By Shantanu Mohan
June 26, 2018
This research provides proven practices to encourage collaboration and allow remote working.
For application leaders responsible for enhancing employee effectiveness as part of digital workplace programs:
By 2020, organizations that support a choose-your-own-work-style culture will boost employee retention rates by more than 10%.
By 2021, the increase in the number of employees who prefer to work remotely will allow organizations to support 40% more workers in the same amount of space as they use today.
By 2020, 25% of organizations will have a catalog of smart workspaces maintained by IT, real estate and facilities management.
The kinds of workspaces an organization’s leadership provides its workers speak volumes about how much they value their employees. Numerous studies explore the relationship between the physical space and the employee experience. 1 They establish that employees who enjoy their physical work environments are more engaged, productive and happy. Nearly 7% of workers said that physical workspace would be a major factor in considering leaving for a position outside their current organization. 2 An engaged workforce is pivotal for a successful transformation to a digital business.
Gartner analysis of digital workplace initiatives in numerous organizations reflects the growing importance of workspaces in the digital workplace program (see “Global Digital Workplace Programs Exemplify Promise and Progress Worthy of Emulating”). Crafting digital workplaces that enhance employee effectiveness requires the collaborative efforts of IT, HR and real estate/facility management (RE/FM) leaders (see “Build Your ‘A Team’ to Lead Successful Digital Workplace Programs”). The digital workplace is intertwined with the physical workspace. Digital experiences are mediated through apps on devices, and devices are part of the physical workspace. Increasingly, their form and position in the physical workspace impact the employee experience.
Traditionally, both IT and RE/FM leaders focused on the legacy of the “one-size-fits-all” approach for both space and technology. The gray cubicle was standard issue regardless of the work people were doing. IT and RE/FM had separate budgets and were populated by people with very different skills.
Today, application leaders who understand the changing business context of “office space” are better able to respond to technology service demands — network access, mobile applications, digital signage and so on — while contributing to a more-engaging employee experience. Digital workers can literally work from any place and at any time. IT is the technology enabler; the RE/FM teams drive the design of the space. All are working toward a shared business outcome that cannot be realized unless they pursue it together.
Recognition is growing that application and RE/FM leaders jointly own the responsibility for combining the virtual and physical to create an environment where employees are excited to work (see Figure 1).
Figure 1. Impacts and Top Recommendations for Application Leaders
Source: Gartner (December 2017)
Include Well-Designed Workspaces in Digital Workplace Programs to Attract Talent, Inspire Creativity and Increase Collaboration
Space design has a powerful impact on the people who occupy it. The physical attributes of space can encourage behaviors such as collaboration and creativity, or discourage them. Unfortunately, only 11% of respondents to the 2017 Gartner Digital Workplace Survey said they were completely satisfied with their workspace (the mean level of satisfaction was 5, where 1 = completely dissatisfied and 7 = completely satisfied — see Figure 2). The same survey reported that 38% of employees can choose from multiple workspaces when in the office, yet 29% cannot and wish they could. 2
Application leaders responsible for digital workplace programs (hereafter called “digital workplace leaders”) can address this deficit. They can create greater employee satisfaction by incorporating the principles of activity-based working (ABW) into their workspace design.
Figure 2. “How Satisfied Are You With the Physical Workspace Your Organization Provides You?”
Base: Work from office (n = 3,012)
Source: Gartner (December 2017)
The average age of an office building is 60 years. The private office has existed for more than 80 years, and the cubicle for more than 50 years. 3 ABW leaves these antiquated notions behind and instead provides people with a choice of work settings. With ABW, people do not have a permanently assigned space — they move throughout the office choosing whatever type of space fits what they are trying to do, as well as their personal preferences.
A well-designed ABW office provides a mix of “hot” (lots of activity) and “cold” (private) places. It is based on the principle that finding the right balance between public and private workspace best supports collaboration and personal productivity. Digital workplace leaders who begin work now to identify the work styles of their employees will be well-positioned to take advantage of this trend (see “Create a Catalog of Activity-Based Spaces in the Digital Workplace to Improve the Employee Experience”).
Gartner research indicates that IT most often leads digital workplace programs. 4 This is an opportune time to begin to work more closely with RE/FM leaders to create a shared charter for IT and RE/FM. In addition to planning investments, having a collaborative, multidisciplinary approach will support a vendor procurement process that addresses both technology and physical space challenges.
A growing body of evidence suggests that exposure to a natural environment enhances productivity and improves employee well-being. 5 Biophilic design takes inspiration from nature, integrating natural light, materials and vegetation into the work environment for a positive effect on workers. For example, India-based JLL’s new office in Mumbai is “nature-aligned” with life-size trees and nature sounds at frequent intervals to de-stress the workforce. 6
Land Securities — one of largest commercial property development companies in the U.K. — redesigned its office space to allow employees and visitors to decide how, when and where they work depending on their requirements. The workspace has a combination of space types where people can work quietly or interact with others depending on what tasks they need to carry out during a typical work day. 7
Space planners can take care of human factors and design the appropriate layout, but the space cannot come alive without including the technologies (IT) and the policies and practices around usage (HR). The pieces must work together. Hence, it is the partnership between IT and RE/FM, along with support from HR, that ensures that IT provides the right technology fabric to support various kinds of space and activity. People’s preference is to consume these capabilities as a service — “space as a service.” Thinking in this way will allow planners to understand the utility (use cases and capabilities), warranty (SLAs) and costs (see “Introducing the Digital Workplace Strategic IT Services Portfolio”).
Smarter workspaces. Technology forces such as the Internet of Things (IoT), artificial intelligence (AI) and mixed reality (augmented reality/virtual reality [AR/VR]) are introducing a myriad of new possibilities for digital workplace leaders to create smart workspaces and, eventually, smart buildings. Seventy-two percent of respondents in the 2016 Gartner IoT Survey said they were implementing or had already implemented IoT-related technology. 8 Digital workplace leaders can facilitate integration of the information from such building and facilities technology into an exceptional employee experience. This information could include lighting systems, air conditioning, heating, air quality, occupancy and so on (see “Use the Internet of Things in Smart Buildings to Achieve Work-Life Ambience” and “Align Smart Workplace Efforts With Employee Needs for Knowledge-Based Work”).
Space-based technology requirements. Different types of meeting space have different IT requirements. There has been an explosion in new technologies targeted at everyday meeting rooms in offices. Analyze the various kinds of meeting space within the organization and equip them with the right technology (see “Select the Right Technology for Modern Meeting Rooms”).
Digital signage/screens. Offer digital signage as an element of digital workplace services. Embedding visual communication capabilities as part of a more modern, dynamic workplace can lead to better employee communication and experience.
Improve IT support/perception. Harness this initiative to introduce a visible presence for IT, such as walk-up service bars. Implementing a “genius bar” can make IT seem more approachable and responsive. Currently, employees feel that their IT groups are not very responsive. A walk-up service can elevate the relationship between employee and IT. Instead of leaving a problem with a technician, the employee is involved in the resolution, and so may be able to solve similar issues themselves next time. Canadian insurance company Manulife has set up a series of what it calls TechLounges in several divisions, starting in Toronto. These are drop-in technical support centers where end users can bring their laptops and other company-issued devices for upgrades and minor fixes. The TechLounges also help remote workers who might not know when they will be in the office for a training session or upgrade. 9
Unified communication needs. Since not everyone can always be in the office, interactions need to support remote participants. For IT, this means continued investment in technologies such as unified communications and collaboration (UCC) and group video, to support collaborative workspaces and facilitate collaboration with third-party partners and vendors. (See “IT Challenges to Planning the End User’s Physical Work and Collaboration Spaces” for additional IT service challenges emerging from the changes in office space.)
Integrated workplace management systems. Harness the partnership with RE/FM leaders to determine an integrated workplace management system (IWMS) vendor that meets the requirements for smart and cost-effective operation of the facilities (see “Market Guide for Integrated Workplace Management Systems”).
New procurement skills.Encourage new skills development by having IT leaders work with new types of vendors that they might not normally encounter, such as those for furniture, digital signage, architecture and design firms, IWMS, and resource scheduling.
Remote Working Trends and Accounting Rule Changes Increase the Need for Synergy Between Application and RE/FM Leaders
Two parallel trends are increasing the urgency for digital workplace leaders to join forces with RE/FM leaders to better manage office space in their organization:
The increase in remote working is a global phenomenon. Three out of 10 Americans spend at least 80% of their time working remotely. 10 In the U.K., 91% of firms have at least one employee working from home, and 19% of companies have over 50% of their employees working remotely. 11, 12 Figure 3 depicts the proportion of remote workers by country. 13
Figure 3. Remote Working Is a Global Phenomenon
Working remotely — sometimes referred to as teleworking or telecommuting — means employees are not working in a traditional corporate office. As shown in Figure 4, the preferences of various segments of workers indicate that workers want the flexibility to work from their choice of locations. They want to be productive regardless of whether they are working from a corporate office, at home or some other place. (For an explanation of the five worker segments — caretakers, pilots, engineers, mavericks, navigators — see “Understand Five Key Kinds of Workers to Energize Your Digital Workplace.”)
Figure 4. Five Worker Segments and Where They Prefer to Work
Source: Gartner (December 2017)
As interest in remote working increases, digital workplace leaders need to make sure that these nomadic employees can easily find and reserve the kind of workspace they require when they do go into the corporate office. Working with RE/FM colleagues, they can support a mobile workforce with a smaller real estate footprint and no loss of productivity.
As part of continually re-evaluating how space is used, RE/FM professionals are exploring more-dynamic subleasing arrangements for unused space. Use of shared workplace or co-working spaces, whereby companies rent office space on flexible terms (hourly, daily, monthly or yearly) directly from businesses with space to share, is increasing. By the end of 2017, nearly 1.2 million people worldwide will have worked in a co-working space. This phenomenon is not restricted to freelancers, individual business executives and fast-growing startups; it includes large enterprises such as AT&T, Tyco, Autodesk and Accenture.
FASB/IASB accounting changes to take effect on 1 January 2019 will radically change accounting for operating leases and affect almost every organization, especially those that lease real estate. These changes will effectively do away with the traditional off-balance sheet operating lease for terms longer than 12 months, and will require that they appear as liabilities on the balance sheet. Listed companies using IFRS (international) or GAAP (U.S.) accounting standards have around $3.3 trillion in lease commitments. Specific assets that will be most affected by these accounting changes include corporate real-estate holdings that are often financed via an off-balance-sheet operating lease (see “Beware the Effect of the Operating Lease’s Demise on Finance and Real Estate”).
While these reporting changes will not directly affect how business is conducted, the changes will impact how a company’s financial health appears on paper. As a company’s total cost of occupancy is typically its second-largest category of expense after the cost of labor, the impacts on financial results for many will be significant. Therefore, this accounting change serves as a catalyst for corporate RE leaders to urgently seek cost-saving opportunities and, in the long term, to revisit or even overhaul their RE management strategies.
RE/FM leaders are already making investments in technology to create smarter, more efficient buildings. Digital workplace leaders need to actively engage with them to ensure that the business outcomes that are fundamental to the RE/FM business case can be addressed with the communication infrastructure. Alignment can drive lower technology costs, lower technology risks, better agility to new hybrid projects and access for IT to new sources of data (see “Show the Value of OT and IT Alignment, and Realize Digital Business Results”).
Right technology and amount of remote work. Enabling remote work requires significant technological investment. For example, IT leaders will have to provide the right technology infrastructure from laptops with preconfigured VPN access to the internet backbone. It will also force IT leaders to reassess their mobile and endpoint strategies, the foundation for which must be the concept of unified workspaces. Technologies and services must securely deliver the right applications and data to the right user, on the right device, at the right time and location (see “Embrace Unified Workspaces to Deliver on Your Digital Workplace Vision”).
The increase in remote work might give the impression that the future of work is entirely remote, but that is far from true. Not every kind of work can be done remotely, hence it is not applicable to all organizations and job profiles. Respondents to a recent Gartner global survey indicated a wish to spend most of their work time in a corporate office. Remote work has both pros (productivity, reduction in real-estate expense) and cons (burnout, loneliness, lack of collaboration). Some companies, such as IBM and Yahoo, discourage remote working. IT and business leaders must determine how much remote working the firm can handle, as well as ensure that the culture and the technology infrastructure can support it. Digital workplace leaders who design practices that strike a balance between remote work and office work will enjoy the benefits of both.
Managing the workspace with mobile workers. When remote workers need to go to their corporate location, they must be able to find the resources that will enable them to be productive, such as a private workspace, a conference room, directions and even a parking space. Such situations surface the need for resource scheduling tools that will help remote workers to check availability and book these resources. IT needs to work with RE/FM leaders to determine their requirements and deploy resource scheduling tools that provide an optimal employee experience. Co-working spaces or shared spaces, where a number of companies coexist, clearly require technology that can efficiently schedule the shared resources and bill them accordingly (see “Market Guide for Resource Scheduling Applications”).
Data-based space planning. Leverage the utilization data from RE/FM tools such as IWMS and resource scheduling to design your future workplace. Buildings are no longer built to last for decades; they need to more flexible and adaptable. For example, Japanese imaging and electronics company Ricoh was able to create annual space savings of up to 50% by analyzing data from workspace occupancy sensors. The desk data captured indicated average desk utilization of below 30%, with busiest periods peaking at 51%. The data revealed that 58% of Ricoh’s desks were used under 20% of the time throughout the study. Many such insights on workspace allowed Ricoh to use its resources more efficiently.
Combined user segmentation modelling.It is becoming impractical for RE/FM and IT to address employee needs individually. As part of space utilization studies, RE/FM leaders are beginning to classify workers based on how often they are in the office and what they do when they are there. This is strikingly similar to the user segmentation used by IT organizations to plan for and control service provisioning (for example, who gets a laptop or a desktop and who is entitled to a company-provided mobile device). All organizations should have a single, evolving user segmentation model, developed and applied by all shared service organizations that contribute to the employee experience. This will avoid redundant employee surveys and focus groups whose data and learnings are collected and applied independently.
IT possesses a treasure trove of “digital bread crumbs,” such as usage of mobility and conferencing services as well as device assignment, to help inform user segmentation modeling. Vendors are emerging to operationalize these approaches (see end-user analytics in “IT Market Clock for Client Computing, 2015”). A simple model that quantifies this information is a good first step, but using techniques such as journey mapping and persona development will start to answer who is using which spaces and for what activities. Work done on the move requires IT to support a work context that follows the worker to any space. Understanding the activities being performed helps inform the space designer of the type of physical space needed to support.
Developing these competencies needs to be a shared activity of IT and HR with RE/FM. The employee experience is the cumulative effect of interactions with services provided by all the shared service organizations.