WECT - January 5th, 2024
- USD 202.71 Billion Colocation Market to Reach By 2030 at CAGR of 15.7%, Current Trends and Growth Analysis - EIN News - December 18th, 2023
- Data Centre Colocation Market is expected to reach US$ 279.1 billion by 2034, rising at a 14.9% CAGR | Future Market ... - Yahoo Finance - December 18th, 2023
- The forest beside the clear-cut - CBC.ca - December 10th, 2023
- Coffee Co. announces grand opening of 5th Central Pennsylvania location - ABC27 - December 10th, 2023
- Permit to relocate Line 5 in Straits of Mackinac approved with conditions - WILX - December 2nd, 2023
- Offshore Wind and CCS Colocation Forum commissions vital ... - The Crown Estate - December 2nd, 2023
- TDS hosts grand opening for West Bend location - Greater Milwaukee Today | GMToday.com - December 2nd, 2023
- Danville Brewing Co. To Open 2nd Location, Biergarten In Pleasanton - Patch - December 2nd, 2023
- Drug Supplier Sentenced to 14 Years in Federal Prison - Department of Justice - December 2nd, 2023
- Big changes to 'Best of BMO' top analyst stock picks - The Globe and Mail - December 2nd, 2023
- Violent Boston Gang Member Who Posed with Firearms on ... - Department of Justice - December 2nd, 2023
- As One Clovis Brewer Pulls Back, Another Fills the Space - gvwire.com - December 2nd, 2023
- Colombian National Extradited from Colombia to the United States ... - Department of Justice - December 2nd, 2023
- More than 8,300 wreaths to be placed on veterans' graves at Louisville cemetery this holiday season - WHAS11.com - December 2nd, 2023
- Domestic violence prevention and recovery hub launches in the South - Premier of South Australia - December 2nd, 2023
- Caribou Coffee Brookfield location opens today | Waukesha Co ... - Greater Milwaukee Today | GMToday.com - December 2nd, 2023
- Sacramento's New Helvetia Brewing Co. wants to turn into a community and employee-owned co-op - KCRA Sacramento - December 2nd, 2023
- Roofing plant breaks ground in Bryan - KBTX - December 2nd, 2023
- The Rise of the Meta City - HBR.org Daily - December 2nd, 2023
- Prime IV Hydration & Wellness to Debut in Connecticut with Latest ... - Club Industry - December 2nd, 2023
- "Adaptavate Wants To Lead The Carbon Revolution And Enable ... - Carbon Herald - December 2nd, 2023
- Portland's departing health director is proud of the work she's done - Press Herald - December 2nd, 2023
- Hut 8 and USBTC Announce Completion of Business Combination - GlobeNewswire - December 2nd, 2023
- BT Group Newsroom BT partners with Digital Realty to help ... - BT newsroom - December 2nd, 2023
- Kevin Nerwinski: There's a lot going on in Lawrence Township - Community News - December 2nd, 2023
- Closing the feedback-feeding loop of the radio galaxy 3C 84 - Nature.com - December 2nd, 2023
- InterSystems cloud integration service comes to NZ and more briefs - Healthcare IT News - November 24th, 2023
- Lowndes Co. Feed the City serves over 500 people - WALB - November 24th, 2023
- Rogers brings three proposed towers to HE | The Highlander - The Highlander Newspaper - November 24th, 2023
- Safe Centre of Peel opening second location to support survivors of ... - pentictonherald.ca - November 24th, 2023
- WOMEN EMPOWERMENT AND BUSINESS MATCHING AT ... - PR Newswire - November 24th, 2023
- Gov. Andy Beshear announces Build-Ready location in Rowan Co. - WYMT - November 24th, 2023
- Vertiv expands African workforce as business grows - ITWeb - November 24th, 2023
- Treasury Releases a Swath of Guidance on the Investment Tax Credit - JD Supra - November 24th, 2023
- The Hard Bean Brunch Co. opens its second location in Langley ... - Daily Hive - November 24th, 2023
- How the White House's AI Executive Order could increase U.S. ... - Brookings Institution - November 24th, 2023
- 7,000 veterans buried at Louisville cemetery may not have a wreath this holiday season. How you can help. - WHAS11.com - November 24th, 2023
- An equation co-written with AI reveals monster rogue waves form all the time - Popular Science - November 24th, 2023
- Supporting Yorkshire: Why I&L space development is crucial for ... - The Business Desk - November 24th, 2023
- Former UKFast founder and CEO found guilty of rape in Manchester ... - CRN UK - November 24th, 2023
- UPDATE: NH DHHS Advises Consumers of Expanded Wilcox Ice ... - New Hampshire Department of Health and Human Services - November 24th, 2023
- How CBI Bungled Up The NSE Scam Probe - BW Businessworld - November 24th, 2023
- Experts shed light on how autism affects the diagnosis, treatment of ... - News-Medical.Net - November 24th, 2023
- Q&A: New report examines myths hampering advancement of women in workplace, actual barriers and possible solutions - Phys.org - November 24th, 2023
- Factory evacuated due to building fire in Witherlea, Marlborough - Stuff.co.nz - November 24th, 2023
- After 78 years in business, Curry Ace Hardware is acquired by ... - The Patriot Ledger - November 24th, 2023
- Travis Kelce: Chipotle renames Kansas City location to honor Chiefs star's 2011 misspelled tweet, after the hi - Daily Mail - November 24th, 2023
- A spotlight on the winners of Yelp's Veteran Business Fund - Yelp Blog - November 24th, 2023
- #OTGYpsi: Ypsilanti proves to be an attractive location for new ... - WEMU - November 24th, 2023
- Randi Weingarten's Not-So-Dandy Year The Heartland Institute - The Heartland Institute - November 24th, 2023
- The Secret Locations Of Bhutan's Royal Bitcoin Mines - Forbes - November 24th, 2023
- Pushing The Limits Of HPC And AI Is Becoming A Sustainability ... - The Next Platform - November 24th, 2023