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The role of the office in the trending hybrid work model

Xuan Pham • 11/08/2022

Early in the pandemic, many questioned the role of the office and whether the unforeseen global experiment in remote working would render the office irrelevant.  In the new normal, we are gaining a greater sense of the long-term impacts. The global shift to remote work during lockdowns has accelerated flexible work practices for many corporations while pushing businesses to rethink their office space in the long term. 

Hybrid working and hybrid office: Is the trend here to stay?

Hybrid working is not a new concept, but it was relatively foreign to the mass before the virus hit. This model provides employees with choices on where they want to work, along with nice perks like better work-life balance, financial benefits, and savings.

The hybrid office model can be understood as an office space that can accommodate the flexible schedule of all teams. A hybrid office is similar to a flexible space, which provides employees with a variety of different places and ways to work. Quite different from traditional offices with fixed workstations and cubicles, hybrid offices offer hotdesks, co-working areas, and focused booths for any type of tasks and work preferences that employees can have.

Cushman & Wakefield Vietnam team has seen a great interest in office renovations and expansions through our discussions with tenants all over the region and Vietnam. In the past two quarters, office expansion accounted for 56% of total leasing transactions, as companies look for new spaces to accommodate more in-office headcounts. Transactions mainly come from industries such as Software development (19%), Retail (16%), Banking (10%), Logistics (16%), and E-commerce/Fintech (16%). Whether a tenant is seeking to add or shed spaces, they always strive to create a better human-centric workplace.

Ms. Trang Bui, General Director of Cushman & Wakefield Vietnam, observes “Each of our client’s real estate portfolios offers unique opportunities. When it comes to office relocation, renovation, and expansion, we review not only the physical characteristics, functionality, and utilization of existing spaces but the experience in each location to determine which spaces to keep, which to shed, and which to adapt for a more agile workforce.”

The following three scenarios show how businesses have chosen to transform their offices to accommodate growth, encourage collaboration, and give employees the power of choice. 

BASELINE-SCENARIO

BASELINE SCENARIO: PRE-PANDEMIC SPACE ALLOCATION 

Pre-pandemic

Traditional in-office workstyle

High percentage dedicated to individual seats

SCENARIO ONE: SAME SIZE, BETTER EXPERIENCE

Seeks to increase space utilization, team and business performance, and employee engagement with features not found working from home

Space mix and amenities amplify the office experience

Provides flexibility and choices

Increases collaboration, engagement, and knowledge sharing

Improves network connectivity, equipment, and workplace ergonomics

SCENARIO TWO: LESS SPACE, BETTER EXPERIENCE

Reduce core space and leverage the entire ecosystem — home space, local satellite offices, on-demand space, and third places

Enables employee’s best work in the space that fits the task

Enhances work-life balance and wellbeing

Proximity to the ecosystem shortens commutes and increases productivity

The shift will not always necessarily reduce space per employee ratios.  Instead, many organizations are reimagining spaces to emphasize collaboration while still utilizing similar amounts of square footage. On the other hand, strong job growth has spurred many companies to add office spaces to house a larger workforce, even if in a more agile manner. Regardless of space allocation, the office will require a new type of flexibility more focused on personal choices, permission, and trust. 

Uncertainty reigns regarding the optimal blend of in-office and remote working 

Throughout the pandemic, workers have shown that they can maintain productivity when working from home. However, this has come at the expense of other in-office experiences. To get the best of both worlds, the key is understanding what is needed from the office and by whom.

Through the Experience per Square Foot (XSF) survey, a bespoke workplace strategy tool by Cushman & Wakefield, employees reported that remote work has been a drag on personal interactions — especially when it comes to building professional networks and bonding with colleagues. Mid-tenured employees (3-5 years) appear to be struggling the most, then seeing the greatest improvements with more frequent office attendance. 

While many want to have a remote-work option, Cushman & Wakefield’s data indicates that employees need the office to learn, make meaningful cultural connections, and engage deeply with colleagues. Interestingly, Millennial and Gen Z workers are more likely than other generations to have positive employee experiences when they frequent the office three to four days a week, the survey found.

EMPLOYEE-PERFORMANCE-SURVEY-RESULTSFurther, Cushman & Wakefield’s survey data shows that when working frequently in an office that supports social connections, employees’ mental health and well-being are greatly improved.

The findings from Vietnam’s market are consistent with the analysis of data from Cushman & Wakefield’s bespoke workplace strategy tool, Experience per Square Foot (XSF), which has shown a practically universal desire to work more flexibly post-pandemic, but significant variations exist across the region. Employees in mainland China and India still prefer to work mostly in the office, while in Australia there is a greater desire to adopt a hybrid model that incorporates more remote working. The data highlights that the most important element is to allow employees the freedom to choose where they wish to work.

The office is still an essential tool in retaining and recruiting talent and communicates a company’s brand and culture. Amenities are now key differentiators, evolving into spaces for employees to work, socialize and connect with colleagues. Creating communities is now fundamental to the employee experience and at the heart of a thriving precinct, building, or workplace. Consequently, we see communities being created through wellness spaces, tenant apps, partnerships, and events.

The challenges are real

Ms. Trang Bui emphasizes the major challenges of the hybrid model: “Despite the surprising levels of productivity, many occupiers noted that increased remote work has created a perceived cost in long-term productivity, corporate culture, innovation and creativity. Remote working is also more challenging for new and entry-level professionals, those with large families, or people who live in cities with limited housing space, making it impossible to establish a dedicated workspace.”

For older generations, the new hybrid model might take quite some time to stick.  The traditional office was designed to be functional, with team members sitting next to each other, and physical attendance is counted towards performance. The new hybrid office model turns this familiarity upside-down. Employees can no longer leave their devices and belongings that mark their territories like family photos, sticky notes, or stationary as desks are expected to be cleaned at the end of the workday.

Another challenge for landlords is how to inspire employees to choose the office. Employees will expect and require more than an A-grade building with great views. They also need surrounding amenities such as convenient parking, health care services such as gyms, spas, retail areas with a variety of shops, and green spaces such as parks, hanging gardens, or office plants. Some businesses with a large number of employees have even integrated canteen to serve food and drinks right on campus. 

Much is at stake, from policy development to space design, technology strategy, real estate portfolio decisions, and more. Organizations will need a solid action plan to carry out a successful transition from traditional office to hybrid and agile office. There is no one-size-fits-all, companies will need a deep understanding of their people and what they need to create a meaningful workspace that will inspire their staff to “go to work”. 

Trang Bui advises, “It’s a business challenge that requires an integrated approach from real estate, human resources, finance, and technology leadership. No longer can these departments work in silos. Rather they need to work cooperatively as the organization defines the brand, builds culture, develops and refines policies, and creates reputation capital. Change management also plays a crucial role, assisting with changing leadership mindset, work processes, physical spaces and or locations, integration points, and communication patterns.”

Conclusion

The Vietnam office market has shown constant resilience throughout the pandemic. The demand forecast continues to look positive largely due to growth in office-based employment, weaker adoption of flexible working practices, and the enduring vital role of offices.

The complexity brought about by the global pandemic has required organizations to adapt to retain talents and encourage them to return to the office. The future workplace will be an ecosystem that offers many options for employees both in terms of workspace types, working time, and amenities around the office.

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