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Is the traditional office dead? Experts predict major change ahead in the workplace

Cath Everett Profile picture for user catheverett June 22, 2020
After the work-from-home disruption of COVID-19, experts predict major change ahead as people return to the workplace

Row of empty chairs at office cubicles - Photo by kate.sade on Unsplash
(Photo by kate.sade on Unsplash)

Before the Covid-19 crisis, conventional wisdom said that offices were at the heart of a productive and culturally sound company life — a situation reflected in the high price of real estate in most major urban centers.

But lockdowns in countries across the world have led to a major shift in attitudes. A report by management consultancy McKinsey & Company entitled Reimagining the office and work life after Covid-19 indicated, for example, that a huge 62% of employed Americans worked at home during lockdown compared with only 25% a couple of years ago. Moreover, four out of five said they enjoyed it, with 41% pointing out they were more productive and 28% just as productive as they had been in the past.

Unsurprisingly then, based on data points analysed by commercial real-estate services firm Cushman & Wakefield (C&W) and compiled into a study called The Future of Workplace, nearly three quarters of workers globally now believe their employer should embrace some form of flexible or remote working.

According to McKinsey, many employers can also see the benefits of such an approach too, believing it will enable them to:

Access new pools of talent with fewer locational constraints, adopt innovative processes to boost productivity, create an even stronger culture, and significantly reduce real-estate costs.

But in cultural terms, there are decided question marks over certain aspects of home working's impact. On the plus side, task-oriented, team collaboration has proved more effective than expected, personal productivity has in the main remained high and mutual trust between staff and their employers is strong, C&W indicates.

However, cracks are starting to show in other areas. For instance, remote working has had a negative effect on employees' sense of personal connection with each other. The problem here is that this kind of personal connection is an "extremely important component of employee experience under any circumstances, and even more so in the current environment", the C&W report points out.

Indeed, such face-to-face interactions not only help with personal bonding but also contribute to how connected an individual feels to the company itself. This feeling of connection to corporate culture, however, has now plummeted. Collaboration opportunities in terms of informal learning and mentoring have also been hit.

The changing shape of the workplace

As such issues start to make themselves felt, however, it seems likely employers will take steps in a bid to compensate. This means, C&W believes, that the future workplace will no longer consist of a single location. Instead it will comprise a network of physical and virtual "on-demand places to support convenience, functionality and wellbeing". It explains the rationale:

People need a variety of places to interact: Personal connections and bonding are suffering, impacting connection to corporate culture and learning. Enabling people to choose where to work as they need, will enable them to both get their jobs done and build personal connections.

But this vision does not mean the traditional office is dead. In the interim at least, working is likely to be staggered between some employees working on site and some working from home. As the report points out:

If companies make no change in enabling flexible working, they could see [workspace] footprint size increase by 15-20% as a result of social distancing measures and new types of collaborative environments. However, this is easily offset with increased flexible working practices. If 50% of respondents who indicated they would increase their flexible working followed through on this, there would be no net change in footprint.

But over time, it does seem likely that the purpose of the office will change. In future, the aim will be to provide employees with an "inspiring" destination to "strengthen cultural connection, learning, bonding with customers and colleagues". It will also be designed to "foster creativity and innovation", C&W believes.

McKinsey also agrees that such a shift is highly likely. It says:

Across industries, leaders will use the lessons from this large-scale work-from-home experiment to reimagine how work is done — and what role offices should play — in creative and bold ways.

While such reimagining will look different for each employer based on cultural considerations, talent requirements, office locations and the like, what each will have in common is the need for tech, HR, facilities management and business leaders to work together in order to determine what is required to succeed in future. To help, McKinsey recommends that organisations focus on four key areas:

1. Reworking business processes and cultural practices

Most employers have simply transposed existing processes to remote working contexts without changing them much, something that has worked well for some but not for others. But the management consultancy believes:

Reimagining and reconstructing processes and practices will serve as a foundation of an improved operating model that leverages the best of both in-person and remote work.

As a result, it recommends that when bringing about change, organisations assume that:

Processes will be reconstructed digitally and put the burden of proof on those who argue for a return to purely physical pre-Covid-19 legacy processes.

Payroll and HR software and services provider ADP is taking a systematic approach to reimagining its workplace, meanwhile, by introducing what it has termed, ‘Project DeLorean' due to its ‘Back to the Future' connotations. The initiative involves re-evaluating everything from employee and customer expectations to workplace design. Jeff Phipps, managing director for the UK and Ireland, explains:

It's an opportunity to do things differently and so we've had a lot of discussions about things like six hour working days and four day weeks. We're also working on a number of projects to automate work, which creates opportunities for a skills evolution in areas, such as digital... We're wary about jumping in too quickly and making significant policy changes when the situation is still so fluid, but if there's something obvious, we'll do it.

2. Deciding which roles work where

As employers identify what work can be done remotely, it becomes possible to decide on what roles need to be carried out in person and to what extent. Possible worker categories here include fully remote, hybrid remote, hybrid remote by exception and fully on site. McKinsey believes:

This approach could be a winning proposition for both employers and employees, with profound effects on the quality of talent and organization can access and the cost of that talent.

Robert Bloor, group financial controller at Equiniti Group, which provides outsourcing in the field of financial and admin services and which migrated from using an on premise HR, finance and payroll applications to a Workday cloud-based system over Easter, agrees that future working arrangements will probably take on a more hybrid flavor than they once had. While he believes that "constant adaptation" will be the norm for some time to come, he adds:

I can say with a degree of certainty that I don't expect us to all be in the office five days a week for 52 weeks of the year now that we've had proof home working can be effective.

3. Redesigning the workplace to support organizational priorities

Offices may need to be "entirely rethought and transformed" to be fit for purpose in a post-Covid-19 world, the management consultancy predicts. This would mean redesigning workspaces to support desired outcomes in terms of collaboration, productivity, culture and the work experience. A further aim would be to support interactions that cannot easily take place remotely. For instance, the report questions:

If the primary purpose of an organization's space is to accommodate specific moments of collaboration rather than individual work…should 80% of the office be devoted to collaboration rooms?

Furthermore, if corporate culture, productivity, collaboration and learning opportunities are all to be maintained, it is also likely that:

The boundaries between being physically in the office and out of the office must collapse…Always-on videoconferencing, seamless in-person and remote collaboration spaces (such as virtual whiteboards), and asynchronous collaboration and working models will quickly shift from futuristic ideas to standard practice.

4. Reassessing how much office space is required

Companies will also have to take a fresh look at how much office space they require, where it needs to be and what it will be used for. McKinsey agrees with C&W here that such considerations are likely to result in employers using a "portfolio of space solutions", ranging from ownership and standard and flexible leases to flexible and co-working spaces, as well as some remote working. It also believes that the possible savings to be gained are "significant" here:

Over time, some organizations could reduce their real-estate costs by 30%. Those that shift to a fully virtual model could almost eliminate them. Both could also increase their organizational resilience and reduce their level of risk by having employees work in many different locations.

My take

The huge shifts brought about by Covid-19 lockdowns around the world have not just created lots of disruption. They have also created the opportunity to effect significant — and hopefully positive — workplace change. But such change will not just occur spontaneously. It will need to be thought about and planned for by a range of players, including tech, coming together to ensure the future of the organisation is a sustainable one.

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