The way we work is changing, and your workplace needs to change with it. But knowing what changes to make, when to make them, and how to maximize your workplace investment can be tough. That’s where workplace change management comes in.
Nick Srebrow and The Clearing’s Workplace team live the challenges of the modern workplace with our clients every day. Their approach to change management is holistic, helping you determine the right plan for your workplace, communicating it effectively, and driving engagement and adoption by staff so that your transformation is a success from day one. Here are Nick’s insights on why the right workplace change management team is as important as your architect or engineer when it comes to maximizing the ROI on your workplace transformation.
If You Build It, They May Not Come
We frequently hear – and talk – about ongoing changes in the global workplace. Whether it’s the start-and-top post-Covid return to the office, the impacts of collaborative technology, or simply a desire by many to not be tethered to a full-time office-based position, how we collectively work is changing. Downstream, the office real estate market is feeling the effect of these changes – and in many cases, it’s not pretty.
In the federal space, GAO is reporting occupancy and utilization rates at only 25% for federal headquarters buildings. Across the office market, CBRE reported a 21.2% Q4 2023 vacancy rate in Washington, D.C., with overall vacancy increasing by 70 basis points last year. Now, this lack of demand does not mean the office is going away; however, it’s also not going back to the way it was.
So, what is a savvy leader to do when it comes to planning for workspace needs or considering a renovation to their current space? To maximize that investment, start by asking the right questions and focusing on the people who will be occupying the space. That alone will likely increase your ROI, but what else should you invest in before making a workplace change investment?
The Macroeconomics of Workplace Change
When investing in workplace change, the physical space is often the top concern. But in this uncertain environment, the physical space won’t matter if it doesn’t meet the needs of your people. To that end, organizations should be more deliberate in how they think about the people. Focusing on what your people need is similar to taking out an insurance policy on a successful workplace change. Here’s why.
Key Insight 1: Turnover Kills ROI.
This excerpt from Forbes perfectly illustrates why retaining employees is critical to workplace ROI.
“Employee Benefits News reported in 2017 that turnover can cost employers 33 percent of an employee’s annual salary. The culprit? The hiring of a replacement.”
To put a dollar amount on it, if the employee earned a median salary of $45,000 a year, this would cost the company $15,000 per person — on top of the annual $45,000. Considering that a survey from Willis Tower Watson found that one in three hires will leave a company within two years, you see how quickly this can add up.
Taking it a step further, some employees won’t even take a job if the work environment doesn’t work for them. According to VergeSense, 35% of workers would turn down a job if the work environment and company culture aren’t a match for their preferences while a positive workplace experience leads to retention. With that in mind, investing in what your employees need in their work environment is one part of a smart retention strategy.
Key Insight 2: Workplace Experience Drives Productivity.
According to Hubspot, lost productivity costs U.S. businesses $1.8 trillion a year. When reading Hubspot’s study, what jumped out at me were the things workers reported as productivity killers that could be addressed through smart workplace design (and asking them what they need).
These statistics illustrate that while no one work environment meets every need or ensures 100% productivity, simply asking these questions and designing around the answers that suit the majority of employees is a great way to maximize the investment you make in your workplace. For example, if nearly half of employees communicate digitally, it’s unlikely an investment in co-working spaces will pay off. Similarly, if 65% of team members report a desire for flexibility and you implement an office-first environment, it’s likely productivity will suffer and you’ll be visited by that other killer: turnover.
Now that we’ve established the questions you should ask when considering a workplace change, along with potential drivers of workplace change ROI, how do you make sure you make the right investment – and then maximize it?
The answer is simple, factor workplace change management into your investment.
Just like you invest in the right architect and the right interior designer, investing in workplace change management at the outset will ensure you maximize your return. Why? Because expert workplace change management will ensure you focus on the most important part of the equation and what we’ve been focused on during this piece: your people.
A great workplace change management team – like The Clearing’s – will allow you hedge your bets that on day one in your new or renovated space there is minimum disruption. We will work with you to engage your employees from the outset to determine their needs, work with your architect and designers to ensure those needs are met, and do the legwork to ensure people are comfortable with the change, space, and technology so they hit the ground running. All told, a smart approach to workplace change will help you mitigate the market effects we discussed earlier and ensure your organization is set up for success.
If you are considering a workplace change and want to minimize turnover and maximize employee experience and productivity, give us a call first. We’d love to discuss your unique needs and help you develop a workplace change strategy that puts your people first and maximizes your investment. You can learn more about our approach to workplace change here, or contact us anytime you are ready to chat.