colliers international generation y white paper issue

8/2/2019 Colliers International Generation Y White Paper Issue

1/8WWW.COLLIERS.COM/RESEARCH | P. 1MARCH | 2012

GENERATION Y | WHITE PAPER | ISSUE 3

In the rst two reports o our Generation Y white paper series we explored what motivates

this burgeoning generation, how they work and how population trends will impact oce

space demand across Europe. In this paper we address the nal two components (2 and 4)

o what we term the Oce Market Demand Algorithm:

1. Working Population: How Many?

2. Alternative Workplace Strategies (AWS): Where?

3. Changing working styles/needs: How?

4. Space Planning Solutions.

It is the combination o all these actors that will determine both how much oce space weneed in uture and the type o space required.

ISSUE 3

Generation YSPACE PLANNING AND THE FUTURE OF WORKPLACE DESIGN

COLLIERS INTERNATIONAL | WHITE PAPER

IN THIS ISSUE

> The demand or Alternative

Workplace Strategies

> Enabling a mobile workorce

> The impact o technologyand working needs on

workplace design

> Conclusion: Implications or

oce demand

WORKING POPULATION -

HOW MANY?

WHERE WILL THEY

WORK?

HOW WILL THEY WORK

IN THE OFFICE?

SPACE PLANNING?

OFFICE DEMAND - HOW

MUCH AND WHAT TYPE?

OFFICE MARKET ALGORITHM




THE DEMAND FOR ALTERNATIVE WORKPLACE STRATEGIES

AWS is certainly nothing new, having been around since the early 1990s. It is one o manyterms coined to describe the myriad ways in which businesses have reshaped their

workplace as a result o the growth o the internet and telecommunications technology.

Notably, by enabling sta to work rom home or in alternative locations.

From a corporate perspective, space optimisation (79%) and cost savings (74%) arethe main reasons or companies to implement alternative strategies. Furthermore many

companies see lots o potential or improvement in terms o space usage eciency - only

55% o oces are utilised at a satisactory level, according to research produced by NewWays o Workings Benchmarking Study; 2010.

Employee demand is also uelling the needs or AWS. Home-based working (*89%), the

use o drop-in spaces/hoteling (*82%), non-company oces (*37%) or satellite oces(*35%) are used by an increasing number o enterprises to satisy employee demand. We

also know that employees want to be able to have a fexible workplace that can be taken

wherever they go.

This suggests that we ace a big drop in the use o traditional oce space and that

traditional oce space itsel has a requirement to be more fexible in order to

accommodate companies wherever they may go.

Whilst it is dicult to put this into numbers based on individual companies, there is an

underlying rat o actual evidence which points to the growth in mobile working.

ENABLING A MOBILE WORKFORCEAccording to the International Data Corporation (IDC), the number o mobile workers

globally exceeded one billion people in 2010 and is orecast to grow by 6% per annum overthe next years.

The mix between virtual and real

workspaces will be one o the

dening trends over the next decades

as companies explore the uture

o work. Getting people to work

eectively together will be the key

critical success actor. Productivity

o people will drive change.

Unwired Ventures Ltd, 2011

*the % fgure represents the proportion o companies

who use this alternative to a traditional oce.

2005 2007 2008 2009 2010 2011 2012 2013 2015

FIGURE 1: GLOBAL MOBILE WORKFORCE AS % OF WORKING POPULATION

14

12

10

8

6

4

2

0INTERACTION AND NETWORKING

FLEXIBILITY

PrivateOce

OpenOce

Out-o-Oce

Exclusive SharedDesk

Workromhome

Shared byDepart-ments/

Partners

HotellingDesk

Hot Desk

Coworking

Mobile working has been brought about by rapid changes and advancement in inormation

technology and as it becomes more accessible, more workers will be able to work

remotely. Key actors to enabling a mobile workorce include:

> Quick, reliable access to the Internet> The cost o inormation communication technology (ICT)> The ability to access company inormation and data outside o the oce

> Increased use o mobile devices

Source: International Data Corporation (IDC)

%




High Speed Internet Access Growing

Data trac has undergone exponential growth rom 1 TB/month in 1990 to 20 thousand

TB/month in 2010 and is orecast to reach the heady heights o 81 million TB/month in

2015 according to research conducted by Stony Brook University.

To urther advance access to broadband, the EU has created a Digital Agenda with the

goal o bringing basic broadband to all Europeans by 2013. In act, Europe (EU27)

currently has the biggest broadband market in the world with 128.3 million lines. The

average broadband (xed lines) penetration in 2010 adds up to only 25.6% o the total

market, but nonetheless underwent signicant growth over the last six years coming rom

only 4.9% coverage in 2004. This development is accompanied by mobile internet usage

which has tripled over the last three years in Europe and was itsel responsible or 6.1% ototal broadband usage in 2010.

ICT Prices Continue to Drop

In two years, ICT service prices have allen by 19% and broadband prices dropped by

about 52%. Thanks to strong governmental support, especially in Europe, prices are

orecast to all urther, making access even easier and more cost eective.

The arrival o Cloud Computing has enabled enterprises to store their inormation in data

centres outside o the actual oces. It is a major driver behind the eectiveness o the

likes o Apple and Amazon the worlds two major ront-runners in the growth market o

mobile working, playing and retailing through the use o tablet technology.

Source: Stony Brook University;

The Impact o High-Speed Internet Access, 2010

Source: ITU; Measuring the Inormation Society; 2011

ICT Total

1990 1995 2000 2015

Fixed-telephone Mobile-phones Fixed-broadband

FIGURE 2: GLOBAL ICT PRICES (% MONTHLY GNI/CAPITA)

180

160

140

120

100

80

60

40

20

0

2008 Total 2010

-21.8%

-6.8%

-18.3%

-52.2%

INTERNET TRAFFIC (TB/MONTH)

100,000,000

1,000,000

10,000

100

1




Despite security concerns over the saety o data, cloud computing is anticipated to growsignicantly allowing or reduced operational costs via improved data management, less

on-site (i.e. within an oce) server maintenance and a higher energy eciency o the

actual oce, let alone more oce space and a more pleasant environment. As a part o

the previously mentioned EU Digital Agenda, it is believed that such data storage

solutions will lead to a reduction o IT department costs by 70%. Equally it will drive the

demand or bespoke data centers across Europe.

The other clear advantage is that it will allow employees to access data and les rom out

o the oce. Not only does this support the work preerence o the new generations in the

workorce but allows or reducing and/or restructuring the oce space ootprint.

Wired vs. Unwired?

A closer look at the share o wireless and xed-wired devices shows that in our years

data trac rom wireless devices will surpass trac rom xed-wired devices by 11%.

Surveys undertaken in the US (in 2010) show that 84% o Generation Y use wireless

internet, ollowed by 69% o Generation X and at least 49% o Generation Baby Boomers

now see a benet in this convenient way to sur the world wide web. Furthermore

Generation Y is the rst Generation that owns more laptops (70%) than desktop PCs

(57%) and moreover they posses both - on top o that they carry cell phones (95%). As

technology advances we are likely to see more and more use o tablets and smaller

handheld devices or working, in addition to laptops, increasing the possibility o remoteworking.

As younger generations are almost constantly online and everywhere using a myriad o

gadgets, they obliterate the borders between private and working lie, creating the need

or AWS.

MOBILE WORKING ON THE GO

Oce specialists are growing

to provide innovative, mobile

working solutions. Regus has

invested in building remote

working oce space in and

around transport nodes. In

November 2011 Regus agreed

a deal with the French state

owned rail company SNCF to

install drop-in business centers

across its 3,000 train station

network as it seeks to cater or

the growing trend towards mobile

working. Business centers will

initially open in Paris Nord, Le

Mans, Bordeaux, Nancy, Amiens

and Lille and Flanders with

plans to extend the program to

other stations later. Regus is

also reported to be in discussionwith other rail network operators

across Europe.

Even on public transport

mediums, notably trains,

companies such as Nomad

are engaging train operators

to provide wireless technology

during the journey.

Baby Boomers Generation X Generation Y

FIGURE 3: PROPORTION OF US GENERATIONS USING WIRELESS INTERNET

100%

80%

60%

40%

20%

0%

Source: Pew Research Centers Internet & American Lie Project




As the ways in which we work has

changed, so too has oce design and space

planning. Whilst we continue to shit toward

a more network driven way o working, we

also shit to the need or more fexible,

collaborative space. However, the needs

between dierent companies, their

branches and departments can vary a lot so

it is hard to generalise the needs and design

solutions or all oces. Nevertheless there

are noticeable changes to space planningtechniques i we look at the changing

designs o oce space since the early

1990s, courtesy o Arcadis.

Figure 4 shows the sort o oce layout still

avoured by large Law rms and is typical

o the 1980s and early 1990s with heavy

use o perimeter cellular oce space with

some open plan desking.

This type o layout where the cellular oces

occupy all the natural light rom thewindows is not regularly used today.

The above example, typical o early 2000s, shows an almost

completely open plan oce foor with small one-to-one rooms

or quiet phone calls and meeting spaces allocated to the

central core o the building.

This example is typical o the 1980s and early 1990s with

heavy use o perimeter cellular oce space.

THE IMPACT OF TECHNOLOGY AND WORKING NEEDS ON WORKPLACE DESIGN

Source: ArcadisSource: Arcadis

In the early noughties, maximizing

the quantity o sta in an oce area

was important or companies to

keep costs down. This view was not

normally shared by the employees

who occupied it.

FIGURE 4: CELLULAR OFFICES - 1980S AND EARLY 1990S FIGURE 5: EARLY 2000

A more modern approach to a heavily

cellular space which also supports some

open plan desking would put oces and

meeting rooms in toward the centre o the

building allowing most o the natural light to

food through the open plan space around

the perimeter, as shown in Figure 5.

Moving through the late 1990s and early

noughties, this oce design begins to adapt

a more open plan environment or sta.Partly driven by the requirement to t more

desking into oces and to encourage

knowledge sharing and interaction between

employees.

When fat-screen technology was

introduced desk design changed again to

more traditional, smaller branch-style open

plan environments allowing maximum

workstations within a given space.




The modern approach is to provide more collaborative working areas where sta can

easily come together inormally to discuss business. More un areas have also been

introduced where sta can meet, chat and take a break rom the daily routine. In addition,

private, quiet areas have been incorporated where employees can make private phone

calls and work undisturbed. Equally, and just as importantly, more space has been

provided or all employees both at their desk area and in the oce space generally.

This change toward more open, fexible and collaborative space is driven by the demand

and need or social interaction and group working within an oce. Companies that satisy

these needs the best are typically better perorming businesses. Johnson Controls launched

a research project amongst their Generation Y sta to see how they could be made to eel

happier and more productive through workplace innovations. Overall there was a preerence

or oces that support collaborating, provide common areas and a decent degree o thelatest IT. Though they do like fexibility and open places, 70% o Gen Y sta would rather

have their own desk than sharing or having to book a new desk every day. It was also clear

that Gen Y sta wanted more private desk-space comprising at least 12 m2.

Collectively the emphasis has been on enabling and encouraging employees to enjoy the

oce space more. Combined with policies which support fexible oce hours and permit

sta to work remotely, employees eel more valued as individuals.

F 6 0

F 6 0

F 6 0

T30 F 6 0

F 6 0

F 6 0

F 6 0

F 6 0

T30 F 6 0

F 6 0

F 6 0

F 6 0

30

1.0

5

465 4.12 69

4.12 69

11

59 4.12 69

59 4.12 6932 3.42 71

225 32 3.42 71

F L P

F 6 0

MECHANISCH

GITTERWAND

MECHANISCH

630 KGLIFT1

1'250 KGLIFT2

GITTERWAND

2'000 KG630 KGLIFT3 LIFT4

1'250 KGLIFT5

TRH4B F: 1 6. 6 m 2

R H: 3 .2 10 m

2/43+7.525

+7.475B:

W:D:

KERAMIKPLATTEN

WEISSPUTZBETONGESTRICHEN

16 PersonMeetingRoom

48 sqm

8 Person

MeetingRoom17sqm


19 sqm


48 sqm

OpenPlanOffice

436 sqm

ServerRoom18 sqm


48 sqm

Office13sqm

Office14sqm

Office

14sqm

Office

14sqm

Office14sqm

Office13sqm

Office

14sqm

Office14sqm

Office13sqm

Office17sqm

OpenPlanOffice

455sqm

OpenPlanOffice324sqm

Office13sqm

Office

13sqm

Office14sqm

Office13sqm

Office14sqm

Office

14sqm

OpenPlanOffice324sqm

Reception

BoardroomSuite

Office

14sqm

Office

14sqm

Office14sqm

Office

14sqm

FIGURE 6: OFFICE SPACE OF TODAY/FUTURE

The above example shows the most modern approach to

oce design showing large areas o open plan mixed with

collaborative areas to encourage knowledge sharing and

providing more generous spaces or all employees.

Source: Arcadis

The above photos are o Colliers International workspaces.




Space per person currently ranges

rom 12-15 m2, up rom 8-10 m2 in

the late 1990s and early 2000s.

CONCLUSION: IMPLICATIONS FOR OFFICE DEMAND

There are clear, growing trends which will impact oce space demand across Europe in

the uture.

Remote Working:

> The growing trend toward remote working will erode the demand or desk-space within

a traditional oce environment. Whilst hot-desking/hoteling will absorb some o the

growth in remote working within the traditional oce (remote workers wont spend

every day o the week at home), the major recipients o this new demand will be the

home-oce and the increased use o satellite or non-company oces.

Space Planning:

> The growing need or fexible, collaborative space and more generous personal desk-

space will actually increase the demand or traditional oce space, per person. I

companies move rom 8-9 m2 per person toward 12m2 per person in response to

employee and corporate demand, this equates to a 25-33% increase in the volume o

space required per person.

> Equally, it will help drive demand or bespoke data centres as IT storage and

management is increasingly outsourced. The reduced requirement or oce-based

servers and IT equipment within will release some space or other orms o use.

Overall implications or oce demand

When considered in relation to the other major driver o oce space demand working

population growth we can gain some understanding o whether the combination o these

actors will lead to a decline or increase in the demand or oce space.

To start, let us make some assumptions clear in this analysis. The analysis assumes that

as o 2012 the amount o space provided per person is 9m 2, or an oce comprising 200

sta. This equates to an oce environment o 1,800 m2. So, i we look ahead to 2030,

what is the likely scenario, using the table opposite as a basis or calculation.

Put simply, even though the main oce-based population is set to shrink by almost 25%,

the increase in the amount o space per person will mitigate against this erosion in oce

space demand.

Overall the message is that we do not necessarily believe there will be a signicant change

(all) in the amount o space required or traditional oce use, despite a all in oce-based

employment.

There will, however, be a great deal o change in how oce space is used and congured.

Given the eect on the bottom line o reducing rental outgoings, there will be increasing

pressure to utilise technology and other fexible oce solutions to cut the regular rent

demand whilst keeping core sta happy, motivated, productive and wanting to come to

work. Amidst ever more competitive labour markets, having the right workplace strategy

will be key to a companys uture success.

For developers and landlords, having the right type o space which can accommodate

changing layouts and needs and provide the sustainable building solutions which occupiers

and investors are now demanding will be paramount to the success o an oce portolio.

Traditional MainOce Use

Oce-basedEmployment

Amount oSpaceNeeded

2012 200 1,800 m2

Working populationdeclines - 10%

180 1,620 m2

Remote workingerosion - 15%

153 1,377 m2

Space PlanningIncrease to 12 m2

153 1,836 m2

2030 -23.5% +2%




532 oces in62 countries on6 continentsUnited States: 147Canada: 44Latin America: 19Asia Pacic: 204EMEA: 118

1.3 billion in annual revenue116 million square meters under management

12,300 professionals

COLLIERS INTERNATIONAL

EMEA HEADQUARTERS

9 Marylebone LaneLondon W1U 1HL

United Kingdom

TEL +44 20 7935 4499

EMAIL [email protected]

The inormation contained herein has been obtained rom

sources deemed reliable. While every reasonable eort has

been made to ensure its accuracy, we cannot guarantee it.

No responsibility is assumed or any inaccuracies. Readers

are encouraged to consult their proessional advisors prior to

acting on any o the material contained in this report.

This publication is the copyrighted property o Colliers

International and/or its licensor(s). 2012. All rights

reserved.

Damian Harrington, MRICS; MScRegional Director - Research & ConsultingCEE Investment ServicesEastern Europe

TEL +420 226 537 624

FAX +420 603 142 964

EMAIL [email protected]

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