In a matter of weeks, COVID-19 has forced the most dramatic shift in the way we work in living memory. From freelancers to multinational corporations, businesses the world over have had to adapt to social distancing, with working online, and from home the only viable option for many. As the dust settles and we begin to survey our new working landscape, two things stand out. Firstly, how (relatively) easy it was for most industries to adapt to online ways of working. Schools and universities the world over shifted from face to face delivery to online teaching in a matter of days. Industry conferences were replaced with webinars. Business lunches became Skype or Zoom calls. Should the pandemic have struck just twenty years ago the transition would have been nothing like as smooth. But the technological infrastructure to facilitate online working is now fit for purpose, and has been for some time. There is a sense that many organisations should have made the shift a long time ago.
Secondly, while the pandemic and the speed of the change have undoubtedly caused a lot of stress and forced difficult decisions, not all the short-term changes are negative. For most businesses the coming year will not be a process of simply returning to how things were, but will involve selecting the positive aspects of what has been learned in the enforced shift online.
The question we try to answer here, is what this new world of work will look like? How will the post-Covid office be different, and how will people’s working lives change? And crucially, how can organisations ensure they make the transition successfully?
The Shift to Flexible Working will be Cost Driven
Until recently, many have seen flexible working policies as the preserve of start-ups and technology companies, and as synonymous with breakout zones, bean bags and staff craft ale bars. Despite the much-cited benefits to employees’ well-being and mental health that flexible working brings, many companies have been reluctant to adopt this approach, sticking with a more traditional system where employees are tied to location and time. The current pandemic has shattered this model. Suspicious middle managers have seen that their staff can indeed be trusted when not under their watchful eye. Tech ‘dinosaurs’ have realised that video conferencing really isn’t so hard after all. The ground for a new, more flexible way of working has been laid. Going back entirely is not an option.
However, those anticipating a more spacious office in the future should accept that the major driver of these moves to more flexible working will not be driven less by concern for well-being, more by the tremendous cost pressures that are likely to remain long after the pandemic has passed. Already, the economic cost of Covid-19 appears daunting; the forecast is for GDP to decrease in Australia, and in New Zealand over the next 12 months is unprecedented. Managers in all sectors will have to find ways to cut costs.
Luckily for both corporate bosses and their employees, there is overlap between a way of working better suited to employees’ lifestyles, and the measures that will reduce costs. One key expense for every business is real estate, which accounts for an average of 8% of an organisation’s outgoings. Flexible working policies can reduce the need for space, as the office does not need to accommodate the entire staff at the same time. While the ability to work from home, or work flexible hours may have been a privilege in the past, it will become the norm in many industries going forwards. Technology usage will also increase. Travelling for a face-to-face meeting will happen less; video conference calls will become even more common. Expect travel expenses to decrease dramatically in most industries, even once the pandemic itself is over.
The Four Layers of Flexibility
So what does this increased flexibility mean? It’s vital that employers don’t simply take flexible working to mean allowing staff to work from home occasionally. To truly adopt this approach requires a shift in mindset, and the willingness to trust staff to carry out their roles. What’s more, it requires forethought and planning across a range of different areas. We see four key dimensions that employers will need to consider as they develop their frameworks for the post-Covid-19 era of work.
1. Flexibility in Place
As discussed above, the idea that an employee must be in a certain location to carry out their role has been shown as out-dated in many industries. Employers should look to implement modern work from home policies and activity based working in their new models of working.
2. Flexibility in Role
Cost pressures may well force companies into difficult decisions around personnel, as staff costs make up an average of 80% of a company’s outgoings. Being more flexible with the way roles are allocated will be one way to manage this. Job sharing, part time working and employing contractors are likely to become more common in the coming years.
3. Flexibility in Time
Flexible working models should include a number of ways for employees to structure their time. This could include a compressed working week, staggered start and finish times, and amore flexible hours policies, all of which will help reduce the cost of real estate.
4. Flexibility in Leave
A good flexible working policy will also make provisions for allowing more unpaid leave to be taken, and will be more lenient with regards holiday transfer and time in lieu.
Management by Objectives
The inevitable move to this way of working will require a shift in management style for many organisations. With more flexible working in place as a necessity, management by objectives (as opposed to ‘line of sight’ management) will become the new normal.
This approach may be counterintuitive for some managers, and management training on soft skills and coaching styles of leadership will be required in many organisations. Leadership coaches may well be busy.
Alongside this, the need for accurate people management systems that allow for clear tracking of KPIs will become a must, not only in large corporations where they are already in place, but for SMEs as well.
Adopting this approach, and ensuring its success, will become easier once a balance between working in and outside of the office has been struck.
The Future Office Mid- to Long-term
At present, social distancing and rules around travel are making many of the changes discussed essential. Even as we start to return to work, some short-term changes such as increased hygiene procedures, ‘shift-pattern’ solutions to minimise contact, and social distancing policies will be required. But, mid to long-term, once social distancing has passed, what changes can we expect to remain? What will the workplace look like once normality has resumed?
Up to 50% Less Office Space
Firstly, we would expect to see a significant decrease in the office space per employee ratio over the coming years. This has been a trend anyway, but will be greatly accelerated by the Covid effect.
The introduction of activity-based-working combined with work from home policies can reduce real estate requirements by up to 30-50%. In real terms: an office with 100 employees has on average 1,200sqm rentable office space; this may reduce to 600-700sqm in the coming years, saving significant costs. Even if firms don’t choose to relocate, the reduction in space per employee ratio will allow for ‘spaceless growth’ over the coming years.
A Socialising & Collaboration Hub, where you can also work
Secondly, there will be a shift in the way employees see their workspaces. As many have come to realise, the office does provide a valuable space for collaboration as well as intangibles such as socialising and bond-building. The office will become a hub – a place that employees choose to go to fulfil a certain type of work. This will necessitate a shift from the office being a facilities provider to becoming a service provider; the space may reduce, but the quality and available amenities may become higher. As well as hot desks and meeting spaces, employees will have access to dedicated collaboration rooms for project work for extended periods of time. A new role may be created in many companies in the form of a community manager, who oversees the smooth functioning of both the physical and virtual spaces.
There will be a significant push for businesses in almost all industries to move from paper-based storage to cloud-based facilities, thus allowing for the kind of location-flexibility discussed earlier. In the office itself, technology will become even more pronounced. Dedicated video conferencing rooms will be a necessity, as will personalised equipment. IT may well be the one area where spending will need to increase over the coming years, though this should be seen as an investment.
Making it Work
We have been measuring the success of workplace transformations since 2012. In our experience, there is a significant difference in how successfully organisations adapt to the transition to a more modern way of working. Some take to it instantly, increasing productivity and reducing costs, all the while reporting increased employee satisfaction. Others struggle with the change and experience the opposite results. What makes the difference? From our research we know that there are four key factors to success:
- Get the basics right. Make sure all the processes are smooth, and that the technology works. There is nothing more frustrating than the file that won’t upload to the staff intranet, or the team meeting where you can’t connect.
- Develop a clear flexible working framework, based on the principles above, before implementing the new way of working.
- Provide a structured change management process with ongoing support. This may include the kind of management training we discussed above, or the creation of the community manager role to act as a go-between for managers and staff.
- Make sure the leadership team is engaged in the process and crucially, walks the talk. One of the largest areas of frustration for employees is being moved to a hot desk environment while seeing the manager retain their own office.
In summary, while the immediate disruption brought about by the Covid-19 crisis will have been stressful and difficult for many organisations, technology has made the switch to ‘stay at home working’ possible. As we move out of the crisis, the challenge will be for managers to decide how they strike a balance between this new, more flexible way of working and the old routines.
At Meta5 we specialise in workplace strategy, and help businesses of all sizes across Australasia and beyond adapt to a more modern way of working. If you would like to discuss how your organisation can continue to thrive beyond the current pandemic, contact Chris email@example.com