What is productivity in the hybrid-work model era?

As the workforce steps away from the era of pandemic-driven restrictions, the purpose of the city-based office space is undergoing rapid evolution.

Global office vacancy rates have edged up despite efforts made by organisations to boost office occupancy, with the goal of improving collaboration and productivity.

“Some discussion has been around whether the office sector is dead, because people want to work from home five days a week,” says William Young CPA, Australian Unity’s fund manager – mortgages, and chair of CPA Australia’s Victorian SME Committee.

“But a lot of people actually want to be in the office. A lot of people, particularly the younger generation, want to be around others and to collaborate. They can’t do this while working from home.”

Offices still play a vital role, but that role has been forever changed by the shifts in behaviours and attitudes brought on by the pandemic.

Time spent in the office is no longer purely about productivity and performance, Young says. It is about connection, socialising, learning from others and discussing ideas.

New office spaces must be ready for such activity.

Larger, varied office spaces

As recently as nine months ago, businesses were looking for significantly more floor space than they did prior to the pandemic, mostly to allow for social distancing. However, that practice is playing itself out, Young says.

“Before the pandemic, businesses would typically need nine square metres per person,” he says. “Right now, we’re seeing one person per every 10 to 10.5 square metres. It’s an increase, but it’s not dramatic. And it’s less about social distancing.”

Why the extra space? Many employees acknowledge the value of collaboration, and that the quality of collaboration is greater when done in-person, but they also counter that they are more productive when they work from home.

In response to this, some organisations are setting up extra social areas for staff, Young says, the purpose being a clear separation of collaboration spaces and spaces for focused work. They are creating games rooms where people can discuss ideas in a more creative environment, or casual dining, breakout and canteen areas where staff can enjoy a discussion over a relaxed meal.

“At the same time, desired office locations are shifting, too,” Young says. “There’s been a change of focus to city fringes and to regions, meaning staff don’t need to spend as much of their day commuting to the city centre.”

What about productivity?

There is plenty of evidence, from before, during and after the height of the pandemic, to say that flexible working policies are very good for productivity.

In a report published on the Bloomberg news site, Nicholas Bloom, the William D. Eberle professor of economics at Stanford University, says he has studied remote work since 2004.

“I found that pro-work–life balance policies – maternity leave, job sharing, part-time work and work from home – were positively correlated with good management and positively correlated with good firm performance,” he says.

One of Bloom’s studies from 2011 found productivity rose 13 per cent for people who worked from home. Two-thirds of this increase came from working more minutes – people were never late, and their breaks were shorter. One-third came from staff being more productive per minute.

Similarly, there’s also great value in the collaboration encouraged by today’s offices. That value comes through “learning by osmosis”, Young says.

 

"A lot of people, particularly the younger generation, want to be around others and to collaborate, They can't do this while working from home."

 

“I’ve heard from a number of companies, especially those involved in law and accounting, that graduates don’t want to contact their superiors on Teams every 15 minutes to ask for help,” he says.

“When they’re sitting next to each other, they can pop their head up and ask a quick question. That kind of learning is appreciated by everyone in a workplace.”

Along similar lines, cross-team collaboration is easier and more natural when people are together.

It’s automatic and organic, rather than diarised and forced.

“That kind of collaboration often comes into play as a result of completely informal meetings, chats over the photocopy machine or during Friday night drinks,” he says.

Those interactions often lead to voluntary collaboration where both teams are willingly engaged in the project, as they are choosing to share their knowledge, rather than being told to.

How to excel at office collaboration

All the pool tables, free breakfasts and soft furnishings in the world won’t help a business that does it the wrong way, Young says.

First, if people are asked to come to the office, it should be on days that members of their team, and related departments, are present.

“Nobody wants to come to the office to have meetings with their colleagues on Teams,” he says.

“Then, even more importantly, you need to make sure your staff are motivated to do what they like doing and keep them happy while they do it.”

Businesses that Young witnesses succeeding are the ones that get culture right.

“In the end, it’s not an office thing,” he says. “It’s about letting people explore what they really want to do and what they’re good at.

“In that culture, people will collaborate when they’re in the office because they really want to share their knowledge.”

Importantly, Young points out, we will continue to see innovation and evolution in the office sector, and office usage, over the short to medium term.

We are only in the early days of deciding on the new purpose of the office, so watch this space.