Are traditional workplaces becoming obsolete?
New technologies are transforming where, how and when people work, which has already led to reduced demand for conventional office space
Is the end nigh for the traditional corporate model in which office-based workers follow a 9-5 schedule in a fixed location? If so, what effect will this have on productivity? And how will the workspace revolution, as many refer to it, affect demand for commercial real estate?
These were some of the questions raised at the SA Property Owners Association (Sapoa) annual convention held recently in Durban. A key theme that emerged was that if companies want to retain the best talent, the office should no longer be viewed merely as a place to work.
"It’s now all about creating high-performance, collaborative workspaces to keep employees happy and productive," says Rudolf Pienaar, chief development and investment officer of JSE-listed Growthpoint Properties, one of SA’s largest commercial landlords.
In a panel discussion on productivity in the modern office environment, Pienaar said there had been a huge increase globally in demand for "green, smart and well" buildings – not only to meet the rapidly evolving needs of a tech-savvy and connected workforce but also to boost productivity and worker satisfaction.
He said collaborative workplaces also increasingly encompass lifestyle and leisure amenities. Google’s HQ in Mountain View, California, widely regarded as the poster child for innovative workplaces, offers employees nap pods, playrooms and free, on-demand food and beverages.
Health and life insurer Discovery’s new head office in Sandton is another case in point. The 112,000m² state-of-the-art, five-star green-rated building, co-developed by Growthpoint and Zenprop, offers employees a range of on-site lifestyle facilities and 20 retail outlets and restaurants. These include a Woolworths, a Starbucks and a Clicks, a gym, a rooftop running track and yoga decks, as well as chill zones and breakout areas.
However, while some corporates are splashing out big money on creating interactive work, eat and play spaces to keep employees engaged, the general office trend globally is one of downsizing. Zinon Marinakos, MD of DSA Architects International in SA, says more efficient use of office space to save costs is now top of mind, with most corporates requiring far fewer square metres per employee than a decade ago.
"Traditionally, companies took up 10m²-15m²/employee. The norm is now 5m²-7.5m²/employee," Marinakos says.
But he notes that smaller work spaces for individual employees in open-plan layouts are being counterbalanced by additional communal spaces in the way of "quiet" rooms and private meeting pods.
Marinakos says digitalisation and new technologies are also compelling architects, designers and developers to "future proof" their buildings. "Buildings have to be flexible and intelligent to enable companies to expand and contract space easily as they evolve."
Technological advancements in artificial intelligence, self-drive vehicles and mass transportation will no doubt also influence how and where we live, work and shop.
Craig Smith, head of real estate research at Anchor Stockbrokers, expects increased digitalisation to support the trend towards flexible and shared work spaces, which could potentially disrupt the traditional landlord/tenant model.
"Increased uptake of shared or co-working products may further affect the rate of growth in overall demand for office space as corporates potentially require even less space per employee," says Smith. He refers to IBM, which recently relocated around 600 employees in the US to one of WeWork’s shared office buildings. "Other corporates such as Microsoft have also entered into agreements with the likes of WeWork for a shared working offering."
A recent survey by International Workplace Group (IWG), the Swiss-based parent of leading workspace companies including Regus and Spaces, confirms that flexible and shared spaces are no longer the preserve of techie start-ups.
People from Seattle to Singapore and London to Lagos no longer need to spend so much time in a particular officeMark Dixon
"Some of the world’s most successful businesses such as Etihad Airways, Diesel, GSK, Mastercard, Microsoft, Oracle and Uber have already adopted a flexible workspace approach," says IWG founder and CEO Mark Dixon. In a study among 18,000 professionals across 96 countries, IWG found that 70% of employees are working somewhere other than the office at least one day a week. More than 50% work remotely for at least half of the week. Dixon says the emergence of the mobile workforce has been driven by technological change, globalisation and changes in employee expectations.
"People from Seattle to Singapore and London to Lagos no longer need to spend so much time in a particular office. This is a huge shift in the workspace landscape globally, and businesses are now looking closely at what this means for their corporate real estate portfolios."
According to the IWG study most businesses believe that offering flexible working strategies to their employees has boosted productivity, competitiveness and profits. Attracting and retaining top talent was also cited as a major benefit, given that a flexible working approach reduces commuting time, among other benefits.
What it means
Technological advancements will influence how and where we live, work and shop
Local property players including Growthpoint, Redefine Properties and Investec Property are already offering shared or "offices-on-demand" in key business hubs. Linda Trim, director of FutureSpace, a joint venture between Investec Property and Giant Leap, says their shared office product in Sandton is attracting an array of big corporates, entrepreneurs, independent consultants and others who need to work outside the company head office from time to time.
The concept typically works on a pay-as-you-go basis. Says Trim: "Co-working has become a symbol of community, connectivity, efficiency and networking. Not to mention it’s a cheaper alternative than leasing in a traditional office space."