Beer on tap. Pinball machines. A salsa dance room. If you search long enough, you can find just about anything in a modern office space. Today, companies are using their workspaces to attract and retain top talent. An office building is no longer just an asset on a firm's balance sheet. But, it is not the primary driver of productivity or innovation, either. The past year was a catalyst for perhaps the largest shift in workspace design thinking since the tech boom.
First, a bit of history. The first office buildings were built in Europe in the mid-18th century. Since then, social, economic, and environmental trends have shaped the way these spaces are designed and used. This article by K2 Space provides a concise overview of how modern workplaces have developed [1]. At first, offices arose when trading companies required centralized places to conduct businesses. Over time, the importance of efficiency was overtaken by the need for teamwork and innovation. For decades, firms tried to balance these objectives. Many were doing this well.
Before the COVID-19 era, offices of major technology companies were fighting for top cool points. As demand for talented engineers was high, big tech needed to cater to engineering culture – creativity, collaboration, and comfort – in order to encourage innovation and hard work. Google headquarters in New York City famously serves three meals a day to its employees [2]. Facebook’s Menlo Park campus in Palo Alto is a miniature city, providing healthcare, exercise spaces, and rooftop gardens to bring employees’ needs to them. The “home-away-from-home” paradigm has been the strongest driver of workplace design in recent decades.
That is, until the pandemic started. It became clear that instead of the office becoming a home, every home would become an office. Every workplace in the world needed to rethink what it meant to be “at work.”
Drivers to Redesign the “Workplace”
Due to COVID-19, cultural shifts, and demographic changes, an interesting trend has emerged in data about the way we work in America.
Civilian labor force participation rate (%), seasonally adjusted [3]
A changing economy. The labor force participation rate is a measure of working-age civilians who are employed or actively seeking employment. Today, the LFPR is at the lowest it has been since the 1970’s, when women in American society increasingly sought jobs [3]. Why is this the case? First, the U.S. population is aging, so more and more people are retiring every year. Second, the cost of living is increasing while most wages are not (check out the EPI’s Wage Tracker for more information). Thus, we see adults opting for COVID-era benefits rather than going to work at low-paying jobs.
Public health. The last two years have not left anyone untouched by hardship or discomfort. Even those who were physically healthy likely had to face loneliness, anxiety, or social isolation [4]. When people are left by themselves and forced to turn inward, it is understandable that they may feel unsatisfied with a standard nine-to-five at a job they do not feel fulfilled by.
Remote work. With entire firms working virtually, the concept of location-based pay has become less relevant. Employees whose salaries did not decrease, but who moved to lower cost-of-living areas may see compensation as a less relevant factor in their search for a job.
The Challenge
The combination of the above factors has led the technology industry to rethink its management style. When you take a job and strip away the “cool perks” and “fun vibes”, you are left with a clearer picture of the work you do, the people you do it with, and how those two things interact. The challenge of restructuring a company’s culture while maintaining – or even improving – employee performance is, fundamentally, a design problem. Firms must empathize with their employees, create and test many ideas, and collect and analyze feedback. The workplace is not just a physical space. It is an interaction between the place(s) people work, the culture they are a part of, and the policies they must follow. There are no control groups to test against, no yardsticks to measure efficacy, and no definitive answers. That is what makes the problem exciting. And, maybe a little daunting.
A Shifting Perspective
Work-from-home life was undoubtedly challenging at first. But soon, many came to find hidden benefits that they now value and seek in potential job opportunities.
In an interview conducted with Andrew McDonald (Director, Corporate Real Estate & Operations at Q2 Software based in Austin, TX), I learned about the process of designing an office and work policies in the light of new work values brought on by the pandemic.
It seemed counterintuitive for Q2 to move forward with a large office project while tech companies across America opted not to renew their leases with property owners amidst the pandemic. However, Mr. McDonald and the People department at Q2 realized that the new space would give management an opportunity to evaluate how it could best serve its employees and customers. I got to check out the campus myself and saw some notable details.
The new space is full of various zones that are specifically designed for different kinds of work – brainstorming, Zoom meetings, solo work, pair programming, group collaboration, etc. There are no C-suite corner offices. Executive-level offices are located on the interior of lower floors and are surrounded by glass to encourage interaction and approachability.
Q2 realized early on that flexibility was the direction of work moving forward. The company changed its policies to permanently allow any employee to work in-person, hybrid, or fully remote. I was surprised to hear that to be considered fully “in-person,” one only has to come into the office for 4 hours a day for three days a week. Gone are the days of strict nine-to-fives, where employees are constantly watched while on the clock.
Here are some starting ideas that management teams can use for cultivating positive work spaces.
Give people ownership of their time. Holding employees accountable while being respectful of their time can give them more autonomy to work the way they do best. Companies that implemented work-from-home options have seen higher employee retention and fewer sick days taken [6].
Build spaces that allow people to work the way they want, not the way that management wants. Some people need quiet and isolation. Others want to be surrounded by teammates. Conference rooms are useful, but deplored by virtual attendees.
Tying people to one specific place to work eliminates the flexibility that can come with a change of environment and pace. Whether it’s encouraging people to leave early on a stormy day, or giving them the option of working anywhere in the world, flexibility is undoubtedly a factor on a job-seeker’s checklist.
The Verdict
The workspace is a complex, multi-functional environment with a direct impact on employees and how they work. Its design is guided by work-life styles, management methodologies, and cultural values. 2020 tipped the scales of the technology job market to be very much in favor of employees. In the process, firms had to do some challenging soul searching in order to understand how they could retain talented employees in the absence of surface-level benefits [5].
Given an openness to change, a human-centered mindset, and strong values, any company can design an environment that allows employees to bring their best selves to work every day. Happy and empowered people can lead to stronger, more motivated teams and better work.
A special thank you to Andrew McDonald from Q2 for taking the time to share his insights with me.
References
[1] History of Office Design | From the 1700’s to Today | K2 Space. (2022, January 6). K2space. Retrieved April 14, 2022, from https://k2space.co.uk/knowledge/history-of-office-design/
[2] 20,000 Meals a Day At Google - A Frank Experience. (2019, October 29). [Video]. YouTube. https://www.youtube.com/watch?v=S1zb1kgDvRo
[3] U.S. Bureau of Labor Statistics. (2022, April). Labor Force Participation Rate. FRED. https://fred.stlouisfed.org/series/CIVPART
[4] Panchal, N., Kamal, R., Cox, C., & Garfield, R. (2021, July 20). The Implications of COVID-19 for Mental Health and Substance Use. KFF. Retrieved April 14, 2022, from https://www.kff.org/coronavirus-covid-19/issue-brief/the-implications-of-covid-19-for-mental-health-and-substance-use/
[5] Davidson, P. U. T. (2022, January 4). Great Resignation: The number of people quitting jobs hit an all-time high in November as openings stayed near record. USA TODAY. Retrieved April 14, 2022, from https://eu.usatoday.com/story/money/2022/01/04/great-resignation-number-people-quitting-jobs-hit-record/9083256002/
[6] Nicholas Bloom, N. B. (2020, June). How working from home works out. Stanford Institute for Economic Policy Research (SIEPR). https://siepr.stanford.edu/publications/policy-brief/how-working-home-works-out
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