SummaryJan, 2019

The purpose of the office is changing. No longer simply a place where people go, a company’s workplace can be a means for employers to differentiate themselves to attract and retain top talent, and drive business growth in the context of a UK productivity crisis. Despite a rise in remote working, the trend is not all-conquering, with workplace innovations suggesting a bright future for the office. And, while the drive for ‘cool’ offices has been sparked by trendy tech giants, businesses don’t need huge budgets to reap the benefits of an inspirational office. The Future Workspace report explores how companies can harness innovative office design to boost face-to-face collaboration, drive creativity and, ultimately, grow their business.

In this report

Inspirational leadership is the key to a productive workplace

In these uncertain times, inspirational, trusted and consistent leadership is critical – whether in politics or business 

Turn your office into an exceptional workplace. Head to www.area.co.uk to learn more.

With Brexit looming, the need for British organisations to improve already sluggish levels of productivity will increase. The pressure is truly on to find ways of improving performance in our workplaces, and we believe leadership holds the key.

The Puzzle of Productivity: What enhances workplace performance?, a report published in November 2018 by Area and our partners, The United Workplace and Worktech Academy, reveals the quality of leadership overwhelmingly affects the level of productivity in a company. Indeed, over half (53 per cent) of the 120 major organisations surveyed around the world named leadership as the most important factor in boosting performance.

Fewer than a fifth of respondents named environment (18 per cent), wellness (14 per cent), and technology (13 per cent) as being the most important factor. What’s clear from our research and interviews is that while leadership is conclusively regarded as a dominant factor in raising performance, not enough attention is paid to it by those of us involved in creating workplaces.

If people feel supported and handed the chance to shape the organisation’s culture, they are immediately more motivated and productive

Today’s leaders need a greater appreciation of the impact of an effective workplace, and its fusion of physical environment with technology and people. Leaders have the power to make or break a company’s culture, and their commitment to the wellbeing of employees is key to unlocking greater workplace productivity.

Trendsetting technology titans – Apple, Facebook, Amazon, and Google – have, in the last decade, shifted the dial on how the modern workplace should look and feel. Following their lead, today’s workspaces are inspirational, encourage collaboration, increase productivity and spark innovation.

Today’s workplace must be experiential, desirable, and authentic, aligned with brand and culture to both attract and retain staff. Good leaders will be aware of the increasing trends of agile and remote working, recognizing that being attentive to employees’ individual needs and giving them flexibility is crucial to motivating them.

The rise of smartphones, laptops, tablets and other connected devices in the last ten years has revolutionised the way we work. That trend has led to the departure from the classic nine to five office environment. Now there is a demand for all kinds of zones at work – some vibrant and convivial, others quiet, with social connectivity as a vital component. The lines between work and home are becoming increasingly blurred, creating a comfortable, almost leisure environment that fosters much more interaction than ever before. Eating and drinking together is excellent for encouraging collaboration and innovation. It creates a kind of social glue. Knowing what your colleagues’ kids are called, or what their hobbies are, only humanises the atmosphere at work and strengthens the bonds between people.

To achieve a successful workplace environment, it is paramount for business leaders to set the tone and display a commitment to change

Relocating to a new workplace represents a great opportunity for change and, as with digital transformation (which might happen at the same time), it can become a fantastic motivator for staff, especially if their needs and desires are taken into account. It is important for there to be true connections all the way through the organisation, with design seen as an inclusive process. If there is a disconnect and people are not at the heart of the change, the results will almost certainly be less successful.

The relationship between leaders and staff is changing, particularly in today’s multi-generational workplace. Employees increasingly need to be thought of as adults. How can employees’ lives be made easier, so they are more at home while at work? Would a bike rack, or showers, or access to a dry-cleaning service, help them? Or opportunities to create connections through clubs, sports classes or charity committees etc.? This is where creating versatility plays an important part – by creating spaces that can serve different purposes, from townhall meetings to yoga classes through to client entertainment spaces etc., it helps support an organisation’s culture. If people feel supported and handed the chance to shape the organisation’s culture, they are immediately more motivated and productive.

Like any good workplace seeking to improve itself, asking its consumers – in this case employees – what would make their work life better is an invaluable exercise. Regular staff workshops, forums and surveys, plus reviewing all the data available to HR and IT departments can make the constant improvement of workplace performance achievable.

Today’s leaders need a greater appreciation of the impact of an effective workplace, and its fusion of physical environment with technology and people

Technology has a growing part to play here with sensors able to provide accurate data of how that workplace may be functioning. As ever it is the sensitive interpretation of that data that is the key.

To achieve a successful workplace environment, it is paramount for business leaders to set the tone and display a commitment to change. If they, as role models, don’t buy into it – literally and figuratively – then the culture will struggle which could have wide-reaching consequences on productivity and performance. Matching words with deeds will foster that all-important authenticity.

The puzzle of low productivity remains a difficult one to solve. Change is never straightforward, but we believe that the answers lie in our leaders better understanding the importance of their role in creating better working environments, healthy cultures, and in the relevant technology that enables both.

Turn your office into an exceptional workplace. Head to www.area.co.uk to learn more.

Goodbye to offices? Not so fast

More employees are working from home, but workplace innovations suggest a positive future for the office 

In the UK, lacklustre wage growth is forcing more staff to live further out of cities, creating longer commutes for many.  It’s no surprise, then, that the idea of an office as a central gathering point for all workers is under the microscope.

“All else being equal, every extra minute of commuting reduces job satisfaction,” argues Dr Kiron Chatterjee, associate professor in travel behaviour in the University of West England. “Twenty extra minutes each day has the equivalent impact on satisfaction as a 19 per cent reduction in income.”

Some of the best decisions and insights come from hallway and cafeteria discussions and impromptu team meetings

There are now 8.2 million people in the UK who regularly work from home at least once per week. That looks set to grow, with a 2017 Oddsmonkey report predicting that half of British employees will work remotely by 2020. Against such a backdrop, why do we need offices at all?

“The whole concept of future workspaces, and what the purpose of the office is, is definitely changing,” argues Andy Swann, author of The Human Workplace.

So is the office doomed? Not necessarily, says Mr Swann.

“There’s concern about shrinking workplaces, but what we’re actually seeing is a mental transition taking place about how buildings are being perceived – particularly in terms of the ‘value’ they give back,” he says. “Because humans are intrinsically social, workplaces will still be needed – but what we all need to accept is that a building does not become a ‘workplace’ on its own. They require thought.”

Workplaces will only remain relevant if they enable staff to have abstract thoughts, foster communities and allow for easy collaboration, adds Mr Swann.

This concept of offices as the social glue of company culture is gaining traction, with the FAANGs (Facebook, Apple, Amazon, Netflix and Google) famously leading the way and creating templates that others are now following. For example, the centrepiece of Bloomberg’s £1bn European HQ (opened in London in 2017) is a 210m spiralling ramp linking six of its nine floors, specifically designed to encourage ‘chance interactions’.

Work can no longer be somewhere people just ‘go’ to. It has to be something they feel

Besides, the working-from-home trend might not be all conquering. Yahoo Chief Executive Officer (CEO) Marissa Mayer famously banned the practice in 2013, writing: “Some of the best decisions and insights come from hallway and cafeteria discussions and impromptu team meetings.”

IBM followed suit in 2017, a remarkable move in a company where 40 per cent of staff worked remotely as recently as 2009. The information technology giant upgraded its offices accordingly, installing an ‘immersion room’ (complete with 360-degree screens), in its Manhattan building, while its Software Executive Briefing Center in Rome has been renovated under the eye of Bolidist Movement architect Massimo Iosa Ghini.

These could be shrewd moves, with research suggesting that inspirational office environments cause workers to stay put. Nearly a quarter (23 per cent) of US employees say the way an office is designed affects their retention, according to a recent report from Continental Office, with 85 per cent wanting a more collaborative work environment.

Digital agency Wunderman’s café-style break-out areas, park-bench-style desks, and pop-art decorated walls mean that although the creative agency offers unlimited at-home working for everyone, most people choose to come to the office instead, says Pip Hulbert, UK CEO of Wunderman.

Experience is all these days, argues Ms Hulbert.

“Work is such a big proportion of people’s lives that the environment they do it in has to be enjoyable,” she says. “Work can no longer be somewhere people just ‘go’ to. It has to be something they feel.

How millennial makeovers create brand evangelists

Revamping offices for digital natives can pay dividends, with young workers acting as company ambassadors

In the war for talent, an engaging office can help attract millennial workers – and a cohort of young, energetic brand ambassadors.

Taking their inspiration from trendy tech giants like Google and Facebook, younger jobseekers are putting ‘cool’ offices at the top of their employer wish list. In Capital One’s 2018 Work Environment Survey, 42 per cent of millennials said workplace design is very important, compared to just 34 per cent of Gen Xers and 32 per cent of Baby Boomers. In return for a desirable office, younger staff are keen to talk up their workplaces.

A good example of brand evangelism in practice comes from Wedlake Bell, a 250-strong law practice that in 2016 moved from five-floor, cellular-style offices to two-storey open-plan premises with no private space, even for partners.

“Open plan working certainly isn’t the norm in the legal sector and indeed, there were some doubts expressed over the potential lack of confidentiality in moving to this sort of design,” says Wedlake Bell Managing Partner Martin Arnold. “But the new office environment has created a firm sense of pride in all the people who work here and it is already regarded as part and parcel of our strong brand.”

The move – prompted by the firm’s need for greater internal communication and collaboration – has not only triggered “a significant increase” in revenue per square foot but has “notably boosted” interest in the firm among potential hires, Mr Arnold says. Indeed, a survey by Mindspace found that a fifth (21 per cent) of millennials admit to rejecting a potential employer because of the poor look of their workspace.

Businesses that neglect the social aspects of their culture risk alienating millennial employees

Wedlake Bell’s new office has even won over many of those who initially expressed doubts, with a 98 per cent approval rating among staff, and “has assisted us immeasurably in terms of retention. Interestingly, it has also enabled us to recruit high-quality people, of all ages, right across the organisation,” Mr Arnold adds.

“We’ve known since the time of the Hawthorne Experiments in the 1920s that there is a link between employee engagement and productivity and the attention organisations pay to them and their working conditions,” says Mark Eltringham of Workplace Insight, referring to research conducted at the Hawthorne works in Cicero, Illinois in the 1920s and 1930s. “Which means that this is a universal need for people, and one not restricted to millennials.”

“The important lesson is that it is not enough to provide people with a great working environment,” continues Mr Eltringham. “They must also know that their employer is interested in their needs and views and is prepared to act on them, to create a culture as well as an office that fosters engagement.”

This emphasis on culture is a key requirement for younger employees. A recent white paper from recruitment specialist Robert Walters – Attracting and Retaining Millennial Professionals – found that creating an inclusive, social workplace culture from the get-go is incredibly important. For example, a third of millennials surveyed said that meeting colleagues in a social setting was the most important part of their workplace induction, compared with just 15 per cent from Generation X and less than 1 per cent of Baby Boomers. Similarly, three-quarters of millennials said it is important or very important to have an engaging and fun workplace, including perks like free food and social events, compared with just 58 per cent of Generation X and 45 per cent of Baby Boomers.

“Businesses that neglect the social aspects of their culture risk alienating millennial employees,” said Chris Poole, managing director at Robert Walters. “For more traditional businesses this may be particularly challenging, but embracing small changes can serve to show millennial workers that managers are receptive to new ideas.”

In return for a desirable office, younger staff are keen to talk up their workplaces

The importance of “first impressions” was identified as a key finding of the report. While millennials are ambitious, they also place high importance on a sociable workplace. Giving them the chance to meet their new colleagues in a social setting as part of their induction “is an effective way to integrate them as part of your team”, the report said.

At a high level, the 2018 Deloitte Millennial Survey found that attracting and retaining millennials and Generation Z respondents begins with financial rewards and workplace culture, and is enhanced when businesses and senior management are diverse and when the workplace offers higher degrees of flexibility. With the millennial generation feeling uneasy about the future at a time of technological change and political upheaval, younger workers yearn for leaders whose decisions might benefit the world, as well as their careers, the report said.

“Our respondents are imploring business leaders to take the lead in solving the world’s problems, to shift organizations’ motives from inordinately focusing on making profit to balancing social concerns, and to be more diverse, flexible, nurturing of and generous with its employees,” according to the report. “Those organisations that are able to deliver likely will attract and retain the best millennial and Gen Z employees and potentially strengthen their prospects for long-term success.”

Five zones every office needs

These spaces are crucial to supporting the five work modes, according to the experts 

Modern offices should have spaces to support the five ‘work modes’, says Zoe Humphries, a senior workplace consultant at Steelcase. Here are the top five zones every office needs, according to the experts.

Social zone

Eat, drink, and be merry is the message from Enrico Sanna, chief executive officer of workspace architects Fora.

“Work is not just work. It’s a large part of our lives: we’re social creatures and to be happy we need opportunities to build and maintain social relationships at work,” he says. “The right kind of space needs to support that by providing areas to eat, drink, have fun, as well as areas for entertaining clients.”

Eugen Miropolski, managing director of WeWork in Europe and the Pacific, agrees. “An office kitchen or canteen is a hub for people coming together to communicate with one another.”

Meetings zone

“Whether it is due to the nature of a client account, or to hold a sensitive conversation at work, ensuring the office has a private zone – whether access to a meeting room or your own private office – is crucial, especially with the rise of the open-plan office,” says Mr Miropolski.

Neil McLocklin, head of strategic consulting EMEA at Knight Frank, reckons it’s vital to have a specific meeting area to ‘big up’ employees and teams.

“A ‘town hall’ zone gives you the ability to bring together a whole organisation, or at least large cross-functional teams, to celebrate successes – both professional and personal – or just for an end-of-the-week pizza,” he says.

Collaboration zone

Every organisation should focus on innovating, and providing the space and opportunity for this is essential. Teamwork is a huge element of a successful business, so why not have an area to encourage cross-pollination and spitball concepts?

“Modern work demands us to work together, so a collaboration zone is essential. This area could be couches for social collaboration or a common meeting room,” says Margie Dimech, an employee engagement consultant at London-based creative consultancy Radley Yeldar.

Rob Hingston, head of Origin Workspace, concurs: “A lounge or communal area is excellent for brainstorming ideas, as well as allowing colleagues to catch up.”

Wellness zone

“People are the most valuable asset in any organisation, therefore investing in wellness and a health strategy is vital both ethically but also financially,” states Joe Gaunt, founder and chief executive of Hero, a digital wellness company. He believes a specific area for yoga and other relaxing activities will ultimately boost the bottom line, with healthy, happy and highly engaged employees an average of up to 30 days more productive per annum.

Sports zone

Pierre David, UK human resources leader at sports-equipment retail giant Decathlon, believes introducing a table tennis table or a darts board will work wonders in an office. Not only does it generate healthy competition and socialising, it can also spark innovation.

“Many of our office spaces come with purpose-built sports facilities that serve both our team members and the local community, and they encourage social connections,” he says, adding that his company’s new London office has a rooftop multi-sport pitch and areas to practise activities like yoga. Such play zones – or ‘sports zones’ – are important for the health and wellbeing of the workforce, Mr David says, as well as contributing to the social atmosphere in the office.

Poor productivity? Revamp your office

The UK’s productivity shortfall could be tackled through redesigned office space 

The country’s woeful lack of productivity is well publicised. The average German worker produces more in four days than the United Kingdom equivalent can manage in five, according to the latest Office for National Statistics research, published in October 2017.

However, redesigned office space could boost working conditions, leading to improved productivity, according to a recent study from Oxford Economics, which was backed by electronics giant Ricoh. The study says that revamping the workplace could unlock £36.8 billion in untapped gross domestic product for the British economy.

The key to unleashing this growth and revenue is optimising every aspect of the workplace, including the environment and design, says Phil Keoghan, chief executive officer, Ricoh UK and Ireland.

“Think of workplace elements such as layout, design and the overall environment as a critical conduit between culture and technology infrastructure,” he says. “The right office environment can create a system for people to collaborate, share and improve overall culture, while also providing a means to deliver the right technology that can enhance individual and group work.”

Executives see the benefits as well, Mr Keoghan says, with the study showing that 70 per cent believe the office environment impacts productivity and performance by up to 10 per cent.

Eugen Miropolski, shared-workplace pioneer WeWork’s managing director in Europe and the Pacific, stresses that culture, behaviour and happiness – which in turn boosts productivity – can dramatically improve with a considered office fit-out.

“Employees are undoubtedly at the heart of any organisation, driving forward growth and innovation, therefore ensuring they have the infrastructure they need to thrive in their roles is crucial,” he says. “Whether this means providing collaborative workspaces for teams to work together freely or making sure employees have the appropriate technological support, providing them with an optimum work environment will ensure they have purpose and enthusiasm to thrive, and profit will naturally follow.”

The design should solve the explicit, tacit and latent needs of the users while being authentic to the culture of the organisation

Increasingly, an inspirational office that caters for a worker’s specific job needs is vital for both attracting and retaining staff – particularly millennials. Mark Phillips, co-founder of London-based office design and furniture company K2 Space, points to his organisation’s Meeting Expectations report, produced with YouGov’s research and released in October, which reveals that “30 per cent of workers believe their office is outdated, uninspiring, and in need of a complete refurbishment”. Over a fifth of the 1,000 respondents (21 per cent) said that if their office were better designed they would be more productive at work.

“A recurring theme throughout the research is that millennials are generally the least content with their current workplace, and therefore most in favour of change,” Mr Phillips says, with 25 per cent of this group saying they would like a games area in their office for playing and socialising with colleagues, compared with just 2 per cent of baby boomers.

“The report shows millennials lack the spaces and resources to carry out their jobs effectively,” he adds. “By failing to meet the demands of this modern, digital-native workforce, employers risk missing out on the top talent.”

Indeed, 54 per cent of the millennials YouGov surveyed for the K2 Space report said the room where they were interviewed for a job would influence their decision on working for an organisation.

“Every modern office should have spaces to support the five work modes: focus, collaborate, learn, socialise and rejuvenate,” says Zoe Humphries, a senior workplace consultant at global office furniture leader Steelcase. “There is no one-size-fits-all solution, so it is crucial to understand how people use the space to complete what they need to do. The design should solve the explicit, tacit and latent needs of the users while being authentic to the culture of the organisation.”

The right office environment can create a system for people to collaborate, share and improve overall culture

Technology has an important role to play in today’s workspaces. A fast Internet connection and WiFi, new equipment and more-than-adequate cybersecurity are imperative. Such tech can also help spark innovation.

“We’re seeing that technology is enabling an exponential rise in creativity,” says Gavin Mee, vice president, northern EMEA, at multinational software leader Adobe. Innovations such as voice recognition are moving into the workplace and providing ways to speed up basic tasks, he says. “With artificial intelligence-powered voice assistants taking care of these, employers can spend more time on creative thinking – where they can add the most value to their business.”

Euan Davis, European lead for IT services provider Cognizant’s Center for the Future of Work, says that “with the shift into digital, the rise of data and the growth of platforms, AI and automation, virtual work and a ‘no-office’ culture has become possible. However, the workspace has never mattered more”. Mr Davis says his organisation’s recent Space Matters report “found that business decision makers ranked the strategic importance of investing in an efficient and effective workspace second only to focusing resources on the latest technology”.

Companies like Apple and Google have invested heavily in developing new work campuses, Mr Davis adds, with the aim of fostering innovation and creativity.

“While most of us do not have the real estate budget of those tech titans, we can take a strategic approach to plan the spaces where people work to boost productivity and spur innovation. If properly conceived and designed, workspaces can drive game-changing productivity and innovation that any business requires to thrive in the digital age.”