Remote working
In the height of the pandemic during Q2 of 2020, the majority of businesses and professionals were forced to leave the comfort of their offices and attempt to create the same environment from their homes, with little or no notice to prepare for such event. Overnight, the working pattern shifted from leaving home in the morning, commuting to work, conversing with colleagues, and collaborative team working, in a familiar fit for purpose environment, to largely working remotely. As countries began to overcome the pandemic and were able to implement safety measures in offices, but people quickly got used to collaborating digitally online. AECOM explores whether professionals were keen to return to the office or happy to continue with the new normal routine.
Returning to the office
It is a question that we, as people managers and business owners, are not yet able to answer, whatever the consensus is in terms of impact to operations and the ability to meet month end bottom line plans. The impact will likely depend on how long the situation takes to be back to normal, and when it is so, what new practices we will maintain, what lessons we have learned throughout this period and what are the guidelines that businesses will set to regulate the working from home approach within their organizations.
Ultimately the question is, will businesses be pushing for their professionals to return to their offices or happy for them to continue working from home? What will employees’ preferences be, having experienced the working from home environment?
Clients and employees needs
Here at AECOM, we have adopted new technology platforms and digital initiatives to enable remote working; whether this be from home, from client offices, from co-sharing spaces or from project construction sites. The aim is to be one step ahead, monitoring new working trends and ensuring employees are connected and able to utilise internal business software and information from wherever the ‘office’ is. The interactive digital platforms have been key for the successful delivery of ongoing services and key presentations to our clients and stakeholders during the remote working period. Due to the agility of our business environment and the enabling factors provided by AECOM, our day to day activities continued, and remote working has been, and still continues to be, largely a success during the pandemic.
Having said this, we are yet to have our internal performance indicators measured in comparison to pre-pandemic levels, in order to help us assess quantitatively the direct impact of working from home on our results and performance in general. From our preliminary gathered data, we were able to conclude that our pre-pandemic targets were met, and that we were successful in maintaining close contact with our clients to ensure that services were not interrupted. Indeed, during this time maintaining the close relationships with our clients helped us also expand our revenue streams through securing variations to existing contracts as well as the award of new contracts. This would likely not have happened without a quick adoption of the new working practices, an increased level of awareness by our staff members on the importance of diligently and professionally attending to business needs, and the importance of increased communications across all team members.
As we continue to navigate through this phase and out of the pandemic, it will be important that businesses generate a pandemic direct impact assessment that can somehow help shape the future of our work environment considering the new trends introduced. Coupled with the assessment of our employee needs and health conditions, this impact assessment will enable us to better advise our clients as to how we intend to perform our services without jeopardizing quality and programme. This is something AECOM is seriously analysing when considering the future of our working environment, and ultimately the shape of our offices of the future.
The current situation has also further raised the issue of people’s wellbeing and wellness, not only within the spaces we occupy and the communities we live in, but also in cities as a whole. The quest for the office of the future is not isolated from city-wide wellness and wellbeing strategies. Studies are now being prioritised in various cities and regions around the Middle East, in an attempt to enhance the quality of life offered to its citizens through the development and implementation of new urban planning policies, guiding the development of a more sustainable future.
Coming back to the direct impact to our office and living environment, it is clear to all office space occupants and facility managers that returning to the office should be met with an increased focus on the wellbeing of employees. This increased focus on wellbeing will require us to rethink the physical office environment and the infrastructure associated (digital and hard), in order to ensure that the office space does not become obsolete as digital meetings over video conference become a frequent and more common occurrence. For most of us, digital meetings were the only face to face interaction we had whilst working remotely. The remote working was not without issues, especially amongst younger or lower pay scale employees, challenged with navigating peace and quiet in heavily shared accommodation to complete work tasks, whilst those with children had to create an isolated area within a living environment to be able to work, communicate and deliver. Accordingly, working from home required people to adapt living environments to consider a new purpose. The physical office not only negates the issues surrounding the feeling of disconnect when working remotely, but also provides a professional work environment for those who do not have an ideal equivalent at home.
These considerations will in future be of critical importance when attempting to measure our readiness to implement long term flexible working habits. By implementing new safety measures across our offices globally, by making our office spaces and work practices more digitally connected, by providing flexible co-creation spaces and by offering flexibility to work from a home that has the necessary spatial and physical infrastructure. We can perhaps aspire that business habits will return to a near pre-pandemic state whilst including the benefits that have emerged as a result of adapting to working during the pandemic.
Office infrastructure opportunities
If we look at office space density, we expect that less dense offices will now be more appealing in the future, including anticipating that previously applied minimum standards for staff per sqm of office space will be adjusted to ensure sufficient social distancing within the working environment. Social distancing, while an immediate response to the pandemic, will likely become best practise and a necessity which will be monitored by local authorities to ensure compliance and reduced health and safety risks.
In achieving this, offices may replace individual desks and introduce more collaboration and physical or digital meeting spaces, to increase efficiency in the workplace. Additionally, offices will require to be further auto-connected digitally across workspaces and regions, with means of communication and technologies associated with it should be flawless. Collaboration spaces will become more dominant in office environments, yet working will be more flexible and manageable remotely and locally through digital tools. Digital tools will be adapted at an individual level and connected to the office space. The office space will be accessible virtually by a portion of the employees, in order to manage space and crowd density, hygiene, social distancing verifications and air quality, to name a few considerations.
One of the important changes that we foresee in the future will be in elevating the role of outlook calendars into a digital Personal Assistant (PA) role. Through Artificial Intelligence (AI), outlook calendars will provide direction and support in our day to day activities when it comes to collaboration between employees. The AI calendar will be able to help with the process of collaborating, whether virtually or physically, ensuring workflows are followed and completed prior to any meeting, as well as supporting in coordinating our collaborative activities. For example, an employee enters a new meeting into her AI calendar and invites three of her colleagues, she clicks on the button labelled as ‘Collaboration’ which automatically triggers the booking of a collaboration space, whether physical location or digital, and where physical the required digital tools and adequate size of space based on the number of attending people are arranged. Additionally, the AI has the capability to generate notes and minutes of such meetings based on minimal data entry and through voice recognition.
In addition to AI Calendars, automatic sanitization of air and surfaces through light and natural air ventilation will become features of our offices of the future, which could impact the traditional design of closed glass façade, windowless tall towers. These towers became features of modernity, yet enclosed bubbles of largely recirculated and potentially polluted air will start facing new standard guideline requirements applied by municipalities, ensuring that the wellness of staff occupying these spaces is a priority. As a potential significant knock-on effect, this ultimately will reduce the overall cost of healthcare on governments, in turn reducing the investment in healthcare physical infrastructure, whilst allowing for more potential research and development budgets to be allocated. These new guidelines and building typologies may have direct and indirect impact on our cities growth in general and our city centers urban fabric and densities more specifically.
The impact on our cities will also be felt through the potential decrease in demand for office space in general and large office spaces specifically. Some interdependent industries and companies will focus on sharing spaces, which will come with stringent health and safety standards. Industrial zones in Europe and the USA were transformed over time to office spaces and it is forecast that the same will evolve again into new sharing workplace environments. Warehouses will thrive as ideal flexible spaces for businesses to co-share. This is an existing trend, which the pandemic and its impact on our work practices is likely to reinforce. We would therefore expect to see a potential general departure of business from office buildings into more flexible co-sharing spaces, with these being more cost effective and fit for purpose in the new working environment.
In another dimension, city policy makers will likely be forced to regulate income generated from residential zoned areas. Per previous practises, planning authorities categorized residential land use as non-income generating land. Meanwhile all businesses were required to obtain licenses, with a prerequisite of office space and an address to be supplied by those businesses before being provided a tax reference number. Generating income from home may have been accepted during the coronavirus restrictions, however, when restrictions are removed, regulatory authorities will be looking at potential ways and means to regulate income generation from home. We may see two solutions for this issue:
- a new category of land use that allows the commercial use of residential space; and/or
- regulating income from residential land uses through a tax (or similar), of some nature, that helps cover the increased cost on infrastructure and reduced use of commercial zones infrastructure.
In addition to the use of our homes as working spaces, hotel lobbies, their business facilities or even unoccupied serviced hotel demand is on the rise as office space during working hours. These places offer potential for a collaborative serviced environment with appealing decoration, carefully lit places and on demand catering. In addition to these hotel spaces; coffee shops and fitness centers have also embarked on an effort to provide or increase the space allocated to coworking, with no extra cost to their end users. Their intent is to increase their number of users by offering more than what they typically provide, in order to help offset the losses incurred from the decreased number of tourists and leisure seekers.
Hotel chains, such as the W hotel in Dubai, have adopted the ‘Alive’ hotel lobbies approach, calling them ‘The Living Room’. The concept has become widespread, including brands building smaller functional boutique hotels spread across the city, with consideration to local population catchment rather than just proximity to the usual visitors or tourist attraction, furnishing their spaces with modern furniture and artwork to transform them into comfortable and inspiring spaces to work. We are possibly moving to a trend where these same hotels will be transforming such spaces into serviced ‘work and play’ types of environments, with all required soft, hard and digital infrastructure; as well as the collaboration or sound isolation rooms for smaller individual teleconferences or meetings, making them the next generation of high tech hubs.
Central Business Districts
Central Business Districts (CBD’s), represent the beating heart of a city. They have always been the commercial, retail, and cultural center of cities and usually are the center point for transportation networks. The CBD is a place where synergy between the public and private sectors happen. They create a symbol of the strength of a city, contributing to its brand and identity and helping define its core economic drivers. The new working trends presented here will impact our CBD’s. The impact of making the physical office more obsolete, the decrease in demand for office space, the shift of population outside cities to larger and cheaper homes, could have significant effects on cities globally and economies already in recession caused by coronavirus. These cities will struggle to recover without their CBD’s, meaning their existence is paramount for cities economies now more than ever, and their future purpose and development should be considered and encouraged now more than ever. Without doubt, we will again see the pre-pandemic levels of buzz of activity in the likes of Canary Wharf in London, Manhattan in New York, Marunouchi in Tokyo and DIFC in Dubai, as they provide the hub and ecosystem that allows people, communities and businesses to strive and flourish.
On a broader note, it may be key for populations to monitor and pursue a shift from the way trends are moving, where it will be interesting to witness the evolution of technology and whether this potentially leads to future generations working largely in isolation from home, connecting only digitally, playing with friends remotely, having virtual gatherings and parties, no longer going to restaurants and instead having chefs come over to their homes, shopping online and no longer interacting and occupy high streets and retail centers. These practices are critical for our communities and our cities, and it will be imperative that we implement policies that help reverse the evolution to maintain the human factor that helps cities thrive.
CBD trends
The future objective is to maintain business operations across the Middle East, with an aim to improving remote working possibilities whilst maintaining thriving CBDs. As organizations return to the physical office, they will seek new working opportunities.
The Middle East, and specifically the United Arab Emirates, remains commercially appealing for international business operations. The UAE itself is a regional and central hub for businesses within the MENA region and wider afield, benefitting from the UAE’s logistic and transport location and trade through its ports and international airports.
By 2020 year end the total supply of commercial office space in Dubai alone will be 10.56 million m2 (Knight Frank). This is expected to grow by a further 110,000 m2 to 10.67 million m2 by 2022, however, current estimates are that 21 per cent of supply sits vacant, an issue that will need to be addressed.
At the later part of 2020, Air France KLM announced that it had relocated to a more ‘flexible and relaxed’ office setting within the Dubai Airport Freezone, benefitting from adapted office settings as a result of the pandemic. This is likely to be one of the first of many prospective relocations, as businesses look to consolidate multiple offices and optimise workspace, driven by workforces splitting their time between office based and remote working rotations.
Allsopp&Allsopp (UAE) reported an increase in real estate activity since the Q2 2020 lockdown, as new commercial properties entered the market and there was a rise in buyer registration. They believe this is due to business restructures and new business start-ups. For these reasons commercial market prices remained robust throughout the year, only reporting a slight decline in rental price.
In Dubai, commercial hotspots like Business Bay, a contemporary financial district, afford rental prices of between AED 60 – AED 100 per sqft. Likewise, Dubai’s International Financial Center (DIFC) has maintained rental levels of between AED 150 – AED 350 per sqft. The Downtown area of Dubai has seen a marginal decline with rental prices reducing to an average AED 130 per sqft from 2019 levels of AED 150 per sqft. This has also motivated rental traffic, with businesses upgrading to more advantageous prime real estate locations and adapting new office structures.
Future message
During Q3 and Q4 of 2020, operations generally returned to the physical office setting whilst maintaining a degree of remote working, adopting new health and safety practices in offices and utilising technology opportunities. Businesses will likely continue to embrace digital, handsfree or ‘smart’ technologies, ensuring offices continue to develop with up-to-the-minute trends and technologies.
New office sign-in procedures are proving a success, boosting employee (and visitor) health and wellbeing through health declarations via QR code and touchless lift buttons, with this seen as an example of just the beginning of anticipated improvements. Face-to-face meetings and hours within the working day normally taken up by commute journeys are replaced with efficient virtual meetings, which are even taking place from within the physical office.
Landlords and businesses may have to play catch up, implementing fast-pace developments established during and from lessons learned in 2020, inspiring ‘cleaner’ office spaces and replacing current outdated heating, ventilation and air conditioning systems which go hand-in-hand with improving employee’s wellbeing. The future is the office and working practices which will be cleaner and more efficient, embracing technological changes and adapting new collaboration workspaces, filling the void which was created during the 2020 lockdown.
These adaptions will ensure employees can work safely from the latest modified office space, new working environments or their homes, whilst maintaining a sense of community within organizations and supporting thriving central business districts; these continuing to be the heartbeat of our cities. If these future developments are managed well, commercial space will not become obsolete, with exciting opportunities within the Middle East for future offices, and the potential for a more efficient and safe working environment and practice to those of pre-pandemic levels.