What are the key challenges companies face now?
The biggest drive for most of our clients now doing their office designs to attract and retain talent that comes up continuously.
Another driver is that technology has advanced broadly, but the technology within the workplaces has not advanced at the same pace. Therefore, there are a lot of discussions around workplace equity and steps companies need to take to ensure that everybody has the same experience, whether they are working remotely on at the central office.
Leases and real estate are getting more expensive as well as the cost to build. So being more efficient with how you use your floor plan or how you construct presents a fantastic opportunity for the bottom line.
In New Zealand, we are seeing a lot of companies that are afraid to decide and change how they work or change how their offices are. They are sort of sitting stagnant. The ones that are deciding to move, which a lot of the time is fueled by lease end, an external factor or they are still genuinely concerned that things are going to change a lot again. They want us to make sure that we have a future proof for future change, which is difficult to predict.
New Zealand is 60th in the world in terms of rental cost but third in the world in terms of fit-out cost. The fit-out cost in New Zealand sometimes is equal to 4 - 6years of rent. This is quite unique to our market, and it means that CAPEX planning and leasing need to go hand in hand with the strategy being at the forefront of the transformation with the priorities in this order:
- Time (when people work)
- Place (the office or third place)
What do you think are the key factors that will drive change in the future?
Some of the challenges that we talked about are going to change the way that we think about things. We talked about Gen Z coming into the office and they are the first generation to really stand up and say, “No, this is what I want. This is what I expect, and I am not going to accept anything less.” We must respond to that or there will not be a pipeline of future leaders in the decade to come.
Technology is also going to continue to change, and the Metaverse is absolutely going to happen. We need to be thinking about how that will affect the workplace.
Office locations will be changed to include pilot offices or spoke offices. I do believe that the 9-5 is something that would change. It is simply crazy to think that this developed because of the industrial revolution and had not been challenged until now. It does not suit the work that we do now, and it is not efficient either. Maybe if people were able to work more flexible hours, we will be more efficient, or people could commute at times that are more efficient too.
There is a strong drive, especially with the customers working now, to select products that are sustainable/build-in methods that are sustainable, and to choose New Zealand made or manufactured products wherever we can. Moreover, it is just something that we need to address because we have come to a point where we cannot ignore it any longer.
What advice would you give to medium businesses in New Zealand that are now looking at their workplace? What would you say to them? What is it important that they should think of that?
The biggest piece of advice is to not underestimate the decision you are making and how much time should be dedicated to thinking about it.
For many of our clients, we are encouraging them to start thinking about these things and doing an in-depth research piece, 2 - 3 years out. Also, do not be afraid to embrace a bold strategy. We must remember that the events that happened have brought a never seen before change to the world of work, probably as important as the industrial revolution and the office as we know is bound to radically change.
The benefits that lie in embracing fully the hybrid way of working are tremendous, across employee wellbeing and productivity, real estate cost savings, and long-term benefits to the environment. We must take advantage of the opportunity and challenge the status quo.