We’ve come to the end of another season of Looking Forward, but there’s still time to look back in our season wrap-up. Host Ryan Anderson puts a bow on Season 2 by sharing new data that challenges listeners to shift their focus from returning to the office, and toward a reimagining of the office for this new era of work.
Speaker 1 (00:06):
This is looking forward conversations about the future of work brought to you by Miller. No.
Hey friends, we’ve come to the end of season two of looking forward, and I’ve been blown away at the caliber of guests we’ve been able to feature. As you’ve heard, we’ve traversed a lot of topics, the spheres of human resources, real estate, technology, leadership, and more as we unpack the future of work. But to close this season, I’d like to spend a little time specifically talking about the current and future state of the workplace, much like I did in the season opener, but with the benefit of lots of new perspectives and some new data. So first us, let me just acknowledge that in many cities around the world, the state of the workplace is actually similar to how it was before The pandemic. We don’t talk about this a lot, but if we consider cities like Seoul or Riyad or Hong Kong or even some smaller cities in the US office, occupancy levels are approaching pre pandemic levels.
If we’ve got the data, sometimes that data’s not available, but the design of those spaces doesn’t feel like it’s fundamentally changed a great deal, but it’s definitely different. It’s a different story in many larger cities around the world, particularly here in the us. And we do believe that a fundamental change to the workplace is underway. And as it occurs in those larger markets, it’s likely to spread to others that might not yet be feeling this change. So what I want to do is unpack the short term and long term considerations of what’s occurring in an attempt to provide useful guidance for you and your organization as you look forward. Let’s start with the short term. In many cities around the US and the world office occupancy levels are low. RTO mandates have either not been successful or in some cases have really backfired. As a result, many corporate real estate leaders and facility managers, facilities directors that I talk to are being pressured by CEOs and other leaders to fix this, which implies that the issue somehow lies with them, right?
With the design or the management of their space. And I don’t believe the best evidence supports this, and to be blunt, I don’t think that it’s the job of the corporate real estate and facilities teams short term to somehow get people in the office. Let’s consider a little bit of data in terms of why I’m saying this. Our team, the global research and insights team at MillerKnoll, we conducted a pretty simple survey in September of 2022. So very recently just to establish a baseline for why people might choose to stay home versus come into the office on a given day. We asked a sample of a thousand people in the United States only There were representative generally of the US census data, and they worked for employers who have embraced hybrid or flexible working policies. We asked them this question, What are the factors impacting your decision to not work from the office on a given day?
We had 889 people respond, and the data indicated that there’s not just one reason. There’s multiple reasons that affect these decisions. In the order of importance, they were tied for first two things, commute, time and cost. So the effort and the money that goes into commuting. And second, overall mental, physical and emotional wellbeing. Third, those other two were tied for first. So third was caregiving responsibilities. This isn’t just childcare, this is elder care and pet care. Fourth was schedule and flexibility, too many meetings. And then there were other factors as well that weren’t quite as impactful. But fifth on the list was no local office near me. However, that person defined near. And then six on the list was that the design of the office doesn’t suit my work preferences. So it was on there, but we know that the design of the office isn’t the primary reason why people aren’t coming into the office right now.
I should also note that all of these factors were noticeably less impactful for older people as people got into like their fifties and beyond, the impact of these factors dropped, which we believe relates to life stage older employees who might be empty nesters or have more discretionary income wouldn’t be as affected by commuting costs or caregiving responsibilities as an example. So when we got this data, we began to correlate it with secondary research. We found that commuting specifically came up over and over. As an example, our friends at Leeman published a piece this summer titled It’s all about the journey that correlated commuting time with the desired frequency of office use, and found that the amount of time that people intended to go into the office declined significantly the farther they are away from it, which makes sense. What’s interesting is despite all this office occupancy levels are on the rise, but they’re a rising slowly, Our belief is that most employees are working through these issues as best they can to spend more time in the office, particularly with one another.
But the changes are occurring gradually. Human patterns of behavior do change slowly, and just because we all fled the office, what we fled everywhere, right? Due to a global health crisis in 2020, doesn’t mean that people are gonna totally disrupt their lives again in an instant. I think this is one of the reasons, by the way that wellbeing popped up so high on the list. People wanna preserve a degree of balance in their lives. So organizations should as best they can, try to show some patience and embrace a gradual RTO. Maybe G RTO is our new acronym, but we need to recognize that it’s more like watching the growth of a bounce mutual fund than it is a stock ticker when it comes to office occupancy numbers. And instead, maybe we should really double down on a longer term focus knowing that some of these things will take a while to work out. And hey, don’t get me wrong, there’s things like location strategy in terms of where these offices want to be to minimize that commute time that are very significant things that should be considered in the short term. But in terms of workplace design management, what it means to really deliver value, I think a longer term focus might actually be a lot more valuable.
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There is one other short term consideration though that we should talk about, and that’s that organizations should seriously consider how to provide better support for employees while they’re working at home. And that’s something that should happen now, not in a few years, particularly if it feels like it’s gonna take a while for workplace changes to occur. And I should acknowledge that some of you are probably thinking that this is me trying to promote the sale of Herman Miller, Aron shares or Noel Regeneration shares to people in their homes. I will unapologetically say that we have a program that makes it seamless for organizations to provide those sort of products to people at home with contract discounts. But this isn’t the blog. I’m actually talking about something broader than that. I’m talking about really holistically trying to figure out how to help people be productive and healthy at home.
Like let’s start with something like training. What does it look like for an employee who’s feeling burned out or socially isolated to get help to raise their hand in a discreet way? And do employees know how to be healthy, how to ergonomically take care of their bodies while working from home? If they don’t have a high adjustable table, as an example, go stand up. Take your laptop to the kitchen counter for 20 minutes, or go get some fresh air on the patio to combat a stressful workday. The point is, if organizations are serious about supporting flexible working, then they do need to take responsibility for the 40%, 60% of the work week where someone’s working outside of the office because the numbers suggest that this is a long term part of the employee experience and those employees are important. Let’s shift to the long term focus, cuz I think this is maybe where the conversation can get really interesting for organizations that aren’t currently talking about it.
This is where organizations can begin to put energy to make the most of what’s happening. Now in the short term, while I noted that the office might not be the reason why people are staying away right now, the design of the office is still very important. It can have tremendous positive results long term. And despite what you read in the media, the vast majority of employees do want to spend some quality time in the office. As you probably know by now, Miller Knoll is a founding partner of a research consortium focused on the future of work called Future Form, along with Slack and Boston Consulting Group and a group called MLT. Of the 10,000 employees globally that we surveyed last quarter, and we do this every quarter by the way, of those 10,000, only 14% wanted to be fully remote. Now they can be a vocal bunch, but 14% of a hundred isn’t the majority.
In fact, 20% a higher number want to be in the office full time. We don’t hear from them them very often. And 66% prefer a hybrid arrangement. And for those that want to spend time in the office, what do they want from it? Well, 74% say they want to spend time with coworkers, quality time building, camaraderie, meeting in person. 16% say that having a quiet space to focus on getting work done as a top priority for them, 10% say putting in FaceTime with their managers and leaders is a primary purpose. And that might be for things like career advancement, but it’s also just to have a better sense of what’s going on in the company, get some mentorship, get some development. So you can see where this is going, right? It’s about helping people to either focus or to connect. And I think it can do both in terms of focus.
The open office got too open during the same years that collaboration became less synchronous. So finding that place for heads down work can be really tough. And we know from another data set from the 28,000 people that have used Herma Miller’s work from home tool, that finding focus at home isn’t always guaranteed, particularly if you live with other people, have pets, have construction nearby order from Amazon, or have an internet provider that sometimes lets you down. There’s a lot of reasons. And so it is really great to have a place to truly focus. I’m not just talking about an open desk, but a place to do like three hours in a spreadsheet. But let’s go deeper into the connection, that desire to really spend quality time with other people. The simplest way I can put it is this, The office has to become a place that strengthens community and promotes belonging.
And I know you’ve heard me say it before, but in a world where people can be productive in any number of locations, the primary return on corporate real estate investments is the degree to which these spaces bring people together. That my friends, that’s the North Star. But there’s a significant hurdle that I think we got into this season. It’s a big one that we need to talk about a little bit more, that needs to be overcome for us to get there. And it’s this, most people who design or manage workspace don’t know a lot about the people who use them or the work they do. To put a finer point on it. Offices have been designed for far too long based upon a very rudimentary set of assumptions about the work that’s actually done there. And this has chipped away over many years before the pandemic its ability to deliver value.
I think we’re already feeling that and we’re gonna be feeling it even more in a year or two unless we begin to correct that. Now, for those that want to offer really high value places of work that employees love and that contribute to a stronger culture, they need to get immersed with employees. That’s the only solution. This can include surveys. We’re a fan of surveys, We use surveys, but it should entail a lot more than surveys. It should entail a lot of conversation. Anecdotally, I’ll tell you that while I have the benefit of a full team of researchers looking into a wide array of topic, I still make time to talk with at least a hundred customers per year. Usually quite a few more than that. Why? Well, it helps me to see beyond the statistics, beyond the reports. It’s important I can connect and understand at a much deeper level through conversation and facilities and real estate teams need to do this with their customers.
Who are the employees? It’s not really the organizational leaders, it’s the employees, right? The number one investment organizations make. If real estate’s number two, employees are, number one, the real estate needs to serve the employees. Now, if you’re in one of those roles, facilities, real estate, interior design, you don’t get a chance to regularly spend time with groups of employees. Start simply begin by asking for time with teams. Start asking them just questions. Tell us about you. Tell us what you do. Show us what you do. Tell us how your team spends the week. What activities are really easy for you to accomplish? Or which ones are really tough? You know, what challenges do you face using our spaces? I wouldn’t start with the spaces, but you want to get there eventually. Do they feel like the spaces are spaces where they can just be themselves, say to an employee, Do you feel like you can just be you in our spaces?
Or do you feel like these spaces were designed for somebody else? And you’ve gotta fit that mold. The more you immerse yourselves, the more participatory this process gets, the more the organization’s able to be inclusive in its approach to workplace, and then people are more likely to find value in it, to feel invested in it, and to use them over time. I know it’s risky to ask people for their input. You don’t have to deliver on something right away, but if they feel like they’re heard, their level of emotional investment in these spaces goes up. And that’s one of the keys to solving the longer term questions about occupancy. I recognize that might sound like a lot, but that’s okay if we’re taking a long term focus. In fact, this might be the perfect time to advance on that journey. Most organizations don’t have the capital to overhaul all their spaces or the information for that matter they would need to do.
So. What if we use the second half of 2022 to its fullest by beginning to adopt a new longer term vision for the workplace as somewhere that not only supports key work activities, which it needs to do, but strengthens your community of employees and promotes belonging. The next step would be to figure out how to get in closer dialogue with the employees. You might have to work through it, but that’ll lead to a deeper understanding of how they work, which in turn provides you the chance to pilot and evolve your portfolio, your workplace strategy, including the improvement of both corporate and home workspaces to really deliver long-term value. And if collectively we can do that, then this will have been an incredibly valuable time rather than a time of ambiguity and concern. So let’s maybe lighten up our focus on returning and focus on reimagining. With that, let’s put a bow on season two. If you have questions or if you need help, you can drop us a line at [email protected] and I’m looking forward to connecting with you again in season three. Thank you so much for listening.