Importance of Workplace Strategy

"Workplace strategy" has become a high-profile part of the conversation around business; talent and the broader economy—a conversation often driven by headlines focused on "place".

04 Jul 2018

By Anshuman Magazine

Importance of Workplace Strategy
"Workplace strategy" has become an integral part of the conversation around business; talent and the broader economy — a conversation often driven by headlines focused on "place" (think cool, alternative office environments and talent-grabbing amenities). These modern workplaces are featured on TV shows and style blogs, and are helping redefine the traditional view of a cubicle-filled workplace. However, while being wowed by these undeniably cool office environments, we can overlook the "work" and "strategy" ingredients that comprise the concept of workplace strategy.

But for the executives who manage workplace environments for some of the largest and most successful companies in the world, arrive at "place" only after they have also thoughtfully considered the other ingredients of the term—"work" and "strategy." This discipline comes from the fact that those in the C-suite are expecting great outcomes from the workplace investments they are making.

As per CBRE’s APAC Occupier Survey, the drivers of workplace strategy are changing. The survey found that better collaboration with customers, colleagues and coworkers is now the key reason behind implementing workplace strategy (58%), closely followed by cost savings (53%). The emphasis on increasing employee productivity (47%) is also driving the development of workplace strategy. Space efficiency was identified as the most popular initiative to reduce occupancy costs (55% of respondents), closely followed by lease negotiation (40%). Increased scrutiny of CAPEX and fit out costs means that the previously popular strategy of relocation to decentralized or emerging areas may have lost some of its appeal as a cost-saving measure, and was highlighted by only 23% of respondents.

With rapidly changing workforce aided by technology, we at CBRE recognize that most buildings in the market support a traditional approach to work. It is thus, very critical to look at a truly tenant-focused, consistent and GLOBAL platform for measuring and comparing office buildings – both for tenants seeking their "best fit" building and landlords seeking to highlight competitive advantage.

"Today’s corporate real estate executive must balance new workforce desires with a realistic workplace strategy that brings talent and expense management into simultaneous focus," according to the CBRE US Occupier Survey report. So even if the "place" grabs all the headlines, a disciplined approach is required to balance multiple objectives and deliver the exceptional outcomes C-suites are demanding.

Many multinationals initially implemented workplace strategy as a means to improve space utilization with the aim of reducing costs. However, this way of thinking is now changing, as more companies look to strike a balance between reducing costs, improving productivity and enhancing the overall work experience for employees.

With employee satisfaction as one of the key factors for evaluating business performance, workplaces are increasingly offering a wide range of amenities to enhance performance and improve employee retention. Accessibility, provision of facilities and services, indoor environmental quality and flexible working are rated as some of the most important factors to employees.

Recent Trends
An increasing number of offices today have fewer and smaller individual workspaces, where a greater proportion of space is dedicated to interactive uses. There is also a growing trend towards optimizing space for collaboration at formal meetings, as well as during interactions in common spaces (corridors and cafeteria, for instance). This trend is increasingly being reflected in new office space designs. Companies are adopting more open plan seating and collaborative spaces, which mean less of cubicles, more of open plan seating designs. Majority of office space design has slowly moved from a rigid floor plan to one facilitating an open plan seating arrangement. Over the past decade or so, the share of cubicle spaces in the overall floor plan of a typical office has reduced from a high of 23–25% to just about 5% today.

Consequently, ‘open plan seating’, which was merely about 25% of the floor plan earlier, has now increased to 45–50% today. Additionally, it has been observed that the share of open floor seating arrangements vary across sizes of floor plates and type of office function.
Over the past few years, most of the companies have also started to embrace employees’ needs for a greater work–life balance in an attempt to boost satisfaction, productivity, and retention. Trendy cafeteria and lounge areas have replaced the rigid, closed layouts of the past. This has led to an increase in space allocation towards recreational areas, cafeteria, and lounges, which are currently estimated to occupy 7% of office space, compared to 2% or even lesser a decade back.

Translating business needs into the right workplace solutions is important work. Corporate real estate executives are always working through a variety of real estate and business strategy filters and questions.

For example, many leading companies are opting for hybrid spaces that afford 10 or more distinct working environments — some open, some private — in the same facility. This allows workers to choose the type of space that works for them, based on the type of work they are doing at different points throughout the day. The flexible nature of these environments mean that the company’s workload — and workforce — can expand and contract without requiring precise predictions about who needs what size of office at which corner of the floor on a moment’s notice.

One organization’s plan to win will not be another’s. Flexible, activity-based work environments may be just the ticket for one company, while well-appointed, traditional offices may still be the winning formula for another. What matters is each company’s unique strategy, its plan to win, and how that plan translates into the approach to talent, market presence and workplace environments.