Long-term leases have traditionally characterized the world of commercial real estate, implying long-term planning and little opportunity for flexibility—a reality directly at odds with what’s likely to be required for office spaces if hybrid work is ever to achieve its potential. So is there any hope of reconciling planning and flexibility?
Dan Kirschner, global head of growth and business development at commercial real estate company JLL, believes there is. Enterprises have to move beyond false choices between employee experience—the focus of the post-pandemic hybrid work movement—and traditional financial considerations, he told Workspace Connect in a recent interview.
The need to support a hybrid of remote/in-office work “is no longer speculation. It’s a realistic need,” he said. Knowledge workers will continue to be in a position to say to their employers: “I made the investment to commute today. What makes it such that I want to do that tomorrow?” he added.
This question is only becoming more critical, according to data from JLL research. The company’s most recent
Workforce Preferences Barometer study showed that quality of life/work-life balance is now the most important consideration for employees, surpassing salary, which ranked number-one pre-pandemic. The second-most important factor is now: “Working in a company that supports my health and well-being,” which jumped from fourth place pre-pandemic to second as of April 2022. Salary now comes in third.
How are employers doing when it comes to meeting these employee expectations? Not too well. The JLL research shows that less than half of respondents—48%—said their company is a great place to work today.
These trends, together with what Kirschner called their “hyper acceptance” at the C-level, mean the move to the hybrid model is likely to endure even in the face of an economic downturn that might otherwise shift leverage more toward employers, he said.
At the same time, however, enterprises can’t ignore the bigger economic picture as they execute their hybrid work strategy. “If you have investments that need to be made in this space, to make them inspiring, how do you do it in a way such that it’s not just a net bad guy to the shareholder?” he said. In other words, there’s a limit to how much “more tech, more A/V, more yoga mats” can be thrown at the problem.
Moreover, enterprises have to strike this balance between experience (for the employees) and efficiency (for the employer) within the context of a discipline—office occupancy management—that has historically relied on long-term leases and three to five-year forecasts that have rendered office space planning “stale” and “very tactical,” Kirschner said. Facilities planners have typically built-out a space to fit “that one time snapshot of demand.”
JLL’s response to the need for a new, more flexible model is a system it calls
Dynamic Occupancy Management, which it has been piloting with about 30 clients since its launch in February 2021. Dynamic OM combines space booking and reservation systems with attendance and utilization tracking, adding a layer of AI for space allocations that Kirschner said provides a “smarter way to figure out where people should go in the building.” The system aims to manage the reallocation of this space in real-time based on the actual occupancy—not just how many people are in the space at any given time, but also what their roles are and what type of space they require. The result is that facilities planners don’t just track people in seats but can partner with HR and IT for a deeper understanding of how employees use the space.
Dynamic OM promises that the enterprise could make significant space reallocations quarterly instead of every three to five years and could, for example, temporarily decommission some fraction of its space if necessary, Kirschner said.
The final component is “upskilling” the teams that manage space allocation so they can support this more dynamic process, Kirschner said. That means using data, partnering with HR and IT, and moving the focus from the back office to the front office, where the workers are.
“It’s people, process, and technology,” Kirschner said.
