Michael Greene
As my grandmother would always say, have a cup of tea and a lie down and think it through.
Rebecca Kent
And cheers to that.
So, this episode we’re doing a bit differently. We’ll hear more from Michael Greene, from parts of a presentation he made for a JLL webinar titled ‘Reimagine the future of our workplaces’. You can watch the full webinar on jll.com.au under the ‘coronavirus resources’ section.
We also hear from Claudette Leeming, head of property strategy and performance at Australia Post, which is currently in the market for a new headquarters in Melbourne.
Claudette Leeming
I think in many regards we are exceptionally fortunate, putting aside all the negative impacts of COVID, to have COVID-19 occurring while we're in the midst of this review. Because as a business, it's giving us more confidence to have some pretty challenging conversations about how we might work in the future. Also it has absolutely doubled down how important flexibility is.
Rebecca Kent
That’s Claudette there.
But for now, the pandemic has given business and real estate leaders an opportunity to re-evaluate the office.
Here’s Michael Greene …
Michael Greene
The role of the office was clearly expanding to be a cultural hub, a collaboration accelerator, and a key for talent, attraction and retention. And that's what we've been doing for many years with our clients - creating those sort of workplaces. So for many employees, the office became a social hub, a productivity-boosting space, with the ability to work in other spaces. So it was also a flexibility enhancer.
So what are employees saying at the moment about what they're dealing with? We did a survey of 3000 employees across the globe and these are the Australian results. Two thirds have moved to work from home. And a lot have felt that they're more productive in this first phase. What we've missed in the office was the human interaction and face-to-face work with our colleagues, which backs up the trend towards the office as a place of collaboration and innovation.
Of course, the danger is that long-term work-from-home will cause diminishing returns on integration, as we lose that idea of generating ideas as a team in the workplace. But what we didn't miss was the daily commute. And what we appreciated was greater work flexibility and work-life balance. So, a more distributed and liquid workforce.
Rebecca Kent
The pandemic has really brought home the idea that work can happen anywhere. Because of this, considerations about how office space should be used – depending on where that office space is and who is using it, will be more complex.
The economic impact of COVID-19 means the cost of property and wages will factor more heavily than before.
Many organisations will be downsizing their real estate footprint by 20 to 50 percent, according to Michael Greene.
In a survey conducted by PwC, 26 percent of company chief financial officers said they’ll be cutting back on real estate. Half of them said they would make remote working permanent for roles that would allow it; Global investment bank Morgan Stanley thinks it will need less real estate, and multinationals UBS and Barclays say they are having a rethink about the purpose of their centralised headquarters.
But it’s not all a one-way street. Several major leasing deals are backing a return to life in big cities.
Legal firm Baker McKenzie has, over the COVID-19 period, committed to 13,000 square metres of new office space in central London, which it will occupy from 2023. The firm’s London managing partner Alex Chadwick has said that now, it feels more important than ever to provide the space for lawyers to collaborate, embrace new technologies, and to meet and interact with clients.
And Facebook, which is allowing staff to work from home until July 2021 if they choose, has committed to 67,000 sqm of new offices in New York.
So, from one company to the next, workplace strategies will differ. That’s for sure.
But where they’ll align – strategists say - is on the health and sustainability of workplaces. And there’ll be less focus on desks, and more on experience.
How does it all look logistically?
Michael Greene
We're thinking that there are three possible answers here and I'm thinking a hybrid solution, but there was a tweet from Twitter, and the woman said ‘promoting choice for our employees to choose how they want to work - that includes remote work, or officers, or a combination of the two. Everyone is different, no one size solution fits all’. I clearly think that there was a cup of tea and a lie down before that was statement was made. Very sensible.
But what does that actually look like in the physical environment? The first one, which is the ‘conservative’, is where many of us probably already are: if everyone turned up, they'd find a place to work. It acknowledges that the majority of our work is concentrated work, hence the number of desks with collaboration. So all the meeting rooms are in the middle.
We then moved to a ‘moderate’ approach. And this approach is saying that some concentrated work will be done in the office, some concentrated work will be done at home, but there certainly will be more collaboration in the workplace, hence greater spaces to do that.
The third is the most radical and progressive approach and that's where we're saying, ‘if you're going to do concentrated work, you will predominantly do that at home. And the office will be a place where you come to meet your colleagues, interact and predominantly collaborate. Hence, why so few desks and so many different types of space to meet.
So if we think of that from a project perspective, if I was working on a project, the team would come together, we’d brainstorm the ideas, we’d come up with the purpose and next steps - that'll all be details. We would then go home and do our work before coming back to the office and sharing our findings without our colleague.
The other methodology or thing that people are talking about is the ‘hub and spoke model’. And there's some irony that in Melbourne we were actually re-centralising in many cases with people moving back to the CBD. Whereas in Sydney, there was already a trend towards some decentralisation. And the benefits of this are clearly a shorter commute - less use of public transport. And it provides a safe and compliant workplace close to employees’ homes. It's generally more cost-effective space in the suburbs. And it works well in large cities with multiple commercial hubs. I certainly see a role for coworkers in this kind of environment where they could provide these across cities, and organisations could take space in them for their employees who live in that in that area.
I think the questions that still sit over this type of workplace is teamwork and collaboration. It’s all very well to go into an office. But if I think of Sydney, I've got some members up on the Northern Beaches, I'm out in North Ryde, some out Parramatta way, and some in the Shire. If I go into coworking or hubs near my home, I'm still not going to actually meet with my team. The only way that will happen is probably if we make the trek into a centralised location, like the CBD, from time to time.
Rebecca Kent
So let’s put that into some real world context. Here’s Claudette Leeming, of Australia Post, who also considers how these workplace scenarios affect workers of different generations. Because today, the workplace is a lot more complicated: five generations are working side by side.
Claudette Leeming
So typically, before COVID, our workplaces were occupied at about over 80 percent of their capacity. So in lay terms you could say that for the majority of the workplace, they were still coming into the office five days a week or thereabout. So, I think Michael called that ‘conservative’. Probably not surprising.
In terms of where we're at now, we are in the market to assess all our options for our Melbourne accommodation in 2024. Which is the time is when our current term at Burke Street expires. And I think in many regards, we are exceptionally fortunate - putting aside all the negative impacts of COVID - to have COVID-19 occurring while we're in the midst of this review. Because as a business, it's giving us more confidence to have some pretty challenging conversations about how we might work in the future. And also it has absolutely doubled down how very important flexibility is in driving flexibility into our accommodation, given it still a very long-term, significant commitment we’ll be making.
So I think with the global working-from-home experiment, it's been busting some myths for sure around who can or can't work productively from time. But also, to Michael's point, absolutely sharpening what is the core purpose of the workplace, and why will people want to return when this period ends.
In my perspective, that role of the workplace is about connection to our business purpose, our values and our brand. It's where we come to connect to something bigger than ourselves. It is about collaboration - and I will say there are some people who are really amazing at digital collaboration, and it's very native to them. But certainly not to all of us. When we talk about collaboration, we're talking about spontaneous collaboration, incidental, unplanned stuff, not stuff that you’re booking a Zoom meeting for, or setting up a Teams chat, or what have you. And also, it's much more rapid when it's in the workplace because it comes through hearing something and jumping on it.
The workplace will also be for learning and development. And again, you can do learning online, but you can't do tacit learning online or ad hoc learning by observation. So the things that you learn by being surrounded by people with more experience than yourself.
I think also coming together physically is better for complex problem solving and innovation. And to Michael's point, again, it’s absolutely about social connection and support. And I think everyone is really missing that and it is important.
Rebecca Kent
So most companies will be committed to some sort of hybrid workplace model between working from home, or remotely, and in the office.
But this doesn’t come without its challenges. Without careful management of people and real estate, companies risk no one coming into the office on a particular day, or not the right people for everyone to have the best possible experience – including the opportunity to soak up the company’s culture.
Those hurdles can be overcome, Michael says.
Michael Greene
The first office plan is how we actually know how many people we can safely have in our work environment. So we set up systems which say how many people, and then what figures can be in any one in any one time.
The second one, for the employees, is an app which allows them to book online. Everyone can't turn up at the same time, there wouldn’t be just any place for them to go. So we need to start planning for things like stopping all managers from wanting to have all-team meetings on a Monday. Or everyone deciding that their team will work from home on a Friday. That just won't work in that kind of environment. It also allows employees to book in, to know where they're going to sit, allow teams to decide what space they're going to use, and where they're going to work.
The third element is safety: when I get in there, how do I know that the workplace or the work point that I'm going to use has been cleaned and sanitised? We can always leave that to the employees, but there are some - rather like telling your teenage children to pick up wet towels – it doesn't matter how many times you say it, they're just not going to do it. So there needs to be a system whereby, when I arrive, I know because the system tells me that that desk, or that workplace, has been cleaned. And when I leave, I press the button, the facilities management team comes in and cleans it, and then they let the system know that that space is now ready for someone else to use it. That’s to make sure that we get the most out of our investment in that space and that it's safe for our employees.
And finally, we need to track the space and monitor the use: How many people do we have in. Are they actually meeting the guidelines? Are they breaching the guidelines? What spaces are popular and when? And how do we manage demand to ensure the maximum productivity out of our space.
Rebecca Kent
For many organisations, their status, their survival, and their culture, has been inextricably linked to their big city office buildings. And the pandemic has catapulted them into this new phase.
It might be difficult to fully understand how new ways of working will play out over time, but the advantage of building flexibility into any new model is that it can be adapted around new learnings.
Claudette Leeming
In terms of what the space will look like and what will be in that workplace, I think there's plenty of time for us to land on what that might be. Because ultimately, as a business, you make a practical allocation of space, and then that space has to be carved up in a way that's very flexible and adaptable over time, and managed so that it's optimally used.
So it's a very challenging and stressful time in many regards. But also, it's an incredible opportunity to totally rethink the workplace in a very positive way, and it’s exciting.
Rebecca Kent
Thanks for listening.
I’m Rebecca Kent, host of JLL’s Perspectives podcast. I hope you enjoyed this episode. If you did, it would be great if you could leave us a quick review on whatever podcast listening app you’re using.
I highly recommend watching the JLL webinar ‘Reimagine the future of our workplaces’. Find it under the Coronavirus resources section on our website.
While you’re there, pop over to our Perspectives podcast page to learn more about Michael Greene, and Claudette Leeming, and get in touch with them there, too.
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