Will the need for office space increase or decrease as employees return to work as we continue through 2022?
The New York Times, in an article title, “Big Tech Makes a Bet: Offices are still The Future,” reports that big tech companies believe that people are going to return to work eventually, and that is why they are rapidly buying and leasing properties.
A similar report; “Why Companies are not Cutting Back on Office Space,” was shared around our office about how workstyles were changing to hybrid, but office space was not being reduced. It was an interesting insight into the concept of space and its optimization, use, and impact on people. We decided to sit down with our CEO and Head of Strategy, Dan Boram, to get his thoughts on the topics that were discussed in it.
Q1. What are your thoughts on this article ‘Why companies are not Cutting Back on Office Space?’
Most people are not comfortable being crowded into space as of now, and rightly so. This is not likely to change in the future, even as offices open. Rows and rows of people and crowding on benches in an office is not going to be anyone’s first choice and people are going to expect extra space. In the article, there is a comment about ways to reduce density, and it is proposed to cut person-days on sight, and I do agree with that. For example, if you are in the office 40% of the time or more, you have a dedicated office space, otherwise you must book one. This is going to become the norm.
Based on findings we get from using workplace strategy and Pivvot, most people want to work from home on Mondays and Fridays. That means that most of one’s staff will be in from Tuesday to Thursday, so you cannot compress too much space because everyone needs to have a spot.
The office of the future must be inviting. Tightly packed cubicles are out for sure and open seating plans are in. However, what we are learning from various companies is that there are introverted workers as well, who come into the office and do not want to socialize all day. So, we are also going to see a demand for focus areas remaining in the office to allow people when they are in to collaborate with the team. So there needs to be that allowance.
People who use offices also include knowledge workers, whose work does not involve collaboration at all, but they still need an office space to go to. If you reduce your office space to the extent that you are not bringing them in enough, they will lose the cultural connection to the company. While some people work very well from home, on the other hand, there are also knowledge workers who struggle to do the same. So, all this conversation about mental health has cropped up. It is a critical issue. One of the challenges is there is that lack of separation from home and work, so you do not have a refresh. Plus, things can get isolating. Even if one is introverted and prefers working in a focus area, they have an option to interact with others and be social during their breaks.
Q2. Since a lot of offices have gone into a hybrid working model since the onset of the pandemic and this seems likely to stay, do you think not re-vamping or reducing their space is a mistake?
You need to assess your whole team. I am going to reference Pivvot here because it is a relevant tool. It has a way to put your whole team into workstyle personas and uses a lot of data to determine how much space etc. you really require to suit everyone’s needs. If you are not using Pivvot, you should be doing it yourself, and figuring out what makes sense for your team as far as how they are going to work. So, what they need in a collaboration space, what they need for focus space, etc. when they are in the office.
You cannot really decide whether to reduce office space or not until you know what your people need to support them moving forward and right now it is most organizations guessing. Without a proper assessment, that has a proven record of accomplishment, it is hard to make those decisions.
Q3. How will this impact office space in Vancouver?
I think most organizations are holding on to space, because they do not know what else to do, and do not know what is to come or how things are going to change. They are afraid that there will be a time when everyone will come back to the office, and if they reduce square footage, then they are backing themselves into a corner. So, it is the fear of the unknown that is keeping people from dumping space. There are organizations that are whose entire workforce works much better from home than they ever did in the office, but for the organizations whose culture demands collaboration and requires office space to bring teams together, which I’d say is more often the case than not, they are hanging on to space.
As we get further into the pandemic, we are starting to see that staff will want to come back to the office, even if it’s not all the time. They enjoy flexibility. In a market where there is higher vacancy rate and there is more space available, you can afford to let go of some space, because you know that it will be easy to get it back again, but in a market like Vancouver, where space is tight, it is wise to hang on to space rather than let it go.
Q4. What would you tell someone who is running an office when they are considering the concept of their office space and how to change it?
I think the first thing I would tell them is to involve their team and leadership to understand how everyone works. Take into consideration the long-range goals of how people work and how the office can support them. Also, look beyond the pandemic and do not plan based on it. Obviously, you cannot jam people together, but for example, do not overdo it with barriers, with plexiglass everywhere etc.
But more importantly, look at how your team works and will work in the future as far as you can plan how the business will operate within that. Will technology replace some processes? If so, what space is required to bring teams together and give the best experience? It’ll be different for every organization. There is no one-size fits all here and it is more based on the people you have and the company culture that you are trying to create.
Q5. We now are seeing a dichotomy where employers want their employees back in the office but employees like the flexibility of working from home and choosing when to come in. How do you see that working out long-term and how do you think that will affect the face of office design?
Personally, my view is that if you must have people sitting in a seat where you can watch them work, then you have got the wrong people. You know your team should be able to work whether they work from home or not and excel in it. I believe in having a team that you can trust to perform no matter where they are.
And really, the reason for bringing them to the office is a cultural connection and team building. People need to come into work for inspiration, problem-solving, and innovation. And I think the whole thought process behind needing people to be sitting at a desk is wrong, because, as I mentioned before, if that is the type of workforce you have, then you have the wrong people. Further, the leadership’s lack of trust in their employees erodes morale.
That being said, every business leader understands how hard it is to manage a completely remote culture and that you need to have the team come together in some capacity, and that will be the norm moving forward.
Q6. This also plays into your point where you said to involve your workforce and take their opinions into account before making decisions for them, correct?
Yes, and there are two sides to that. What is the path and strategy for the business, and what is needed from ap performance point of view from the team? Can they perform well from home? If so, then working from home is part of the equation. It will be needed to be able to attract and retain talent.
I understand that if one bases everything off the staff’s opinions, they might struggle on the performance front, so there needs to be a good balance.
Q7. Will offices remain vacant? If they do not reduce space, will that be considered a waste of money?
I think the utilization of space will forever be lower than it was before. Before, the pandemic, on average, there was somewhere between 60-70% of the office that was in use the entire time. That percentage has now shifted to about 40%.
What I mean by utilization of space is that if you looked at all the seats in an office, approximately 7 out of 10 seats were occupied on average, whereas in the future, that number is going to drop to about 4 or 5. Aura office designers need to figure out a way to utilize those spaces when they are not occupied. This must be done very carefully, to not penalize people from coming into the office. If it is cumbersome for them to access their space, then you will not get them into the office, which will affect the culture that you are trying to create.
Knowledge-transfer, collaboration, innovation, etc. happens mostly when in person for most organizations. I say there are some company cultures that operate successfully online and completely remote, but they are few and it is not easy. But I would not say that offices will remain vacant in the future, I would just say reduction and utilization. Smart organizations and the designers helping them will find ways to utilize space when it is not occupied by people.
A good example is using private offices as meeting spaces when they are not in use. They can be used as drop-in meeting spaces and can be booked via booking apps by employees. Having multi-purpose spaces will help with space optimization.
Q8. Keeping all this in mind, what percentage of people do you think are redesigning or renovating their spaces? Are a lot of them moving or are they simply revamping their existing space?
I am unsure if the exact percentage, I will admit, but what I could tell you is that if 10 organizations were coming to the end of their leases, my guess is that 3 out of those would change their space. With the pandemic happening, people are thinking about the use of space. I would not be surprised if even 60% of people are thinking about changes that need to happen to their space, and it is not necessarily a reduction, but more in terms of how the space is being used. Subsequently, the layout and reconfiguration are being thought about. 30% of people that signed a new lease change their space, so I would not be surprised if that number has doubled, which is creating quite a demand on the market currently.
Q9. What do you think is the best idea regarding this issue? Should people be reducing and redesigning their spaces?
Well, I think that the pandemic has forced change in a lot of areas, especially workflow processes. You need to look at how your teams work and look at the issue as a triangle: You have the business process, the people that to the process within the business, and the built environment to support them—which is now a split between home and office. That will be accepted as normal moving forward.
Before making any changes, look at how your team needs to be supported from an office environment to give them the best experience possible. Otherwise, you are just guessing or thinking things would be promising ideas, without looking at the data. Without looking at the data and the facts, you are taking a huge risk.
Pivvot is one tool that takes a lot of the guesswork out. By doing assessments for the whole staff, and seeing the modeling coming from that, you can tell when you need to make a change and what change you need to make. It just makes the entire process more efficient and less tedious. It also saves you from spending a lot of money on office changes that are not necessarily needed.
However, if you are looking to make substantial changes to your office, using a design-build firm is the best way to go. They can shepherd the timeline and the budget and provide you with a world-class design. That is something, in fact, that I really love about Aura.
Q10. What do you think sets us apart from other firms in our market? Why do you think clients choose us?
What I genuinely love about Aura is our culture and the team. Our values and our purpose—and you could take those and do almost any form of business. We do what we do to impact communities positively. The values we have, and how the team treats each other—with respect and empathy, is really what I love most. Also, I love the work that we do. I love watching a client light up when they see their new design and get excited about how it is going to affect their company culture and their team.
Related to this, therefore clients choose Aura–because of our culture. There is a family feel to it, and even though technically it is a family business, I feel that everyone who works here is a part of it. We support each other and we operate like a family. We genuinely care about our clients, and I think that they can sense that. We always strive to give them the best that we can and keep them informed and involve, and even guide them all the way through the process, all while providing world-class design. That is what sets us apart.