How might the role of FMs change as the focus on occupant well-being increasingly impacts offices?

by Brianna Crandall — August 7, 2017 — Developers and landlords who invest to create offices that embody the focus on occupant well-being will reap their rewards commercially, while those who don’t will face diminishing returns, according to a new report from global real estate services firm Cushman & Wakefield (C&W).

Cover of Well Workplace report

The report maps out the major trends, opportunities and challenges facing owners and occupiers of commercial office space due to the growing emphasis on employee health and vitality.

The Well Workplace report maps out the major trends, opportunities and challenges of the future facing owners and occupiers of commercial office space due to the growing emphasis on employee health and vitality as part of the work environment.

Improved lighting, layout and use of plants are all known to benefit well-being and can increase employee performance. Gains through boosting performance far outweigh potential cost savings through real estate efficiencies — making the imperative for occupiers clear.

Equally, for landlords there is commercial advantage and price premium for assets that incorporate occupant well-being. A survey from the Urban Land Institute revealed that two-thirds of built environment professionals agree well-being features in a property can directly impact market success and economic value. Additionally, more than a quarter of landlords believe they can charge a premium rent as a result of well-being features, according to a study by Dodge Data & Analytics. The same data shows that nearly half of respondents said spaces leased more quickly.

Report author Sophy Moffat, from Cushman & Wakefield’s EMEA Research and Insight team, remarked:

The rise of well-being in the commercial real estate industry is not a fad but a long-overdue acceptance that people are the largest cost and biggest contributor to the success of companies. The call to action for the real estate industry, and broader built environment, is loud and clear: the design and building of workplaces must change to meet a flexible future.

Standout examples where well-being is already being fully incorporated into buildings, such as the Edge in Amsterdam, are rare. This disconnect between the benefits of a healthy and engaged workforce and office environments which impact well-being in negative ways cannot continue. As technology’s rapid advance has impacted the type of jobs people are doing, and the workspaces they require, well-being has emerged as a critical issue for the industry because it is simply too fundamental to be ignored.

Evidence points to the return on investment available to investors and tenants from differentiation, value creation and risk management. We must now encourage the concept of a broader perspective focused on the total value of the investment and where a workplace culture of work-health balance is the norm.

James Young, Cushman & Wakefield’s chair of EMEA Offices, added:

The competition to hire and retain the best people — with companies across all sectors often chasing the same talent — and the known benefits from increased workforce productivity has seen large tech companies at the forefront of workplace developments. We believe the trickle-down effect across the wider industry will become a flood due to a number of factors, chief among them the benefits for the bottom line.

The report makes three key predictions for how a focus on occupant well-being will impact the property industry in the future:

1) Wellness officers will proliferate. Human resources (HR) and facilities management (FM) roles, often operating in corporately imposed silos, will be superseded by community managers using analytical tools, smart technologies and business metrics to customize the physical environment to its inhabitants. The office as “one-space-for-one-organization” will be replaced by permeable workplaces with multiple, overlapping communities and a shared level of trust. These workplaces will command a price premium for their functionality and contribution to both occupant well-being and business performance.

2) Well-being will be critical to attract the highest-quality tenants. Occupant well-being will play a key role in leasing decisions, especially for businesses in the knowledge sector. As technology advances, the essentially human parts of work will become more important, and gig employees, or swarms, will replace full-time employees as the main source of talent. Traditional careers will be replaced by portfolios of experience, and employees will choose where and how they want to work. Well, smart offices will therefore become a top priority for top talent, and the “well” factor will be imperative to the leasing decisions of leading corporations.

3) Well-being metrics will be transformed by technology. Office developers will need to know their consumers better than ever before, and space will be developed through early and deep collaboration with occupants. Over the next decade, expect to see workplace wellness programs predicting sick leave to manage gaps in resourcing, as well as future employee healthcare costs. Also expect analysis of employee health and its attribution to the physical space. Traditional metrics will need to adapt to incorporate advanced insights into patterns of data. Of course, while having individual health data in real time is empowering, it also sparks concerns about privacy. If companies have technology to monitor employees’ biometric data and personal health information there are serious, mounting data breaches. In the end, it will be about value exchange — how much employees will be willing to give up to work in better places.

An 11-page summary of Cushman & Wakefield’s Well Workplace: Making Spaces Human Again report are available to view or download from the firm’s site at no cost, and the complete report is available upon brief registration.