The workplace — especially for office workers — was always a destination where they had very little control.
For employers, it made sense. Build an environment where you can drive employee productivity, monitor interactions, enable collaboration, and secure all data and information. For employees, it was about compartmentalizing their work and home lives and finding work-life nirvana.
COVID-19 challenged this idea of the workplace. During a panel discussion held at the Connected Cities Conference by KPMG — part of the four-day virtual experience called StartmeupHK Festival 2020 — Nancy Yip, territory general manager for Hong Kong and Taiwan at WeWork noted that workplace flexibility and scalability are urgent matters.
“Forty-two percent wanted to reorganize the workplace,” she said, citing a recent EIU survey.
“What we are seeing is a shift in three key areas: workplace, workspace and the work pace,” said Nigel Smith, managing director at Colliers who joined the panel.
He noted that companies understand that humans want to work together but not everyone needs to. Employee wellness and social distancing are becoming key factors as well as having the right security and technology to enable flexible working.
Commercial real estate is here to stay
Smith quickly shot down the idea that the corporate workplace market will get smaller, leading to a corporate real estate dive and cheaper rents.
“In some cases, you may even need a bigger workplace now,” said Smith, pointing to recent rules for social distancing that may be there for a long time. It may also be more expensive to meet new compliance and employee laws because of the pandemic, making workplaces dearer post-COVID-19.
Employers also have existing tenancy agreements to deal with. “There are timing challenges as many [companies] are locked into leasing contracts,” said Smith.
However, Smith saw employers looking at flexible leases more or adding flex space to the contract. While companies will still maintain a traditional space, they will have “flexible space to scale fast” when needed.
Redefining the workplace definition
This flexible space need not be constrained by traditional ideas of real estate.
For example, Ramesh Daryanani, vice president for global sales in Asia Pacific (excluding China) at Marriott International — who also took part in the panel — said that companies are looking at hotels as potential workplaces.
Marriott is itself adapting to these new demands, converting their business centers and hotel rooms for office space. For example, it is allowing companies to use their video conferencing facilities “so you do not have to travel to a new place but video conference to another Marriott location” around the world.
Yip agreed that the demand for more flexible space is resulting in a lot of innovation. “Now [customers] are asking for temporary increases in space, are decentralizing their workplaces and enabling work rotations. We are building some of these solutions.”
Traditional businesses are also rethinking their business model. “It has forced us to look at the regular business model,” said Daryanani.
For example, Marriott used to promote its hotels as a destination for dining. With COVID-19 and subsequent lockdowns, the hotel is working with partners to “bring the dining experience to the home.”
Finding the new normal in business operations
Smith felt that companies need to do some soul searching on fundamental questions. They include whether the company can operate when you “split the operations space or decentralize.”
Other factors will add to the costs and impact workplace decisions. “For example, for us cleanliness is the new amenity,” Daryanani said citing internal survey results with their members. “So, we need to up our cleanliness standards across the world, like using electrostatic sprayers.”
“You need to have short, medium and long-term strategies for real estate. And you need to be thinking about your staff. The war for talent is so hard that attracting through the workspace is important,” advised Smith.
One positive outcome is that landlords and tenants are now engaging more to navigate the new normal. The employee needs have now become central to the discussion about the workplace.
As employers prepare for rapid scaling when the market picks up, concepts like temporary staffing and workplaces will have very different meanings by the end of this year.