The inevitability of change

What Leesman learned over the last decade about hybrid working from more than one million employees.

When it comes to work and place, the period since the start of the pandemic has been dominated by one, over-riding subject: hybrid working. The pandemic gave employers and employees alike little choice: work was abruptly shifted from office to home, in many cases literally overnight.

Yet while lockdowns are behind us, confusion and debate around what, and for whom, the office is for, is rapidly heating up, as likely to be being discussed at a mum’s toddler group or down the local pub as in board rooms or now even the mainstream business press. Hybrid working has quickly become embedded, leaving employers and the real estate sector rushing to catch up.

However, even a passing glance at workplace data from the last decade makes it clear that many of the impacts on real estate and workplace design of the mass adoption of hybrid working should not be a surprise.

Leesman’s surveys, first started in 2010, and the subsequent research have created a vast database and benchmark. They provide valuable insights on workplace design and its impact on employee behaviour, and are used by the organisations who have adopted our audit methodologies to help them create better work environments. It has also left us with an extraordinary wealth of data showing trends as they develop in real time.

From 2020, we expanded our focus to include not just physical workplaces but hybrid working too; in just three years, the Leesman Home Working methodology has collected data from more than 380,000 employees worldwide.

Most importantly, this means Leesman is uniquely positioned to deeply understand what is happening in the world of work, not just in the last three years but to understand how that differs to the preceding decade.

We know what has worked. But we also know what hasn’t worked – and still isn’t working. And we have a pretty good idea of what’s likely to come too and at what pace, enabling our clients to be ‘future ready’.

Offices haven’t been working for a long time
Leesman asks employees about their workplace and how they support their work activities. We have 21 standard workplace activities within our assessment technique. We also have a series of lines that probe typical corporate outcomes, like sense of pride or personal productivity.

Some of these activities have been mathematically proven to have a statistically stronger influence on those outcomes. We term these ‘Sentiment super-drivers’. They are the wiring to a successful workplace experience – but as far back as 2018, long before the first Covid-19 case, of the five ‘Sentiment super drivers’, just one was better supported in the average workplace (‘Learning from others’). The remaining ones were all better supported at home: ‘Planned meetings’, ‘Individual focused work, desk based’, ‘Relaxing, taking a break’, and ‘Thinking/creative thinking’.

If we take a wider view, just four out of all 21 activities were better supported in the average office.

In other words, space designed for living was supporting the activity of work better than spaces specifically and exclusively designed for work.

In particular, our research has highlighted a group of important activities where the difference between where they are best supported is less dramatic. Things like ‘Collaborating on creative work’, or ‘Informal unplanned meetings’. Firms need to focus on making these activities better suited to the office than the home if they want to win back workers.

One other thing worth noting: since 2013, the support agreement for two of the bedrocks for high-performance work – ‘Individual routine tasks’ and ‘Individual focused work, desk based’ – have seen their scores improve by just one per cent. In other words, the real estate industry, its supply chain and designers have done little to nothing to improve employee satisfaction in these two extraordinarily important functions over the last decade.

The new normal is not that new
Hybrid is about location autonomy: it is principally about where people work, rather than how or when they work. And contrary to what you might think skimming the return-to-office debates in the broadsheet business papers, the pandemic did not invent hybrid working. Our data shows that between 2016 and 2019, 68% of employees stated they were working in a hybrid way, up from 64% in 2013. The majority of knowledge workers had some experience of hybrid pre-pandemic.

Hybrid working was not an outlier in the years prior to 2020; it was a growing trend that would be accelerated by the pandemic. The difference post-pandemic is how much time employees are permitted to spend working in a hybrid way. By 2022, around 82% of employees said they had freedom over how they do the work related to their job, while 77% said they had freedom over where they do the work related to their job.

Noisy workplaces remain…noisy
The other big task offices need to tackle, and have repeatedly failed to over the last decade, is acoustic privacy. It surfaced as an issue in 2013, and has featured ever since. Yet a dissatisfaction with noise levels has the strongest correlation to an employee saying that the design of their workplace does not support their personal productivity. Yet its negative impact is ignored by most.

Workplace noise levels are productivity killers and employees are continuing to find that the home work setting better supports pretty much any activities that require, or benefit from, acoustic privacy. In 2013, 76% of employees said workplace noise levels were an important feature, but just 28% were satisfied with them. By 2022, importance had fallen to 68% and satisfaction risen to a still measly 36%. Our view is that this minor increase in the satisfaction of in-office noise levels is merely because employees are undertaking the activities that benefit from acoustic privacy away from the office.

Our research points to this being the biggest issue for any employer looking to pull workers back into the office; if noise levels are important to 68% of employees, far more than just 36% of them need to be satisfied with noise levels in the office when they get there.

Communication will never be the same
In 2022, when asked about importance of activities and features related to communication, ‘Telephone conversations’ were important to 55%, down from 60% at the start of the pandemic, while ‘Telephone equipment’ had fallen markedly, to 34% from 42%. In contrast, ‘Video conferencing’ had nudged up, to 51% of employees saying they were an important activity.

In the context of the pandemic, these are not surprising numbers. But in fact, the pandemic has less to do with it – both the growth of video and the decline of telephone are a continuation of a trend first seen a decade ago. ‘Telephone equipment’ and ‘Telephone conversations’ have been tracking down for a decade now, from around 84% and 78% respectively, while ‘Video conferencing’ has been on a fairly steady upward trajectory, from its base in 2013 of 32%.

The surprise is that neither the workplace design industry nor real estate sector have seen this coming, or reacted to it in the design of space to accommodate it. Yet the importance attached to ‘Video conferencing’ is poised, based on the ten-year data, to exceed the importance of ‘Telephone conversations’ later this year. It means that video will be the primary communication for many employees in the workspace.

Only connect
Another key feature of hybrid working is how to ensure workers can collaborate and interact, both professionally and socially. It is a debate that continues, with no immediate answers.

The data does help, of course. Based on our Leesman data, two of the activities central to the social fabric of an organisation are ‘Informal social interaction’ and ‘Learning from others’. Each has lower support scores at home compared to the office (27 and 14 percentage points lower respectively). Yet the importance of both has moved little since 2020.

In contrast, the importance of ‘Hosting visitors, clients or customers’ – another activity seen as key to a company’s social fabric – has fallen more sharply, to 21%. It is a trend that has been in play since well before the pandemic. It is doubtful it will ever reach 0 per cent, but as we all become more used to, and better at, collaborating online, and especially with many companies still limiting travel, that decline is set to continue.

The importance placed on ‘Informal social interaction’, meanwhile, dropped from 50% in 2013 to 44%, while ‘Learning from others’ has dipped to 43% from 51%. ‘Informal, un-planned meetings’ has fallen to 50% from 68% over the decade. These three data points suggest a need for organisations to consider the role of the physical workplace in better supporting employees connecting and being together.

Organisations should be wary of lazy assumptions around collaboration. Back in 2018, our data was already clearly showing that focused work was the foundation of collaborative work. This remains as important in 2023. Companies considering making the corporate centre the hub for collaboration and social interaction as part of their hybrid working strategies need to keep this in mind. Few employees are able to be fully collaborative for a full working day the workplace must still support the focused work they will be doing. Our data has long shown that if an employee could not say that their workplace supported focused work, they would similarly state that it did not support collaborative work either.

The Hybrid Future
It is hard to argue that the future is not a hybrid one – the pandemic has simply accelerated the long-term trends. In the first quarter of 2022, 36% of employees stated that they were likely to be office based for only one-day per week or less.

This had jumped to 41% by the final quarter of the year. There may be some seasonality hidden amongst those figures, but its hard to deny that the pandemic has thrown into sharp relief the many areas where the office is failing.

Corporate real estate leaders may have already resigned themselves to this fact. According to a poll carried out in the fourth quarter of 2022, 69% said they intended to reduce their real estate footprints over the next 18 months. If just half of the office occupants in London were to react similarly and reduce their real estate footprints by 40-50% in response to lower employee demand, that would see 57m sq ft of London office space fall vacant within the next five years – more than the total office space of the UK’s next three biggest cities, Glasgow, Manchester and Birmingham, combined.

This all points to a future with less corporate office space – but that space will need to be significantly better, designed around the employee and enable a superior experiential day when that employee choses to be there, be that one day a week or five. Because offices will now be competing with millions of new locations: employees’ own homes.

How a hybrid future is going to impact employees, employers and indeed wider society is not being discussed widely enough. It is in part why Leesman has launched a three year longitudinal research project in collaboration with MIT’s Center For Real Estate, to try and understand what hybrid working will mean for its three stakeholder groups: people, place and society.

Our data from the last decade has shown years of shifting trends, development and change – the focus now is trying to understand what our hybrid future will hold.

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