Evolving workplaces for the future – What is really driving the flight to quality?

A recent survey from Deloitte revealed the picture in the capital, showing that London has seen the highest number of office refurbishment projects start in nearly two decades. This is a picture being seen throughout the UK as employers are looking to encourage staff back into the workplace – particularly as many organisations are working to attract new staff.

Quality is king, according to the market. Some businesses may reduce their overall footprints while paying more to integrate the highest levels of quality. The natural reaction is to see this as a direct result of the pandemic, but it is actually the result of a confluence of different drivers, all of which are common in the modern environment.

Changing requirements of the workplace

Looking across the Atlantic to the United States, we see a significant shift towards people to return to the office full-time with a fairly firm line on what the expectations are. Closer to home, there is still a wide range of working practices ranging from fully remote to varying hybrid arrangements, but the 'back to work' model is being reflected in certain UK sectors such as banking, along with certain professional services businesses.

But is the picture as clear as that? Regional Reit recently conducted a survey of its occupiers across 154 office of its office locations, which revealed office desk occupancy is now at 65%. This contrasts with 70% desk occupancy levels pre-Covid. Hardly a major shift.

Whether the approach is to require a full-time return or not, businesses with office assets must maximise their investments by attracting people back into the space. This means that there is a certain level of requirement for the physical environment that employees want and believe they require in order to perform effectively.

The pandemic demonstrated that the optimum working environment differs from one person to the next. For the most part, this now entails offering more than banks of desks and introducing the concept of ‘finding a space’. Whether it's a comfortable chair, a meeting room, or a canteen, the goal is to provide a variety of agile spaces that support new ways of working.

Demand, demographic and design are three key areas of workplace design – something discussed by director George Brennan at UKREiiF here.

This concept of physically changing the workspace has evolved over the past few decades, accelerated by increased diversity in workforces. Ensuring wheelchair accessibility or quiet spaces for those with neurodivergence, for example, were not foreign concepts prior to Covid, and these physical demands will continue to change in the future, so space adaptability will be equally important.

The wider implications of a return to office

It is a well-known fact that learning by osmosis in the workplace is extremely effective, assisting people in developing not only their technical skills but also their interpersonal and soft skills. It is also critical for staff learning and development at all levels, but especially for more junior employees and graduates.

Generational differences have never been more visible in the workplace, particularly among younger employees in the Gen Z demographic. Because jobs are plentiful in many sectors, it is often necessary to adapt to their aspirations in order to attract and retain good employees. This power dynamic, however, is fragile. If a company wants to drive a return to the office, it must prioritise what works for the company and engage its senior team to lead by example.

The changing workplace and getting people back into the office has a knock-on effect. This is reflected in the Deloitte study, which identified the West End as the London area leading the way in office renovations totalling more than 1 million square feet. This is attributed to the area's "rich cultural amenities", which translates as it provides more in the immediate vicinity.

This means that employees are more likely to return to the office because they can easily access what is nearby to suit their personal lives as well. However, the inverse is also true, even more so outside of London.

With a significant increase in home working, city and town centres are at risk of dying as a result of decreased footfall and economic spend. Major public sector investment is required to drive the repurposing of these spaces. We can no longer accept demolition of buildings as the default position, so we must look into asset enhancement to provide what each area needs the most.

Climate crisis drivers

Sustainability, as in most other areas, plays an important role. The climate crisis has had a far greater impact on the evolution of the workplace than Covid-19 alone, and this impact will not diminish as we progress towards net zero.

Energy efficiency is a primary consideration for businesses that use office space. Landlords and building owners face ever-increasing demands to attract and retain tenants, all while tightening legislation drives the achievement of net zero in accordance with government goals.

The Minimum Energy Efficiency Standards (MEES) regulations, for example, will mandate in England that office buildings be EPC C by 2027 and EPC B by 2030. This means that over the next seven years, a large number of buildings must improve their energy efficiency ratings, or they will no longer be able to be let for rent and will risk becoming stranded assets.

The developing legislation is causing change in the market with many organisations facing a choice between moving to more efficient space at lease end or weigh up the options between refurbishing existing assets and building new ones. The MEES regulations on the horizon are unlikely to be the only changes we see, and so action is needed sooner rather than later before assets are no longer usable in the same way.

As the younger generation of workers has a different set of wants from their workplace, they also have higher expectations within society and typically want to work for organisations that demonstrate strong sustainability initiatives and credentials. Therefore, businesses cannot underestimate the direct impact on recruitment – particularly for graduate and entry level positions – that investment into a more climate-friendly working environment brings.

So, what does this all mean for the workplace?

Simply put, that is what most organisations are on the journey of figuring out. Each of these journeys will be unique to their operations, assets and staff. Some sectors are expecting people back on a more or less full-time basis, whereas other areas such as local authorities are quite comfortable with hybrid arrangements. There are a lot of factors beyond the pandemic’s influence that must be considered both from a practical solutions and futureproofing perspective.

While the impacts are multiple, the one central lesson from Covid-19 is the importance of adaptable workplaces, which promote the most effective ways of working now but also into the future of an ever-evolving world.