People, property and the future of the office:

Are we at an inflexion point in the big remote working experiment?

Whilst the thinking on the use of the workplace has clearly evolved since the start of the pandemic, the future of the workplace debate is fascinating and in real time we are all finding our way and learning as we go.

With daily media headlines covering ‘the great resignation’, ‘the culture of an organisation’ and the importance of mental health and wellbeing, professional services firms are taking the opportunity to re-define property strategies and re-evaluate flexible working practices - or they are being forced to.

Firms are looking to make the best, often high-cost investment and long terms decisions that can have a fundamental impact on their people and therefore the future of their firms. Greater flexible working means access to wider talent pools, but brings added cost of improving technology and concerns over training and maintaining culture. Are these decisions being based on foundations made of quick sand or is there evidence can we draw on?

People & Property 3.0

On 25 November we hosted our third online event to continue discussions and share learnings around the future of the workplace, unpicking some of the complexities surrounding the decisions professional services leaders are being required to make. Chaired by Anna Jarrold, it was a fascinating discussion where our expert panel shared their own perspectives on this complex, multifaceted topic.

Our panellists:

  • Judith Mohring: a clinical psychiatrist and wellbeing expert. Judith has been working with individuals and organisations throughout the pandemic, approaching the discussion from a health and wellbeing perspective.
  • Carlos Posada: an advisor to professional services firms on the design of their workspaces. Carlos is Principal and Legal Leader at Gensler and shared his client experience.
  • Paul Eagland: as BDO’s managing partner in the UK, Paul shared his personal experiences of leading BDO into hybrid working and investment decision making.
  • Mat Oakley: Head of Commercial Property Research for UK & Europe at Savills UK. Mat shared his research on property occupancy rates and the factors influencing office occupancy.

Below we explore some of the key themes that came out of our discussions with the experts and you can watch the event recording here. Unsurprisingly there is no one size fits all but we can all benefit from sharing the latest thinking and learnings to date.

WATCH THE RECORDING

The backdrop

The is no denying that the pandemic has been hugely stressful. The unpredictable nature of this has caused high levels of uncertainty, a threat to people’s ego’s and our sense of control has been lost. Judith explained that social anxiety is at a high. With evidence showing that social isolation shrinks people brains, solely working from home through a screen created a more transactional life.

On the flip side, there is a mixed picture across professional services firms in their reporting of success in encouraging their staff back to the office. Mat shared research from Savills that shows occupancy rates in UK offices across the economy were averaging only 20% in November 2021 – and this was before anyone had heard of the Omicron variant of COVID-19. This is way off pre-pandemic rates and large offices with lots of empty space is unsustainable, but it is also leaving leaders trying to predict if and when this will increase.

The office workforce responses however have been different across the globe. The UK and the US have seemingly taken a different approach to the rest of the world in returning the office - both countries are significantly behind compared to other jurisdictions in reaching pre-pandemic office occupancy levels - which is a trend Mat has observed in his research particularly for cities or areas heavily reliant on public transport.

Decision making should be human centric

Its no surprise that those who are returning to the office are in search of human connection and this is especially important for professional services firms where the future workplace must provide a magnet for learning, which has been compromised virtually. Judith explained that the return to the office also brings with it a rich cognitive environment by creating more choice in our daily lives. She referred to this as ‘the buffet of life’ – “What shall I have for lunch and where from”, “Who will I bump into today”, “Which way should I walk home”.

Carlos’ advice to his clients is always that decision making needs to be human centric. Addressing the needs and wellbeing of individuals who are going back into the workplace is important, especially now in this new hybrid working style. Face to face interaction is important for learning, mentoring, culture and collective innovation and as Carlos put it, the office is for the three C’s - congregate, collaborate and connect.

There was recognition across the panel that workforces are diverse and no firm’s culture or workforce is the same. Carlos’ approach with his clients has been to focus on experience rather than the type of space, which requires a deep understanding of how people use different spaces in different ways and then matching recommendations to a particular use, department, or type of person. Paul agreed that understanding the needs of different demographics in the firm is important and he shared insight from the numerous intimate listening events he has chaired at BDO to understand different groups needs and perspectives. Alongside staff surveys and other measures, these insights have helped guide him and his BDO leadership team to make clear and timely decisions, despite the multitude of dilemmas presented.  

“Nobody has all of the answers”

Decisions around future workplace strategies are complex and they can throw up lots of dilemmas. The panel were in consensus that during this time, firms and individuals should all be encouraged to test ideas, learning as you go and not being afraid to pivot (quickly). This can be challenging when high investments are being made, so we asked the panel how firms can balance this:

  • Judith advised that we need to become comfortable with bumpiness as the uncertainty prevails
  • Paul shared the importance of using both qualitative and quantitative data to guide sensible decision-making
  • Carlos suggested learning from other sectors and running small pilot schemes, say on 25% of an office floor for 6 months and then review the success
  • And Mat suggested delaying property decisions where possible, as its currently difficult to predict how far occupancy rates will bounce back to pre-pandemic levels. This is not necessary good news for property developers and landlords, but CEO’s and Head’s of Real Estate have tough decisions to make.  

Better quality space, not less

The trend has not typically been for businesses to downsize space and even when reducing square footage is the goal, there has been a big shift in firms looking for better quality space with an eye on the environment. This is largely being driven by the ESG agenda and a desire to offer the most attractive working environments.

Hub and spoke models have been talked about for some time as the cost of real estate has been soaring in popular cities. We may see firms start to adopt this approach as we all become more comfortable with hybrid working and a focusing on what tasks we do in what environment.

Where to invest

Historically professional services firms have spent more on property than technology. Going forward, equivalence of experience is going to be imperative to help level the playing field that mass remote working enabled. To achieve this, technology and property must work together, and seeing these two things as one investment rather than separate decisions to support the overall business model of a firm is beneficial.

Mat reminded our audience that in a professional services firm, staff are biggest cost. And so trying to negotiate small savings on property at the expense of the big cost is counter-initiative. Judith added to this by saying that the focus should be on getting property and technology to interact with people effectively – but there was no denying that getting this investment balance right is a complicated equation.

An example of this could be the new desk booking app introduced at BDO. Paul explained that through the listening events it was clear that people’s desire to sit with their team members was a must in implementation of this technology and the ability of the app to create neighbourhoods has been successful so far.

Finally, the art of choice

An overarching theme from the discussions was choice and how leaders can empower individuals to make the best choices to balance the needs of their own personal wellbeing, their teams, their clients and the organisation. The consensus was that offering more choice is a good thing, with Paul explaining that he is “backing our [BDO’s] people to intelligently feel their way through this” with accompaniment of a framework that guides staff to make personal choices that are right for their team and the overall philosophy of the firm.

Overall we know there are some vital components for human health and wellbeing including walking and fresh air, access to greenery and social interaction. With the emphasis of choice being shifted onto the employee as we have discussed, how leaders can factor in these elements to create environments and policies to encourage their staff to make the best choices so they can thrive at work will be key.

The elephant in the room – the commute!

A commitment to hybrid working is generally seen across the board in the professional services industry, with offices firmly playing a role and appreciation that the space may be used differently going forward. There was no disagreement amongst our panel that a good working environment improved productivity and wellness. Views differed about how much of a barrier the commute is to returning to the office. Some find it beneficial down time and others hate it, but with a hot job market, applying pressure to people can be problematic, but without people spending the right balance of time together, in person, how do firms create the culture they want, along with innovation and meet the development needs of the team?

The big social experiment continues…

We have explored a range of matters from the impact that leaders decisions can have on the wellbeing of our people and how the culture of our firms can continue to strengthen, all the way through to the future of the office environment – and whether there is one.  

What is clear is that we will be grappling with uncertainty for some time to come, and with change comes opportunity. Ultimately, hybrid workstyle and physical space needs to grow with workplace culture and support an organisations business model.

If you are interested in joining our future professional services events for business leaders, please find more information here.

Find out more:

Need advice?

Get in touch to discuss how our industry experts can help your business.

Contact Us

Services

We can help your firm address accountancy, tax and wider business and strategic issues.

Services

Events

Find BDO events near you.

Events

Operating in the new reality

Practical guidance for managing your supply chains, your workforce, your sales and financial health.

Rethink Hub