3 Big Shifts Driving Workplace Transformation

In the midst of a global workplace transformation, it’s not necessarily the largest organizations that will thrive or even the most technologically advanced.

It’s the most adaptable.

It’s the organizations that are ready for what Gartner calls the “continuous next”.

Those that anticipate business model changes and adjust to what Gartner EVP for research and advisory Mike Harris describes as “perpetual innovation, integration and delivery.” Here are three of the biggest shifts happening in the modern digital workplace right now and how to adapt to them.

3 Shifts Driving Workplace Transformation

Shift 1: Assigned Seats → Agile Environment

As more organizations take advantage of agile talent to broaden their talent pool, they are moving away from assigned desks in favor of an agile work environment.

That includes implementing remote work policies and encouraging flexible seating arrangements like activity-based working(ABW)

In fact, 52% of executives said they plan to implement some level of unassigned seating in their workplace, according to the most recent CBRE survey.

What this means for workplace transformation: To more accurately depict costs in an agile environment, workplace leaders need space management software that integrates with sensors to capture true space utilization.

Shift 2: On-Premise Software → Software-as-a-Service (SaaS)

For the past two decades, workplace leaders have relied largely on IWMS software to reduce expenses and streamline workplace management. These systems have traditionally been built on premise, requiring significant IT investments and extensive maintenance.

In the 2018 Verdantix Report, The Business Case for Integrated Workplace Management Systems, vendor data showed the cost of IWMS software ranges from $50,000 to $800,000 annually. For a large organization hosting workplace management software internally, the cost can be even higher over time because updates typically require a major IT overhaul. In an upgrade year, costs can exceed $1.5 million.

What this means for workplace transformation: To keep up with rapidly changing workplace technology, leaders should adopt software-as-a-service (SaaS) solutions, which are significantly less expensive to implement, manage, and maintain. Cloud-based software eliminates many of the large, upfront capital costs involved in deploying and updating it. It’s also much easier to integrate SaaS solutions with other technologies, which is essential to staying agile.

Shift 3: Managing Buildings → Managing Workplace Experiences

Traditional IWMS solutions were created for facilities professionals, not the workplace at large. That was fine when a facility leader’s role was primarily managing buildings and employees didn’t have many expectations of their workplace aside from predictability and stability.

Today’s workforce looks very different than it did even 10 years ago. Unemployment is at a 50-year low, and many organizations are experiencing talent shortages as a result.

The number of employees who voluntarily quit their jobs has increased every year for almost the past decade, nearly doubling from 22 million in 2010 to 40 million in 2018.

Alternative work arrangements are also more commonplace, with 36 percent of US employees now working on a contract basis for their primary or secondary job.

When employees can work anywhere they have an internet connection, they expect more from their workplace. And as organizations become more diverse, geographically dispersed and impacted by mergers and acquisitions, the ability to collaborate and build trust has become more imperative.

It’s also important to remember that although real estate is the second-largest expense for most organizations, it’s only about 20% of total costs. Traditional IWMS solutions leave the other 80%—employee costs—out of the equation entirely.

What this means for workplace transformation: JLL’s 3-30-300 rule states that for every square foot of space, a company will spend $3 on utilities, $30 on rent and $300 on payroll. This rule is a good way to illustrate the impact each expense category has on your company’s bottom line. While reducing real estate expenses by 10% will yield a $3 return, improving employee productivity by 10% will have a far greater return in comparison, yielding $30. Keep this rule in mind as you consider making changes to the workplace that may impact your workforce.

How Should Workplace Leaders Respond?

These three shifts demand a new way of thinking about workplace technology.

While the concept of the integrated workplace management system arose out of the desire to reduce the total cost of ownership and make life easier for workplace leaders, for many organizations, it has actually added cost and complexity. That’s because most IWMS software systems were built on premise, not built to adapt quickly.

They weren’t designed to accommodate new platforms or applications. And they were designed largely for facility management, not for the workplace experience.

As leaders look to the future, they need to be sure they have SaaS workplace solutions that easily integrate with other technology and platforms, allowing them to embrace change that is inevitable. They need technology that keeps employees connected, whether they are working across the world or under one roof. Mobile apps that help employees find the people, places and resources they need to collaborate and be productive should be a top priority.

And the best time to implement this time to implement it is right now. Because the “continuous next” is coming, whether or not you’re prepared for it.

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