The workplace has been turned on its head since real estate services firm JLL's last "Future of Work" survey was conducted four years and a global pandemic ago. And while office needs have been evolving in the midst of a global health crisis, one thing remains certain among the surveyed decision-makers: The office remains critical to conducting business.
Yet even as office space remains a key part of the workplace, JLL's global researchers say decision-makers have entered "an inflection point for real estate" as businesses rethink the purpose of their office portfolios. Most expect workers to split time between home and office, and the key to getting them to spend more time at the workplace is to make spaces feel safe and inviting.
"There has been a lot of questioning as to whether hybrid is here to stay as a viable workplace option, and the survey shows hybrid is here to stay," Peter Miscovich, an executive managing director with JLL, told CoStar News. "Another trend confirmed by the survey is the investment companies are making in the quality of their space and the quality of the experience."
JLL's survey, released Thursday, canvassed 1,095 senior-level corporate real estate decision-makers between April and May. More than 40% of respondents are responsible for real estate decisions affecting more than 5,000 employees around the globe. Nearly a quarter of respondents oversee real estate for companies with more than 10,000 employees worldwide.
The survey adds some empirical guidance to what would otherwise be hunches for JLL's clients, many of which are Fortune 1000 companies. These firms are looking to make yearslong decisions regarding workplaces that not only house employees, Miscovich said, but support evolving ways of working and help recruit and retain talented employees.
Getting the mix right will not happen overnight. JLL's experts say companies could be experimenting and putting their ideas in place through 2025. By then, the JLL survey found more than half of companies plan to have moved to an employee-choice model where workers have greater authority to orchestrate their working patterns. Prior to the pandemic, only 8% of employees had this choice.
The real estate services firm distilled the survey's findings to address four key concerns among corporate decision-makers of real estate.
Integrate Hybrid Working Into the Office Layout
In the JLL survey, 77% of real estate executives agree that offering remote or hybrid work is critical to attracting and retaining talent in the future. Expect this to be a theme for the next three years, JLL said. Steps include exploring flexible space options, with 43% of companies planning to invest in flexible space between now and 2025. More than half of respondents say they plan to lease flexible space through a third-party provider.
Portfolios Will Be Shaped by Environmental and Social Causes
Nearly 8 in 10 companies surveyed say their employees expect their workplace to have a "positive impact on society." This has 77% of survey respondents saying they plan to invest in quality space, with green strategies having a direct impact on real estate decisions. In the survey, 74% of respondents say they are willing to pay a premium for green credentials.
Investing in Technology To Boost Workplace Performance
By 2025, nearly 80% of companies plan to incorporate more than 10 anchor technologies, including workplace apps, virtual reality and remote-work technology, into their organizations, the survey found. Only 13% of executives say they are collecting data on a real-time basis using advanced analytics today.
Real Estate Is Becoming More Complex
Seventy-five percent of real estate decision-makers expected to have an even greater reliance on external partners to guide efforts to promote health and well-being services as well as sustainability initatives.
That likely will have companies reconsidering their real estate portfolios. Some companies are increasing their real estate footprint by as much as 30%, Miscovich said, while other companies plan to reduce their real estate needs by as much as 30%.
One thing remains certain, he said: "Lower-quality buildings and sites that don't meet [environmental, social and governance] criteria and don't meet other workforce talent amenities" are being exited and divested as part of these portfolio optimizations.