The Australian office market is experiencing new levels of confidence in 2022 with tenant demand increasing and vacancy stabilising in most capital cities. But will employees want to return to office full time or maintain the hybrid working arrangements?
We explore employees’ motivations behind flexible working arrangements and what the driving factors are in getting them back to the office.
Employees are keen to return to the office but are demanding flexibility they have experienced whilst working from home to be part of it. A new way of life that they want to maintain post-pandemic are things like staggered start and finish times to avoid peak hours, and work-from-home perks like dropping kids to school or attending medical appointments during the day.
In a PwC survey published in November 2021, 2,000 city residents revealed that 40% planned to return to their traditional place of work full-time post-pandemic, with 33% and 27% opting for hybrid or remote work respectively. The research also revealed that businesses needed to incentivise staff to return to on-site work, because even though most people intended to return to the office if employers did not offer perks different from those available at home they would not go back.
Things such as better training, cultural connection, workplace wellbeing, innovation and career progression are some of the ways businesses are enticing workers return to office.
The notion of people wanting to come back to the office was evident even during the pandemic, albeit not as strong, as reinforced by a survey conducted by JLL in October 2020 and March 2021. The findings showed (see graph) that in the six-month period, the average number of days a person wanted to work from home had decreased from 1.9 days to 1.5 days. The number of people that never wanted to work from home during the week had increased from 28% to 33%, while the number of people who wanted to work 5 days from home had decreased from 12% to 8%.
Staggering employees’ finish times to reduce time spent commuting during peak hours is not only a great flexibility perk but could potentially increase their productivity as well. In research conducted by the NSW Government (NSW Remote Working Insights November 2021), 64% remote workers felt they were more productive working from home due to reduced commute times, saving on average 1 hour and 4 minutes a day. It is reported that 17 minutes on average of this time is used for extra work, while the remaining time is used for personal or family reasons.
But working from home may not be as productive for all employees due to longer hours worked. A study of 10,000 skilled professionals at a large Asian tech company found that productivity and output had fallen, even though employees were working approximately 30% longer hours with an 18% increase in hours worked outside of standard business hours. This was attributed to having more online meetings and needing to catch up on work outside of this.
Social interaction and professional development which rely on personal face-to-face interaction are one of the key benefits of working in the office.
According to a JLL survey (see graph), that asked what people missed most about being in the office, 22% missed the social interactions that took place in the office, with these interactions harder to replicate over video calls.
Kathy Sozou, a Partner at McGrathNicol, sees the benefits of going back to the office, with her team adopting the hybrid working arrangement with 2 days at home. These benefits include better training, by listening and learning from more senior members of staff, seeing how they manage their days, talk on the phone and complete daily tasks. Kathy has stated that there is a cost in juniors not seeing that, highlighting the development consequences of not being in an office environment or professional setting.
Even though Australian companies such as Atlassian and Canva are not making employees return to the office full time (Canva currently requires employees to come in a minimum of 8 days annually), many other businesses continue to see their office as an integral part of their culture and identity.
These organisations are increasing their footprint, to accommodate employee growth and to entice employees back to the office with larger break out spaces and collaboration areas. This can be seen in certain industries such as health, digital economy (i.e. cyber security), professional services, finance and insurance who are taking up more space in the CBD towers.
In the end, businesses play a vital role in employees return to the office and will have to provide compelling reasons and perks such as mentioned above, to entice workers back. Businesses will also have to create a positive culture whilst working in the office, which is likely to impact employee retention and talent attraction.
Looking to return to the office? Talk to the team at Tenant CS. Our consultants are experts in the field, discussing real estate strategies with some of Australia’s most forward-thinking CFOs, CEOs Head of People and Procurement Managers, allowing us to tailor the right solution for your staff and your business.
We can help you with workplace strategy, landlord negotiations and office relocation if you have an upcoming lease expiry and want to take advantage of the current market conditions. Shoot us a message here, we’d love to hear from you.