January 25, 2021
The Flexible Workplace
By Elliot Felix
Everyone Needs a Flexible Workplace
Every employee and every organization needs a flexible workplace. Unless of course they are in an industry impervious to technological and demographic change, in a business with surplus capital that’s not expanding or contracting, with customers who are completely satisfied, and employees who all work the same way, have no life outside of work, and want to keep doing the same forever.
Sound familiar? Didn’t think so. This is why flexibility in the workplace is such a hot topic – at a time when there is so much changing and so many competing needs, everyone is seeking the ability to adapt to and accommodate change.
What’s Driving This Need for Flexibility?
The Boston Consulting Group reports that the average lifespan of a public company in 1950 was 55 years but has declined to 32 years today, in 2021. Bain & Company reports that half of new leaders reorganize their people in the first year,but fewer than a third produce meaningful results. The Mercer Group has found that organizations are more flat, with managers having an average of 8 – 10 direct reports today compared to 5 direct reports 20 years ago. Maunder Taylor found companies move locations 18% more frequently and CoreNet has found that space per person has declined 33% since 2010, from an average of 225 to 150 square feet per person. The Bureau of Labor Statistics reports that 34% of employees work on a contract or freelance basis today and this will rise to 50% by 2020. (Interestingly, the common conception that employees now work for shorter time spans is not true; according to the Bureau of Labor Statistics, the median tenure in 1983 was 3.5 years compared to 4.2 years in 2016.)
What Are the Types of Flexibility Organizations and Employees Need?
In this post, we’ll go into these different types of flexibility in the workplace – flexible working, flexible organizations, flexible spaces, and flexible services – and understand what’s driving the need for flexibility, identify how different organizations are providing it, and understand their results.
Flexible Working: In terms of people, to adjust to varied demand, access the right talent, control their costs, and capitalize on a 24-hour workday that spans the globe, organizations need flexible staffing so they can rely not just on full-time employees to get work done, but contract or freelance staff as well. To attract and retain their employees and enable them to be productive, organizations are offering flexible work arrangements so that people can work remotely and shift when they do their work. For example, JetBlue’s customer support crewmembers work from home after an orientation program and Upwork has “Work Online Wednesdays” where employees work remotely.
Flexible Organizations: Organizations are emerging that are more flat, less formal, have less structure (or different kinds of structures like networks or holacracies), and have different ways to make decisions. Organizations and teams are also embracing more flexible processes like lean and agile ways of working. Rather than create their product or service all at once through a slow and risky process with a big reveal, they are creating smaller cycles to create, test, learn and refine. For example, at Valve Software, employees work in a completely flat organization with no managers, choose what projects to work on, and choose where they’ll work within the office in what their new employee handbook describes as a “fearless adventure in knowing what to do when no one’s there telling you what to do.”
Flexible Spaces: To accommodate changes in their size and strategy, organizations are also seeking more flexible leasing arrangements. Rather than create a new office in a new market for the sales team of a new product, they can get space from WeWork on a monthly basis and scale up if they get traction – or even get space on an hourly basis from Breather. Flexible spaces are also now the norm in most workplaces. These spaces give people the agency to adjust their own environment and accommodate different ways of working. Few organizations have the finances to have an entire portfolio of single-use space, and fewer still can afford to miss out on the dynamism, energy, and serendipitous connections that come from multipurpose spaces that can accommodate meetings, dining, and events. For example, the New York City office of Intersection and Sidewalk Labs features a multipurpose lounge with stunning views, coffee, and food, and dozens of different places for informal meetings, events, and dining.
Flexible Services: As work and workplaces become more flexible, so must the services offered in the workplace to inspire, support, and connect people. Work space has to keep pace with expectations set by retail and hospitality spaces. We’re living in an experience economy and a sharing economy – and both run on services. Coworking spaces, flex offices, and serviced offices are growing rapidly. If you think about space as a kind of “hardware”, services are the “software” that interfaces with people and activates the space. We can think about workplace services in three tiers: the basic services people need to function (like tech support), the services that are experience enhancers (like community events), and the deluxe amenities that organizations use as competitive differentiators (like on-site medical care).
We’re living in an experience economy and a sharing economy – and both run on services.
Part 1 (of 4): What is Flexible Working?
So, what’s flexible about “flexible working?” Well, it means that people have the option to change where they work (i.e., work from home or a satellite office), when they work (i.e., working schedules beyond a traditional eight-hour block like 9 to 5), and how much they work (i.e., working a compressed 4-day work week).
While stories going against these trends make headlines, such as IBM or Yahoo! calling its remote workers back to the office, the number of organizations offering flexible work continues to increase and so do the benefits to employees and employers alike (when done right, of course). For example, at Clif Bar employees can choose a compressed schedule (working 80 hours in 9 days), and 61% have opted for this while 12% choose to work from home one day per week. Dell offers remote work programs, encourages telecommuting, and has set a goal of having 50% of their workforce be remote by 2020.
Flexible work has been on a steady rise. Working remotely has risen from 9% to 37% of workers over the last 20 years according to a 2016 University of Minnesota study. Flexible schedules rose from 12% in 1985 to 28% in 2004 (the last year the US Bureau of Labor Statistics analyzed this). Fortune Magazine’s “Great Place to Work” Ranking even added a category for the most flexible companies in 2016. They analyzed telecommuting, flextime, job sharing, compressed schedules, and phased retirement, and created a list of companies at different scales and in different sectors.
Why Are Employers Offering Flexible Working?
A recent article in Harvard Business Review on which benefits are most desirable among job-seekers revealed that 88% of respondents consider “more flexible hours” second only to “better health, dental, and vision insurance.” In the Society of Human Resource Management’s 2015 HR Jobs Pulse Survey, 38% of respondents indicated that they continue at their current enterprise because of the “flexibility to balance work and life issues.” A 2018 Justworks survey concluded that 70% of employees ranked flexible work hours as very important and 42% would take a lower-paying job if it offered more workplace flexibility. So, what’s driving this demand?
Employers are able to expand their talent pools from which to attract recruits, they are able to retain their talent by offering desirable benefits, and they are able to save money on office space and potentially personnel by accessing talent in areas with a lower cost of living. Employees are able to accommodate family demands such as caring for a child or aging parent, balancing work and life demands, shortening or eliminating commutes (saving not only time but the associated stress as well), and gaining an overall sense of control and empowerment. By reducing both office space and commutes, carbon footprints can shrink as well.
What Are the Impacts of Flexible Working?
In what is generally regarded as the most rigorous study to-date on flexible working, University of Minnesota and MIT Sloan School of Management’s 2016 study found that “employees who participated in the organizational initiative said they felt more control over their schedules, support from their bosses, and were more likely to say they had enough time to spend with their families. Moreover, these employees reported greater job satisfaction and were less burned out and less stressed. They also reported decreases in psychological distress.”
Looking more broadly at a variety of studies, 91% of remote workers feel more productive (TinyPulse 2016), 82% report less stress (PGi 2014), take fewer sick days (HBR 2014), give back some of the saved commute time by working an average of four more hours per week (Gallup 2013), and generally get more done – such as travel site CTrip finding 13.5% more calls made by remote workers. One example: the law firm Cooley is the top law firm on Fortune’s Great Place to Work list (#25) and offers telecommuting, job sharing, and compressed work weeks while also attracting a workforce that’s 57% women (compared to American Bar Association 2016 average of 36%).
The impact on the physical workplace can be just as significant as these impacts on people. While workplaces can vary based on location, industry, and size, there are some common results. First, less space is needed once organizations account for their people not being in the office all the time. Second, the space that is needed tends to be more collaborative (but not exclusively so) because people are drawn into the office to work together with co-workers and customers in ways they otherwise couldn’t. Third, people can use a range of places to get their work done, including small satellite offices that save a commute to the HQ, membership-based co-working space, and everything from coffee shops to hotel lobbies to airline lounges.
With flexible working, space tends to be more collaborative (but not exclusively so) because people are drawn into the office to work together with co-workers and customers in ways they otherwise couldn’t.
How Flexible Working Creates Better Organizations?
Like many aspects of the workplace, enabling flexible work has trade-offs. Everyone coming to the same place at the same time every day has benefits: you’ll most reliably be able to work with colleagues, it requires the least coordination, and has the simplest policies. But, without offering flexibility, employers limit their talent pools, occupy more space than they need, and restrict employees from working where, how, and when they work best.
A company that attracts and retains talent, uses its resources wisely, and empowers its people sounds a lot like what a company should be today. So, we ought to look at flex work as more than just providing flexibility to employees; really, flexible working is a prompt for organizations to become better versions of themselves.
Without the default setting of ‘everyone in the office 9 to 5’, organizations need to create clear expectations and policies, provide employees the tools they need to work effectively, be intentional about their culture and set norms, define how they are measuring and rewarding performance, proactively coordinate activities and set the rhythm of the business, and both trust and empower their people to work where, when, and how they need to. These are the attributes of an effective, inspiring organization.
Not too long ago, we were all careful to distinguish between “online shopping” and “shopping” but recently it just all became “shopping.” Flexible work and remote work will go the same way; in the not too distant future, these will just be “work.” They’ll simply be how work gets done at organizations that connect, empower and reward their people, and use their workplace to advance and showcase their purpose. This means that most organizations will have been intentional about their culture, norms, policies, technology, and space – and we’ll have flexible working to thank for it.
Flexible work will simply be how things get done at organizations that connect, empower, and reward their people and use their workplace to advance and showcase their purpose.
Part 2 (of 4): Flexible Organizations
Why must your organization be flexible (or agile or nimble or adaptable or responsive or resilient or another buzzword…)? Change and uncertainty. Product life cycles are shortening: in the 10 years since the first iPhone came out in July 2008, there were 19 new versions – 53 new versions if you distinguish between memory size! Company lifespans are decreasing: the Boston Consulting Group reports that the average lifespan of a public company in 1950 was 55 years but has declined to 32 years today. The pace of technological change is accelerating: to reach 50 million users, it took radio 38 years, television 13 years, the Internet 4 years, Facebook 3.5 years, Twitter 9 months, and Instagram 6 months. There is less that people and organizations can count on: according to a Catalina 2015 study of the 100 top consumer packaged goods brands, 90 experienced share declines.
What is a Flexible Organization?
If an organization is a group of people united by a common goal, then a flexible organization is one that adapts effectively to internal and external changes to achieve that goal. At brightspot, we think of organizational design in terms of three related dimensions: the roles that people play, the structure that relates those roles, and processes to fulfill those roles within the structure. Whether it’s demographic change, technological innovation, or a shifting competitive landscape, these are the three dimensions in which organizations must be flexible in order to adapt. If not, Kodak provides a cautionary tale; focusing on film despite the rise of digital photography didn’t work out that well.
At most organizations, someone’s role is synonymous with her/his title, roles tend to be assigned for a long time, and tend to encompass dozens of different responsibilities rolled up into one job description whose priorities and expectations may not be clear. All of this makes it hard to change. Holacracy is a management philosophy and practice that upends these practices: roles are defined by the work to be done not by the people doing them. People play multiple roles (which are related in different “circles”). The duration of these roles can change in clearly defined ways.
Perhaps the company that has most publicly embraced holacracy is Zappos, where the average employee has 25+ responsibilities because they are filling an average of 7.4 roles each with an average of 3.5 responsibilities. (If you want to learn more, Harvard Business Review’s article “Beyond the Holacracy Hype” provides a good overview of Zappos’s story as well as stats like these). Morning Star Foods also has a unique take on roles. Employees write CLOUs (a “Colleague Letter of Understanding”) in consultation with their colleagues to spell out what colleagues can count on them for, what their responsibilities are, what their goals are, and what their performance metrics are.
The other default in most organizations is that a role or title reports to another one, in some kind of hierarchy. These reporting relationships – and how they are grouped – form the structure of the organization. Flexible organizations question that assumption and instead focus on empowering people to manage themselves with as little structure as possible to enable more effective and ongoing adaptation. Richardo Semler famously penned “Managing without Managers” in Harvard Business Review in 1989 to discuss the success his company Semco achieved in distributing authority.
Frederic Laloux’s Reinventing Organizations provides a great template for flexible organizations that are more like a living organism than a machine or family, and are defined by employees showing up to work as whole people and managing themselves, guided by a unifying and ever-evolving purpose. In his book, The Connected Company, Dave Gray advocates for a more flexible “podular” structure where companies are organized into small, self-organized “pods” of people so decisions can be made on the ground by better connected people. What might this look like? One example is how Spotify’s product development approach is focused on agile software development “Squads.”
Moving to flexible roles and structures necessarily changes an organization’s processes; for instance, once decision-making authority is distributed, direction need not trickle down from the top like a waterfall, but rather can be made by many more people and teams. As a result, flexible organizations often put a lot of thought into codifying types of decisions (e.g., reversible or irreversible?) as well as methods of decision making (e.g., consensus, consent, democratic, autocratic) since there are more people making them. Strategic planning to chart a course for the future is another commonly rigid process.
Management scholar Roger Martin calls strategic planning a “big lie” because organizations uncomfortable with deciding in the face of uncertainty generally comfort themselves by making unrealistically detailed forecasts for things like sales and then let the forecast masquerade as a strategy. Instead, they should ask themselves more fundamental questions like “Where should we play?” and “How can we win?” and “What would have to be true [for our strategy to be the right one]?” Flexible organizations ask these questions and are constantly experimenting, evaluating, and evolving as conditions change while they steady themselves with a shared purpose.
Just How Much Flexibility Do You Need?
No organization can realistically keep doing the same thing, in the same way, with the same people, forever. So, the question isn’t whether your organization needs to be flexible or not. It’s how much flexibility is needed given how much is changing internally and externally. This can be a function of the size and maturity of the organization, the industry, the customer base, and the competition – to name just a few factors. But, it’s an important question to ask because flexibility almost always comes at a cost, and stability has plenty of benefits too.
Empowered people, agile teams, and responsive organizations are the goal, but coordinating the work of distributed teams, playing multiple roles, changing your strategy – these are all hard work! It’s much easier to be autocratic, to have a simple, functional division of labor, and to keep executing the same plan. So, be flexible where you need to be and where there’s a benefit. Medium abandoned holacracy after only a few years, but Morning Star’s self-management approach has worked wonderfully for them for decades.
As you strike the balance that works for you, your purpose and values can provide the stability you need. Purpose and values can evolve over time; for instance, how many oil companies are now energy companies? But they should be durable enough to be something your people can count on so that you can pursue the same ultimate goal differently. For instance, IBM stayed focused on information technology while transforming from being most closely associated with PCs to a mostly software and services business. As part of this transformation they updated their three, 100+ year old values – but not dramatically; they retained points about customer focus and people, and then excellence became innovation.
No organization can realistically keep doing the same thing, in the same way, with the same people, forever. So, the question isn’t whether your organization needs to be flexible or not. It’s how much flexibility is needed.
Part 3 (of 4): Flexible Spaces
Space needs to be flexible for a variety of reasons. The workforce is more mobile, with 43% of U.S. workers working remotely at least some of the week according to Gallup. Change and choice go together and people want choices – Gensler found that employees are 20% more satisfied, 25% more innovative, and 7% more productive when they have choices in when, where, and how they work. People also want to customize and personalize their space. Steelcase concluded that 88% of highly engaged workers have control over their space. Cost is also a driver because a space that can be reconfigured to accommodate different uses throughout the day allows you to do more with less. Finally, accommodating growth in the size of the organization also requires flexibility to accommodate more people in the same amount of space or to change the use of space; for instance, from a meeting room to a shared office.
What Should Change to Make a Space Flexible?
Robert Probst’s “Action Office” concept for Herman Miller in the 1960s envisioned a workplace where walls, panels, desks, and people could all move once they were freed from the encumbrance of fixed walls. In the 1970s, Frank Duffy observed that a building consisted of different layers that changed at different rates: site (indefinite), shell (50 years), services (15 years), scenery (5-7 years), and setting (daily). This was then popularized by Stewart Brand in the 1990s as “pace layers” in How Buildings Learn.
So, the idea that the workplace must accommodate change is not new. But, the ways in which it is changing, the frequency of change, who can change it, and the flexibility required to accommodate these changes has become more complex and multi-dimensional – it’s not just physical things that need to be flexible. It’s also how we rent space, how we use space, the services offered in the space, and the technology we use to access and control them.
Here are the seven dimensions of space flexibility you could consider in the workplace:
- Flexible leasing: In the past, space was owned indefinitely or leased by the year (or decade!). No longer. In the same way iTunes changed the prevailing “unit” of music from the album to the song, first Regus and now WeWork have changed the unit of space from years to months. Breather is taking this further, down to rent by the hour. The increase in this trend seems inevitable; according to Statista, the number of flexible co-working spaces has risen from 75 in 2007 to 13,800 in 2017.
- Flexible layout: At some point pretty much every company has asked: “Can we knock down that wall to combine two adjacent rooms?” While the answer used to be “no” or “that’s expensive” or “that will take forever,” now modular designs and movable walls systems are taking off because of their flexibility, environmental sustainability, and financial benefits (estimated by RedThread to save $725 per office wall, per year, and achieve a ~10% more efficient layout).
- Flexible furniture: While spaces designed for specific purposes are a must in the workplace, sometimes a multipurpose space whose furniture can be reconfigured is a better bet than multiple specialized spaces that may sit empty a lot of the day. For example, the lobby lounge at the New York City office of Intersection and Sidewalk Labs provide space for individual work and informal collaboration while easily converting to large events space at lunchtime and in the evening.
- Flexible occupants: As discussed in an earlier article, the rise of flexible working means that people have more choice in when, where, and how to work. This means that different occupants may use the same space, hour to hour or day to day. Microsoft’s Schiphol office is a terrific example of a workplace that intentionally mixes employees, clients, and partners within the same spaces. In doing so, they increased employee satisfaction by 60%, achieved a 25% increase in productivity, and reduced real estate costs by 30%.
- Flexible technology: The days are numbered for all technology being provided by the employer and fixed to desks, walls, and ceilings. Organizations are seeking greater flexibility and so Cisco found that 69% of IT decision-makers favor employees being able to bring their own devices to work (“BYOD”) and much of audio-visual technology is shifting from fixed and hardwired (i.e., a projector bolted to the ceiling with a screen) to mobile and wireless (i.e., an LCD screen on movable cart and wireless projection software like ClickShare or AirMedia).
- Flexible systems: Even though systems like heating and air conditioning or lighting might be replaced every 15 years in Frank Duffy’s Site/Shell/Services/Scenery/Setting schema, these can now be adjusted minute-to-minute at the touch of an app. For example, the Comfy mobile app enables people to adjust lighting and temperature (as well as book rooms and provide feedback). Acoustics can now be controlled as well – whether you’re using Noisli for background sound or pink noise for sound masking. For lighting, Philips uses power over ethernet and an app to wirelessly adjust lighting levels and color temperature.
- Flexible services: As the workplace learns from retail, hospitality, and co-working spaces, as the flexibility of the space increases, and as organizations recognize that we’re living in an experience economy, services within the workplace become even more important. They also need to be more responsive to change. Services like reception, concierge, dining, fitness, tech support, shipping/receiving, and community events need to be more flexible. This means an operating staff with the right culture and tools. They need real-time feedback to learn and adapt. They need real-time notifications to drive traffic to events or demos or pop-ups. They need real-time communications to connect with a mobile workforce. As a result, organizations with the most flexible spaces – such as co-working spaces and consulting companies – generally all have mobile apps to access, manage, evaluate, and update their workplace services. (More on this in Part 4 of this article.)
It’s not just physical things that need to be flexible. It’s also how we rent space, how we use space, the services offered in the space, and the technology we use to access and control them.
What Should You Do About It?
Once you understand why and how your space needs to be flexible, what should you do? Prioritize based on what matters to people, achieve flexibility through diversity, and plan for smaller and smaller increments of change that give greater and greater control to end-users. Let’s take these one by one.
Prioritize: Faced with presumably limitless demands and a limited budget, you’ll need to decide what’s fixed and what’s flexible. This is especially important since some flexibility pays for itself but others come at a cost – and some costs are indirect; for instance, you may save space with a multipurpose space, but it will cost more to operate it. One way to prioritize is to use data on what people care about. Ideally this is from your people, but if not available you can use data from large global workplace surveys from organizations like Steelcase, Gensler, and Leesman. The Leesman Index includes hundreds of thousands of respondents from thousands of workplaces and includes the percentage responding that specific workplace features are “important to create an effective workplace.” So, you could focus on temperature (80%), acoustics (75%), lighting (65%), computing technology (59%), personalization (56%), and AV technology (38%), perhaps in that order.
Diversify: We’ve all probably seen the high school “cafetorium” that doesn’t work particularly well at being a cafeteria nor an auditorium. So, while we can make more and more things flexible, we shouldn’t make everything flexible. Some spaces should do one thing well and be fit for purpose. And these spaces should be different in order to create variety as a hedge against a future in which behaviors, needs, and priorities change. A diverse portfolio of space is analogous to a diverse financial portfolio; it’s a great way to manage risk. This can even be a way of organizing spaces. While not an office, Seattle’s main public library by OMA rightly observed that some parts of libraries were relatively fixed while others were undergoing rapid change. The fixed areas like meeting and conference spaces were grouped in alternating floors that created flexible spaces between them like the “mixing chamber” where people could work and get help from library staff.
Atomize: From all this, one trend is clear: technology enables changing aspects of the workplace in smaller and smaller increments, and as a result, control of these aspects will become more and more distributed now that it can be digitally coordinated. Leases have gone from year-by-year to hour-by-hour rental. Air conditioning has gone from floor-by-floor to zone-by-zone, to desk-by-desk control. Lighting has gone from room-by-room to fixture-by-fixture to bulb-by-blub control. So, to use the iTunes analogy again, stop planning by the album and start planning by the song – or even the clip! Plan ahead and look for opportunities to break down coarse increments into more granular ones so that you can be more responsive to change.
Technology enables changing aspects of the workplace in smaller and smaller increments, with more distributed control now that it can be digitally coordinated.
Putting It All Together
Choice and change go together. It may be that you’re providing people more choice and control in when, where, and how they work, or it may be that your business is changing to respond to shifts in the market. Or your workplace may need to change for other reasons. Regardless, your space will need to be flexible and enable its lease, layout, furniture, people, technology, building systems, and services to change. Understanding these dimensions of change is a start. Then you have to find the right amount of flexibility for you, and plan ahead for a future in which more and more can be changed, more often, by more people.
Part 4 (of 4): Flexible Services
Who cares about workplace services? Well, at a minimum, the 10,000+ people who have it in their job title on LinkedIn right now. Or perhaps any employer who’s motivated by Glassdoor’s finding that 79% of employees would choose engaging benefits over a pay raise. Or perhaps any member or provider of coworking space, which made up 37% of office space New York, Los Angeles, Chicago and San Francisco as of 2018, according to the Instant Group.
But really everyone should care, because as work and workplaces become more flexible, so must the services offered in the workplace. Work space has to keep pace with expectations set by retail and hospitality spaces. We’re living in an experience economy and a sharing economy – and both run on services. Coworking spaces, flex offices, and serviced offices are growing rapidly. For all these reasons, services within the workplace become even more important. In fact, it’s useful to think of space itself as a service, hence the rise of #space-as-a-service. (As an aside, in a lecture in 2011, I called this “the space of services” for lack of this much more elegant term!)
As work and workplaces become more flexible, so must the services offered in the workplace to support, connect, and inspire people.
What are Workplace Services?
If you think about space as a kind of “hardware”, services are the “software” that interfaces with people and activates the space. One way to understand what workplace services are is to see what some of the leaders in the space offer. WeWork lists: super-fast internet, printers, phone booths, common areas, stocked kitchens, community events, on-site staff, cleaning, and a “services store” for things like health insurance. Convene lists: food & beverage, concierge services, catering and pantry services, meeting and event space, micro-office suites, community programming, wellness, technology services, and social & club.
If you think about space as a kind of “hardware”, services are the “software” that interfaces with people and activates the space.
While provider lists like these have much in common, my research uncovered no authoritative list or standard categorization of workplace services. I did, however, find what the IRS considers workplace “fringe benefits” in Publication 15-B, and these include: athletic facilities, cafeteria, dependent care, lodging, meals, and transportation. Since this is not such a great list, let’s think about workplace services in three tiers: the basic services people need to function like tech support, the services that are experience enhancers like community events, and the deluxe amenities that organizations use as competitive differentiators like on-site medical care. Here is a list of common services by tier:
|Basic Support||Experience Enhancers||Deluxe Amenities|
What Services Do People Care About?
It’s clear that people value workplace services on the whole. HLW and the Instant Group found that 89% of coworking occupants agree or strongly agree that services offered within coworking / flex spaces will “improve their long term satisfaction” – and notably this was higher than the response for “design” at 86% or “community” at 82%. Beyond the overall value of services, the Leesman Index also provides good insight into employee priorities and expectations. In response to the question “Which of the following service features are important in creating an effective workplace for you?”, of the 250,000+ respondents, 83% said Tea/coffee/other refreshments, 78% said IT Support, 76% said Print/Copy/Scan, 75% said Restaurant/Canteen, 52% said Mail, 50% said Leisure facilities, 46% said Reception, and 41% said Hospitality services. In this list, you’ll see a mix of operations (like IT support and Mail) as well as hospitality (such as Restaurant and Leisure facilities), but, of course, these are converging because really, everyone is in the hospitality business, whether they know it or not.
Why Offer These Services?
Why go to the trouble of designing, delivering, evaluating, and continually enhancing these services? There are a variety of reasons, but they come down to three things: first, keeping people satisfied, productive, and engaged; second, enabling operations of and optimization of shared resources; and third, accruing financial benefits.
In terms of people, organizations are providing these services to enable employees to be engaged and productive, to boost attraction and retention of talent, to enable better work/life balance (or integration), and to foster collaboration. A recent NYU Stern study found a high correlation between offering workplace perks and longer working hours, adjusting for differences by industry. Services may also boost wellness: Watts and Mâsse found that offering fitness amenities (e.g., places to walk, showers, gym) in the workplace increased physical activity outside the workplace during leisure time by 19%. Gensler’s 2016 workplace survey found that innovative companies are at least twice as likely to have access to and use cafeterias, coffee shops, and outdoor spaces and offer twice the access to amenities including specialty coffee, restaurants, gyms, and childcare facilities. Cubist Pharmaceuticals used sociometric badges to identify a positive correlation between increased cross-team interactions and sales, and so invested in larger coffee areas, after which sales rose by $200M.
Why Are Workplace Services Changing?
For the operations of the workplace, services are needed in order to coordinate the shared use of resources like meeting spaces, food, or equipment. And there is more sharing going on. The Bureau of Labor Statistics reports that 34% of employees work on a contract or freelance basis today, and this will rise to 50% by 2020. Coworking space increased by 18% from June 2016 to June 2017 according to the Instant Group. Services are also required in order to personalize things such as room configurations – and this is critical because 88% of highly engaged workers in Steelcase’s global survey have control over their workspace. Digital tools have also set expectations for responsiveness that physical spaces are only now beginning to meet, with sensors and mobile apps that allow for real-time feedback and adjustment of temperature and lighting through apps like Comfy or for responsive programming of events, like organizing pop-up programs though the BetterSpaces app.
Services are needed in order to coordinate the shared use of resources like meeting spaces, food, or equipment – and there is more sharing going on.
What’s the Financial Impact of Services?
Workplace services can boost employee satisfaction, productivity, and engagement – and serviced offices are also typically a good deal. While it may seem expensive to shell out $500 a month for a desk which would mean annual rent in the range of $150 to $200 per square foot for that desk, when you account for the included wifi, printing, tech support, water, coffee, reception, cleaning, and access to shared spaces like phone booths, conference rooms, and lounge spaces, the actual rent is more like $50 per square foot (all assuming NYC prices). These spaces are a good deal for providers as well, not just from their profits, but also because of the value that results from their growth and membership-based business model.
How Can Services Be More Flexible?
We’ve defined what services are, why people care about them, and how they are changing. So, how can organizations make their services more flexible?
- Apply Marc Stickdorn and Jacob Schneider’s principles of service design: see through customers’ eyes, recognize that services are co-created between a customer and provider in real-time, that services happen in a sequence over time, that services must be made tangible, and be considered holistically.
- Design experiences for consistency and coordination across difference services (think meeting room furniture setup vs. A/V tech support) by creating a shared service philosophy among providers, shared names for services, shared definitions of service levels for things like response time, shared metrics for success, a common dashboard, and a regular rhythm of review.
- Put in place sensors, tracking, feedback platforms, and dashboards so that you understand service usage, satisfaction, and impact, and therefore adjust and evolve the services you offer. Whether it’s the type of food provided, the time events are scheduled, or the daycare pricing plans, people now expect to have input, for you to be transparent, and for you to learn and adapt.
- Enable more responsive programming with pop-ups that respond to requests and feedback and arise out of an empowered operations team with the right culture and tools. If everything has to be formal and scheduled a month in advance, you’ll miss opportunities to meet needs and not only support people, but surprise and delight them.
- Empower users to help themselves through self-service solutions like new vending options for food and technology, as well as to connect directly with their peers by planning and providing events like demos or peer to peer services. For example, an accountant providing tax help to neighbors at work or a graphic designer branding her neighbor’s new company.
As people, organizations, and workplace providers look to the future, it’s fair to say that workplace services are still in their early development, and technology will soon raise expectations and create new opportunities. We can think of this in eras, or perhaps more appropriately, like software releases, since services are the “software” that activate your spaces and interface with your people.
1.0 was the advent of a kind of “arms race” among tech companies in particular to provide the most competitive workplace services in terms of perks and amenities like food and massages, for which Google set the early standard. With companies trying to provide as many services as possible – particularly from our “deluxe amenities” category – the big challenge was and still is coordination across these different services to create a great employee experience.
2.0 has been defined by the rise of space-as-a-service with coworking, flex offices, and serviced offices leading the way. They are bringing these kinds of amenities to businesses across scales and sectors since not every company has the million dollar annual revenue per head business models of companies like Google or Apple. In this era, the real challenge is not just doing it affordably at scale, but also with greater flexibility and complexity – enabling different organizations to share things instead of just one company, accommodating the growth and change of these varied organizations, and meeting rising customer expectations.
3.0 will be the full integration of physical and digital experiences – call it the “phygital era.” This will be when today’s services are a given and people will expect seamless, personalized delivery at low cost. But beyond this, today’s mobile apps for booking rooms, navigating spaces, discovering programs, connecting with people, providing feedback, and adjusting temperature will seem downright primitive in comparison to tomorrow’s connected workplace. Fully equipped with sensors, feedback mechanisms, location-aware computing, a connected internet of things, and augmented reality experiences, workplace services will have a greater level not just of responsiveness, but prediction – and much greater value-add. Imagine getting feedback on your performance in real-time from facial recognition software or real-time language translation or holographic representation of a colleague across the globe. These are services that go beyond providing basic functions or satisfying perks. These are services that enhance not just the workplace, but work itself.