WORKPLACE DESIGN • DEMOGRAPHICS • GIG ECONOMY • SPACE AS A SERVICE • EXPERIENCE ECONOMY
We are living in a time where things have never moved so quickly, yet we are also living in a time where they will never move so slowly again. We work differently today than we did five years ago, and in the coming five years we will work very differently than we do today. In our rapidly changing world, we are more and more focused on designing workplaces for the unique attributes of people and organizations. But to do so, we need to understand the workforce we will be designing for.
Today’s intergenerational workforce is composed primarily of individuals born between 1945 and 1995, a 50-year span of unprecedented social and technological change. The current workforce can be divided into four groups, or cohorts, who share certain characteristics based on the social influences present in their formative years.
- Traditionalists, born from 1925 to 1945, are loyal, formal, respectful of rules and authority, and patriotic. They place duty before pleasure. In the workplace, they highly value job security and being recognized for their experience and dedication.
- Boomers, born in the “baby boom” of 1946 to 1964, are cooperative, optimistic, and idealistic. They highly value personal growth and gratification, and they challenge authority, but they were also the first workaholics. In the workplace, they prefer face-to-face conversations, and seek to be valued and respected as people.
- Generation X, born during the “baby bust” of 1965 to 1980, are skeptical, independent, self-reliant, and entrepreneurial. They were the “latchkey kids” whose parents divorced and mothers entered the workforce en masse; as young adults they witnessed the AIDS epidemic and the end of the Cold War. They were the first generation that didn’t expect to work for one employer their whole career. In the workplace, they value direct communication and dislike being micromanaged.
- Millennials, or Generation Y, born from 1980 to 2000, are realistic, practical, civic-minded, and technologically fluent. Raised by “helicopter parents” in a world made increasingly unstable by both terrorism and the Internet, they are the most highly educated generation yet; one in three of them possesses a college degree. In the workplace, they prefer to be coached rather than managed, and they value challenging work more than high salary or job security.
The arrival of the Millennials coincided with advances in technology that untethered us from the workplace, thereby enabling a rise in mobility. And with greater mobility comes more options, and the need to create compelling spaces that people want to come to, that draw them in, and that engage and empower them. Because now they have choices.
As Millennials mature and move into their next life stages, their desires and needs are shifting. A recent Leesman surveyi showed fewer differences between Millennials and Baby Boomers than were previously believed to exist. Life-stages actually have a bigger impact than generations. Most 20-year-olds are idealistic, ambitious and driven regardless of their generation. That is not something that was unique to the Millennials.
And every generation has embraced and brought new technologies with them to the workplace. The Gen Xers took us from the drafting table to Computer-Aided Design and Drafting (CADD), so a claim of being technology-savvy is not something unique to the Millennials. Change has always been a constant, and each generation has brought in its new ideas, new tools, and new ways of thinking.
The Millennials, however, have probably been the most over-analyzed generation of our time. You can’t define a generation by a snapshot in time; you need to give them time to grow, mature, and establish their own legacy. Yet the Millennials have been judged solely by what they were like in their early 20’s. And yes, they are ambitious, demanding, and filled with high expectations; but those are all attributes of a generation that will drive, and adapt to, change. And that is exactly what we need today to stay relevant and competitive.
Emergence of Gen Z
But a fifth group is on the horizon. Generation Z, born after 2000. The oldest members of this new generation are now in college and poised to emerge on the work scene. They grew up with even more technology than Generation Y did, hence they are also dubbed the “sceenagers,” or the “always-on” generation.
This group is truly the first of the “digital natives.” But the pressure to be always available, 24 hours a day, is creating anxiety, emotional detachment, and interpersonal difficulties resulting from a shortage of real-time, face-to-face human interaction. And their patterns physical inactivity and sleep disturbances are weighing heavily on them as well. In fact, the World Health Organization predicts that “Techno-stress”—the feeling that you need to be connected 24/7—will be the health epidemic of the next decadeii.
If employers want their Gen Z workers to be able to do anything requiring more than a couple of minutes of sustained attention, they should plan for work environments that help the Gen Z’s to dial down, not up. Members of this generation need comforting, soothing environments that enable them to achieve a higher level of thinking and do what they do best.
To help Generation Z, and everyone else, focus on work and aim for simplicity and comfort, we need to provide a variety of work zones tailored for different kinds of tasks, and to create “team-based environments” that support community and a sense of belonging. We need to design spaces that minimize visual clutter, simplify navigation, intensify contrast, and provide plenty of light – both for the aging Gen Xers and the overstimulated Gen Z’s.
Other Demographic Attributes
While much of the talk regarding workplace dynamics centers on the singular aspect of a multi-generation workplace, it isn’t the sole element of demographic. Globalization, the ability to work from anywhere, and social economic shifts have together created a diverse workforce in terms of age, gender, race, ethnicity, and personal traits. Today we are becoming a majority of minorities:
- Asian, Hispanic, and multi-racial groups will represent most the workforce by 2044;iii
- 47% of U.S. workers are women.iv And while there is plenty of room for improvement, women are rising to top ranks;
- Both men and women are working longer hours and retiring later;
- Gen Y already outnumber Boomers;
- Gen Z will start to join the workforce in less than five years;
- Twelve percent of adults have a learning disability. Most are entitled to Reasonable Accommodations under the Affordable Care Act;
- Attention Deficit Hyperactive Disorder (ADHD) diagnoses have increased 53% in the past decade;v and
- Introverts represent between 35 and 50% of the population.vi
Diversity not only expands the talent pool, it leads to better financial performance, increased innovation, higher employee and customer satisfaction, a better public image, and more.vii Workplace design and work cultures must go beyond accommodating personal differences; they need to invite, embrace, and celebrate them. Understanding who you are designing for and how their attributes and traits affect the way they work must be factored into the design of your workspaces.
Attracting and retaining talent is the leading driver of workplace change today. Nearly half (46%) of US employers and 40% of global employers report that they are struggling to fill open positions.viii
Yet the war for talent is just heating up. Baby Boomers will continue to exit the workforce over the coming decade. With them will go the experiences, knowledge, and talents they’ve acquired over a lifetime of work. The pipeline of recruits will be strained to replace them, both in numbers and in meeting the demands of Information-Age work. As the shift to a knowledge-based economy accelerates, employers will increasingly battle over a shrinking pool of qualified workers. We need to embrace the notion that we are designing for a more culturally diverse workforce.
Need for Choice and Flexibility
The workforce of tomorrow will expect, even demand, flexibility. According to the World Economic Forum, global business leaders predict “changing work environments and flexible work” will be the number one demographic/socio-economic driver of workplace change over the next decade, ahead of even cloud technologies, big data, AI, and robotics.ix
Specifically the Form report refers to a changing business model that includes a greater integration of external labor. The workforce today wants, and increasingly expects, to both earn a living and have a life.
- 64% of employees would opt for a lower-paying job if they could work away from the office (Deloitte)x;
- 74% of employees say “being able to work flexibly and still be on track for promotion” is of top importance in a potential job (Ernst & Young)xi;
- 74% of employees say “working with colleagues, including my boss, who support my efforts to work flexibly” is of top importance in a potential job (Ernst & Young)xii ; and
- 70% of parents and 59% of non-parents say lack of workplace flexibility, including no option to telecommute, would cause them to seriously consider leaving a job (Ernst & Young)xiii.
The Gig Economy
We are on the crest of a new wave that fluidly draws its strength from both internal and external talent from wherever it is to wherever it is needed. A report by McKinsey suggests that 10% to 15% of the working age population derive its primary income as independent laborers.xiv Another 10% to 15% do independent work, but don’t fully rely on those earnings; and an additional 17% of traditional workers would work independently if they could.xv
Understanding the dynamics of moving from a full-time workforce to contractor-based workers will be critical to having the right workers, with the right skills, when and where they are needed.
But the gig economy is still in its infancy. Driven by new generations of entrepreneurs, the growth of the contingent workforce is also having an impact on the workplace. The traditional way of working – commuting to the same office every day – isn’t working for many people today.
Be it the grueling commute, the lack of opportunities, the rift in the employer/employee contract, or the rigidity of the traditional 9-to-5 work schedule, people and companies are looking for additional options. Today 83 percent of U.S. adults believe the sharing economy makes life more convenient and efficient, and that “access is the new ownership.”xvi The sharing economy has enabled companies to use shared place as a viable part of the real estate strategy.
Independent workers rank their work-life satisfaction an average of 7% higher than traditional employees. When asked why they like their independence, words such as ‘empowered,’ ‘choice,’ ‘creativity,’ and ‘work atmosphere’ bubble to the surface.xvii Even gig workers who work that way, not out of choice, but because they need the work, report higher satisfaction than those who are office-bound.
Similarly, entrepreneurs report greater satisfaction with their work and life than traditional employees. In many cases, they, and the people who work for them, are happy to toil away in cluttered garages with what most of us would consider to be only the most basic of comforts. Their strong sense of purpose, connection, and choice is what drives them.
Space as a Service
The importance of place takes on new meaning as we evolve beyond simply providing space to creating what is now often referred to as “Space as a Service”, or “SaaS.” Shared workspaces offer easy and quick access to space in prime markets and reduce the need for long-term leases, furniture and equipment procurement, and the liability and demands of ownership.
This scenario can be ideal for companies that need to expand rapidly, face unpredictable growth patterns and/or a lack of resources to develop a new workplace. They usually do not mind an upcharge of between 15 to 20 percent and an extended period of obligation to the space, typically 3-5 year commitments. The fact that they can take less space initially but add more when and where they need it syncs up well with the ebb and flow of work and the demands of the workforce in many industries today.
A new model is emerging in which building owners offer available shared workplace and amenities to their tenants as a way to accommodate their shifting needs. This model alleviates the risk associated with longer-term leases and frees up all parties to react more quickly to changing market conditions. Companies are beginning not only to embrace elements of SaaS but also to design their own creative offices and “maker spaces.” In many markets coworking and shared space is becoming the new amenity.
If employers want their Gen Z workers to be able to do anything requiring more than a couple of minutes of sustained attention, they should plan for work environments that help the Gen Z’s to dial down, not up.
Why is the focus on workforce so important? In an age in which ideas and knowledge drive the economy, people are the chief currency of every business. With up to 80 percent of a company’s expenses coming from human resources, it’s vital that the workforce be engaged and empowered to enable the highest productivity. Yet according to the latest edition of Gallup’s annual engagement survey, only 32 percent of the U.S. workforce is engaged, with 50.8 percent not engaged and 17.2 percent actively disengaged.xviii So if you are designing the workplace of the future, you need to understand who the workforce of the future will be.
Though many factors contribute to these statistics, research by Advanced Workplace Associates (AWA) and the Center for Evidence Based Managementxix has identified six factors that have the most impact on knowledge worker productivity:
- Social cohesion
- Perceived supervisory support
- Information sharing
- Common vision, goals and purpose
- External communication
In workplaces that lack these attributes, engagement and productivity often suffer. A well-designed workplace that reflects a company’s organizational DNA can be a powerful tool for enabling social connections, sharing information, and building communication and trust.
Just as a bad attitude is contagious, a good one can be infectious. A study by the Harvard Business School and Cornerstone OnDemand showed that in densified spaces populated with productive people, the efficiency and effectiveness of nearby workers increased. But employees who sat near toxic workers experienced a “spillover effect.”xxi This sphere of influence diminishes outside a 25-foot radius. Given that the average per-person space allocation in the modern workplace is 150 square feet, one bad egg—or disengaged worker—can negatively influence up to 16 people without moving from his or her desk.
Entrepreneur Jim Rohn once said that, “You are the average of the five people you spend the most time with.”xxii And National Geographic Fellow and New York Times bestselling author Dan Buettner has identified “Blue Zones” as the parts of the world where people live the longest. On his list of the nine specific characteristics of these places is choosing the right tribe, which means surrounding yourself with people who support positive, healthy behaviors.xxiii
We are living in a time where things have never moved so quickly, yet we are also living in a time where they will never move so slowly again.
However, the traditional practice of limiting people’s ability to choose where they sit in a workplace often has a negative impact on their satisfaction and capacity to focus on their work. Free-address workplaces, where work locations are unassigned and employees are free to move to a variety of settings and select one that matches their work style for the task at hand, enable people to select the right tribe. Because they are not assigned a permanent spot, free-address employees can self-select their neighbors.
This organic selection process diminishes the ability for the negativity of toxic employees to rub off on others. But in the void of strong leadership and/or a positive culture, self-selection can also lead to the formation of cliques. It is important to use the space as intended and reinforce that by encouraging movement, use space based on the task at hand and empower employees with choice.
No workplace can single-handedly solve an HR issue or cure employees of a bad attitude. But we can offer people options, embed healthier alternatives, and provide choices. We need to ensure that people–our most valuable asset and the true currency of business–are happy, healthy, engaged and empowered. By truly understanding an organization and designing space that is tailored to match its organizational DNA, we can create workplaces and user experiences that help everyone succeed.
To gauge how we are doing we can start by looking at the basics. We are human beings, and therefore most of us are creatures of habit, territorial, and social pack animals. Open work environments have often disturbed our ability to meet those basic human needs, and they therefore do not enable us to meet the basics of Maslow’s Hierarchy of Needs. To do that, an environment must first meet the physiological needs of the occupant – lighting, temperature, movement, air, noise.
Once those basics are met we can then begin to address secondary concerns of safety, privacy, and ergonomics. But if those needs aren’t met, it is consciously or even subconsciously unsettling and we are unable to achieve a higher level.
When people were in offices with private workstations most of them felt somewhat grounded and protected. But when we move people into an open environment they often feel exposed and constantly distracted. The open environment may have created more open communication and collaboration, but it often came with an unwanted side effect – unsettling discomfort. In the open plan people often feel more vulnerable; that prohibits them from operating at a higher level that produces greater engagement and personal satisfaction, to say nothing of organizational productivity.
When we create environments that address the basic means of people and allow for a healthy balance of focused individual work and collaboration, via variety and choice that encourages movement, we put the power of place in the hands of people.
The workplace of the future is about what you do, not where you do it. We are focusing less on WorkPLACE and more on WorkHOW. As a side effect to this new paradigm of work, the very purpose of an office will change. Instead of being a place that you go to for 40 hours a week, the office will morph into a place where you go to engage others.
After all, work can happen, and is happening, anyway, or what is the real purpose of the office? It is a connection point. And whether you work from your home or the corporate office has less to do with personal preference and more to do with the type of work you do and the amount of interaction you need to be effective.
If your business is oriented primarily towards sales and consultative activity, then not only do you not need to be in the office every day, you probably won’t make any money if you are. On the other hand, if your business is primarily creative or professional services, then bringing your team members together so they are synergized, think as a unit, and ideate collaboratively is critical.
Your space solution should follow the needs of your organization and your people. Space solutions today must be varied enough to accommodate a vast set of individual and organizational needs while being able to change on a dime.
As we shift from a “commodity-based” to an “experience-based” society, place takes on new importance. Organizations are looking to create “curated experience” and employing “Experience Managers,” “Place Concierges” or “Chief Cultural Officers’” to ensure employees’ needs are met and they are engaged and vested in the organization.
These curated experiences often offer employees an ala-carte workplace experience with a menu of services, location, and support. Opportunities for sharing information – visually, graphically and via technology – are all important to connect teams today and are often the most-overlooked element in any space solution.
Today’s intergenerational workforce needs to have the ability and flexibility to adapt to rapid changes. Understanding the workforce we will be designing for is a start; empowering them with options, choice, and solutions that can meet the rapid pace of change is critical to the success of any company. More so than ever before, the diversity of the workforce demands a diversity of workplace solutions.
i Leesman. (2016). Leesman Review. http://leesmanindex.com/wp-content/uploads/Lees006_Review_21__SP.pdf. (accessed 29 June 2018).
ii Gina Soleil, “Workplace Stress: The Health Epidemic of the 21st Century.” Huffington Post, December 6, 2017.
iii “Workplace Diversity and Inclusion Gets Innovative,” HR Today, SHRM.org January 16, 2017.
iv https://blog.dol.gov/2017/03/01/12-stats-about-working-women (accessed 10 July 2018).
v “The State of Learning Disabilities Facts, Trends and Emerging Issues,” National Center for Learning Disabilities, 2014.
vi “Introverts, Extroverts, and the Complexity of Team Dynamics,” Harvard Business Review, March 16, 2015.
vii Vivian Hung, Dennis Layton, and Sara Prince, “Diversity Matters,”, February 2, 2015, McKinsey & Company, based on a proprietary dataset for 366 public companies.
viii “2016-2017 Talent Shortage Survey,” Manpower Group.
ix “The Future of Jobs,” World Economic Forum, 2016.
xi EY.com, “Study highlights: people want flexibility.” (https://www.ey.com/us/en/about-us/our-people-and-culture/ey-study-highlights-people-want-flexibility).
xii EY.com, op. cit.
xiii EY.com, op. cit.
xiv McKinsey defines independent workers as individuals with a high degree of autonomy, who get paid by the task, and who have a short-term relationship with their customers. This approach differs from that of other organizations who include sub-contractors working under long-term contracts or those who may be legally classified as independent contractors but have little control over
xv “Independent work: Choice, necessity, and the gig economy,” McKinsey Global Institute, October 2016.
xvi Claburn, Thomas, “The Sharing Economy: Access is the New Ownership,” Information Week (2015, April 15). Retrieved from: https://www.informationweek.com/mobile/mobile-devices/the-sharing-economy-access-is-the-new-ownership/d/d-id/1319946 (Accessed 13 July 2018).
xvii “Independent work: Choice, necessity, and the gig economy,” McKinsey Global Institute, October 2016.
xviii Amy Adkins, “Employee engagement in U.S. stagnant in 2015” (Gallup.com, January 13, 2016).. http://www.gallup.com/poll/188144/employee-engagement-stagnant-2015.aspx. (Accessed 13 July 2018).
xix http://cebma.org/, Leiden, The Netherlands.
xx Advanced Workplace Associates. “The 6 factors of knowledge worker productivity.” http://www.advanced-workplace.com/wp-content/uploads/2015/04/6_Factors_Paper.pdf. (Accessed 29 June 2018).
xxi R. Greenfield, “The ideal office floor plan, according to science,” Bloomberg (1 August 1 2016). http://www.bloomberg.com/news/articles/2016-08-01/the-ideal-office-floor-plan-according-to-science. (Accessed 29 June 2018).
xxii K. Sato, “Why the five people around you are crucial to your success.” Entrepreneur (9 May 2014). https://www.entrepreneur.com/article/233444. (Accessed 13 July 2018).
xxiii Blue Zones. “Reverse engineering longevity.” https://www.bluezones.com/2014/03/blue-zones-history/ (Accessed 13 July 2018).
Kay Sargent, ASID, IIDA, CID, LEED® AP, MCR.w, is a Senior Principal and Director of WorkPlace at HOK. In her 33 years of experience Kay’s work has taken her to multiple continents where she has worked with companies on their global real estate strategies and designed workplaces of the future. Kay leads HOK’s WorkPlace team where she oversees a team working with clients to deliver workplace solutions around the world. Kay serves on the board of the International Federation of Interior Designers /Architects and on the CoreNet Global Board. She has also served on the International Boards of IIDA, ASID, and NCQLP. Kay is one of the founders of the IFMA Workplace Evolutionaries, WE community, and a Founding member of the DC Chapter of Upward.