Market Talk: Flexible Working, Digital Support a Must in High Value-added Industries

Office Market

In a recent episode of “The way we work”, a TED Talk video series where thinkers offer practical wisdom and insight into how we can adapt and thrive amid changing workplace conventions, Matt Mullenweg, the CEO of Automattic, talks about why working from home is good for business.

The company has over 800 employees spread across the United States and the globe. Some of them choose not even to have a home base; they are nomads traveling through Airbnbs, they are in new places every day, week or month. Others work from home, from co-working offices or cafés. They even get a co-working stipend that they can put towards a co-working space or just to buy coffee, so they don’t get kicked out of the coffee shop.

All of this is not by chance; the company purposefully chooses to give people the freedom to create their own workspace. Automattic, the company behind, Jetpack and WooasCommerce, pointedly does not refer to a remote workforce, as that word sets up the expectation that some people are essential, while others are not. It prefers the term “distributed workforce”, which suggests that everyone is on an equal playing field, Mullenweg says.  

People do meet in person: they gather every year for a short burst of time contrary to normal offices where people are together for the most part. The CEO mentions a number of other positives to this form of employment, but the main takeaway is that giving people the flexibility to make their own work environment will result in better performance.  

Sensible as that may sound, apart from a handful of companies, most still require people to show up almost every day. On a brighter note, they are doing a lot more than years ago to make them feel at home. Literally. Offices today are starting to look more like a living room than a working space, says Diána Sebestyén, business development manager at Swedish office furniture supplier Kinnarps. Comfy couches, upholstered armchairs, fluffy rugs, vibrant and colorful wallpapers; all give the impression of a stylish home.  

“Offices are beginning to move away from rigid business environments,” Réka Varjú, head of office furniture department at Basic Collection, a supplier of contract furniture, told the Budapest Business Journal. The company has a strong presence in the HoReCa segment (it has a wide selection of soft seating, upholstered and colorful pieces of furniture) but it is also a significant player in the office market abroad.  

It furnished several Mindspace co-working offices across Europe including Frankfurt, Munich, Berlin, and Amsterdam. That experience and the booming office market was the logic behind Basic Collection deciding to move into the office field in Hungary as well.  

Réka Varjú

Less Crowded, More Comfortable

Contrary to previous practices where companies prioritized maximizing the use of space, trying to seat as many people in a room as possible, they are now making an effort to make it more comfortable. This also means that the trinity of table-chair-storage unit is “accessorized” with, say, leather sofas, green walls, or, if the client wants it, swings, Varjú says.

Style gets more emphasis too: from old-school to minimalist to colors applied in a way that also reflects the company’s philosophy, as offices are now a tool of employer branding as well. In a job market turned into a seller’s market, this is more important than ever. Highly-skilled workforce in particular can now afford to pick between offers and their decision is not based solely on the money.  

In fact, a good salary alone won’t make the cut. Employers that can’t offer an attractive working environment will have a hard time compensating quality workforce with a higher salary, says Gábor Borbély, head of research and business development at CBRE. The office itself is a highly motivational environment and is critical to attracting and retaining workforce, he adds.   

Ever more companies are acknowledging this and have started to think of office spaces and design more lavishly. This process is, of course, supported by the economy; most players had a good year, so rationalization of office space is no longer the default norm, Borbély says.   

Multifunctional use of spaces is also becoming critical, says Varjú. For example, meetings can take place in an informal way, arranged, around a meeting point in several locations of the office, in community spaces.  

Rise of the Work Café

“The so-called ‘work café’ areas, which are homey, relaxed, but also the venue for work-related discussions, have strong team-building effect. This is the place where co-workers who do not meet on a regular basis can talk, helping informal flow of information, or where one can ‘get hold of’ a manager and ask them something rather than in their offices.”

With the way we work changing, gravitating towards a more homey look and feel makes sense. It is not “presence” but “performance” that matters, Sebestyén notes. There is more moving around, the ratio of individual and project work is shifting more towards the latter.  

“[Working in] a comfortable environment is indeed good and is definitely better than working in a white, sterile office space”, Sebestyén says. However, from an ergonomics viewpoint, office furniture is designed in a way that supports someone sitting for eight hours without compromising their health, she adds.  

Health and sustainable production are just as important as the actual function, experts agree. “Using harm-free materials, for example glues during the manufacturing process, is a basic,” agrees Sebestyén. Prospective candidates look at companies’ sustainability practices and, especially in the case of the younger generation, this could entail conscious furniture.  

The floor, too, can be a source of health problems if not done properly. “Office flooring is supposed to meet a number of strict criteria,” says Tirza Ress, marketing manager of Décor Floor Kft., a wall and floor covering supplier. “Should it not, it can be the source of several health issues.”  

Gábor Borbély

Keeping it Quiet

They also have a role in managing acoustics, still a hot topic given to the high number of open-space offices. Depending on the type of covering used, they can dampen sounds, or have noise insulation properties. With careful design, many of the issues of an open-space structure can be resolved, says Sebestyén. These include, for example, creating so-called silent zones that allows for work requiring more focus, or furniture such as phone booths, paravanes, etc.

Digitization and the use of information-sharing tools has completely changed trends in meeting area design, says Anna Horváth, a sales executive of Blue Business Interior, a supplier with clients including Skanska, SAP, Exxon and Valeo.  

“Our clients’ offices are practically paperless – as a result much less storage capacity is required. In connection with the shared desk concept, easy, quick to personalize motorized tables are gaining more ground,” she says. Chairs are also more user-friendly, but the ergonomic design is a prerequisite.  

In open offices, the importance of separated spaces that allow for focused, small-team work is also on the rise, she adds. According to the expectations of the younger generations, the spread of colorful, straight-line, convertible furniture is also in demand. The homey feeling is supported by thick rugs made of softer fabric, and many green plants are added in the spirit of biophilia.  

The essence of the office providing a physical space for work remains, but is being challenged, says Gábor Borbély, head of research and business development at CBRE. Many functions can be replaced with a smartphone or other technology-driven solutions. For example, meetings can be done in a virtual space using artificial intelligence, face and voice identification tools, so the tendency is that workflow is separating from the actual space, Borbély says.  

Traditional HQ

The traditional headquarters building will become more of a hub where the employees can benefit from the technology or other solutions that are not available at home or in a co-working space, he adds.

Since corporate structure and size keeps changing, an essential requirement from offices today is that they are able to keep up with these developments. When new developments are built, fit-out is started at a much more earlier stage, Borbély says, especially for longer leases or larger foot space.  

When it comes to existing buildings apart from a few exceptions, refitting a space to the needs of a new tenant is generally doable. This is where project management can essentially help to deliver results on budget and in time, extended by change management, that helps employees to reset to the new work environment and improves employee retention.

Not all business sectors keep track of the changes in office market trends at the same pace.

“The future is already here, it’s just not evenly distributed,” says Borbély. The IT sector, where labor shortage and the chances of losing the workforce is the highest, is overrepresented in digital workplace solutions and state-of-the-art office design. Yet what counts is not the spectacular office design of firms such as Google, but the flexibility a company can give to its employees. Flexible working and digital support is a must in high-value-added industries.

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