Having an office that is both an inspiring and enjoyable place to work is now a critical, cost-effective way to successfully attract the world’s most talented employees, according to Knight Frank which today issued Global Cities : The 2016 Report.
The report highlights a shift in thinking and demonstrates why our future offices must break the mould of the past two decades. If organisations want to attract the best and keep their workforce, they need to create spaces that their staff will want to work in.
Losing staff is expensive
Office relocations are very much back on the corporate agenda as firms are increasingly using their offices as a means of controlling a far bigger business expense, namely, staff attrition.
It has been estimated that for specialist or executive staff, the cost to a business of losing them is the equivalent of 150 per cent of salary.
For a typical office worker in London the total cost of their work space, in rent, local taxes, and service charge, is equivalent to £10,440 per annum. The median salary in London is £35,179 so based on the 150 per cent figure, their replacement cost is £52,574, or 5 times the cost of a work station.
Space equality worldwide
Global Cities : The 2016 Report also highlights that while office space remains at a premium worldwide, some cities are more equal than others. The report looks at the ratio of office space allocated to a boss when compared to their support staff. In Sydney, both the boss and the PA are given equal billing when it comes to square footage. London and Shanghai both see bosses receive almost twice as much space as their team with a ratio of 1.9 : 1 In contrast in Hong Kong the boss is given a whopping four times as much space as members of the support team.
|Ratio of space (sq. ft.) allocated to a senior executive in an advertising agency compared to a secretary|
|City||Boss : Secretary ratio|
|1||Hong Kong||4.00 : 1|
|2||Washington DC||3.67 : 1|
|3||Mumbai||3.00 : 1|
|4||Bengaluru||2.40 : 1|
|5||San Francisco||2.25 : 1|
|=6||Delhi||2.00 : 1|
|=6||Frankfurt||2.00 : 1|
|=8||London||1.88 : 1|
|=8||Shanghai||1.88 : 1|
|=8||Mexico City||1.88 : 1|
|=8||Melbourne||1.88 : 1|
|=12||Madrid||1.56 : 1|
|=12||New York City||1.50 : 1|
|=12||Chicago||1.50 : 1|
|=12||Los Angeles||1.50 : 1|
|=12||Paris||1.50 : 1|
|=12||Dublin||1.50 : 1|
|18||Sao Paulo||1.43 : 1|
|19||Beijing||1.40 : 1|
|20||Sydney||1.00 : 1|
|Source: Knight Frank, Newmark Grubb Knight Frank|
Employees expect more than just a place to work
The newest generation of workers expect their office to be an inspiring and enjoyable place to work. Historically the preserve of technology and media firms, this new office combines collaborative spaces with individual work areas, as well as providing amenities that encourage people to think of work as an extension of home. Sydney is leading the way with just under a third (28 per cent) of all offices already offering activity-based working (ABW) for employees, where the workspace is specifically designed to suit the whole range of activities which will be accommodated.
The pace of change
The report highlights the challenge facing cities, particularly in Europe where historic buildings don’t easily lend themselves to the new contemporary layouts. While the appetite for new-style office space exists, change will only happen as and when leases expire. Will companies be able to keep pace with the newest employee expectations?
Andy Bugg, Head of Workplace Consultancy at Knight Frank, commented:
“We are seeing firms take a longer-term view on investment in their office space in order to meet the expectations of the newest generation of employees. More and more the perception of the office as a business expense is shifting as firms see the value in leveraging office space as a tool to inspire and energise their staff.
“When losing staff is so much more expensive than renting office space, it is little wonder that more firms would rather invest a little more in a high-quality, well-located office that keeps employees happy at work.”