The office has never been more important. And it is millennials – the twenty and thirty-somethings – who are dictating how, where and when we work.
Not only are they now the largest segment of the workforce, according to professional services firm Deloitte they will make up 75 per cent of the global workforce by 2025. As such they are rewriting the rule book.
Any employer who fails to take note of the needs of this generation, which has never known life without the internet or a smartphone and has very different expectations about work, will fail to compete.
So while in the short term the London office market is being influenced by Brexit fears, rising rents, low vacancy rates, economic uncertainty, nearshoring and offshoring, employers need to keep their eye on the future.
That is why more than nine in ten UK human resources and business leaders see redesigning their organisation as their most important priority, according to Deloitte’s Global Human Capital Trends 2016 Survey.
It is not just about efficiencies and productivity, but meeting the varying expectations and working styles of different generational groups, and the need to cater to the employee in an increasingly competitive marketplace.
The workplace is central to this. Millennials have different values. Three in ten would even accept a 10 per cent reduction in their reward package to work somewhere that had their ideal features, according to British Land research.
This is partly because the lines between work and social are increasingly being blurred, which has more to do with the residential property market than the office market.
“Much has been made of flexible and home-working, which is ideal if you have a nice, quiet home to work from,” says Mat Oakley, research director of Savills. “So while two days’ working from home might cater to the needs of the more mature worker, what about the 24 year old sharing a flat with four other people who only has a small bedroom to work from?
“Employers have to meet the needs of ‘generation rent’ and also prepare for the fact that with residential rents rising faster than productivity, this is likely to impact on their ability to retain these millennials. If they need to earn more to pay their rent, they will move to a better-paid job.”
Keeping up with millennials
Office workers are not the only ones who are more nomadic, businesses are too.
“The geographical boundaries of London no longer apply. You can find media in London Bridge and advertising on the South Bank. And while moving premises can lead to significant savings, it is less about property costs, which might only be 15 per cent of a business’s overheads, and more about moving to the right premises and where the talent wants to be,” adds Mr Oakley.
As these younger workers spend more time in and around the office, although not necessarily working, the office becomes more important. For the one in seven working for themselves, the same is true, as Olly Olsen, chief executive of The Office Group, points out: “Just because you work for yourself, does not mean you want to work by yourself.”
Matthew Bonning-Snook, a director at property developer Helical Bar, says: “Buildings have to be refurbished more often to keep up with the needs of millennials, whether that is showers and bicycle storage or healthy eating options, fitness and more open spaces. They want the office to have more of a buzz and mixed-use offers this provided there are collaborative areas – and, of course, good coffee.”
As such the office is increasingly seen as a destination, rather than just somewhere to work.
“It is no longer just about offering the right working environment. Businesses want to attract and retain talent by focusing on health and wellbeing, catering to the needs of employees not just in the office with natural light, showers, open spaces and everything that employees increasingly expect,” says Kaela Fenn-Smith, London head of commercial at Land Securities, the UK’s largest commercial property company.
“It’s also about what’s on offer out of the office with amenities that everyone wants close by, from great food and retail, to somewhere to sit on a sunny day.”
Matthew Turner, head of marketing at Regus UK, adds: “Workspaces are becoming more of an experience, and one that people want to enjoy for the social aspects as much as the networking, where the blend between work and home is blurred, and where you can work collaboratively and eat and meet with other people – more of a club.”
But the last word has to go to the millennials. They think offices need to work harder, according to British Land, with 98 per cent of London office workers in this age group saying communal working areas are important, even more than location, but they are not always good enough.
In addition, 90 per cent want an “overall buzz” in their office location, and 84 per cent say that outdoor areas and gardens are also desirable.
It seems that in the office of the future, desks hardly figure on the list of wants and desires. But then, will anyone “own” a desk in future?