Why practical office design is outpacing beer-on-tap

Companies are prioritising practical amenities that meet modern employees needs rather than office gimmicks to attract talent

January 29, 2019

In place of perks such as game rooms and beer-on-tap, services including gyms, cafeterias, dry cleaners, health centres and multifaith rooms are among the top facilities being installed in premium office space.

“Spaces that provide a great experience, prioritise technology, promote wellbeing and diversity and create a connection with the external community are rising up the agenda as companies recognise the role real estate plays in attracting and retaining the right talent,” says Lee Daniels, Head of Workplace, JLL UK.

“Companies are doing this because it’s what their people want rather than following trends,” he says.

The work/play balance

There’s a clear link between workplace design and happy, productive staff, according to JLL research.

Striking the right balance between work and play has seen some companies strive to offer a wider range of recreation space and entertainment options. But increasingly, the offices commanding the highest rents do so through subtler tactics such as integrating cutting-edge technologies and offering people choice and variety over where and how they work, says Daniels.

“Technology is the biggest enabler for people to work more effectively,” he says. “Premium offices combine top facilities with high tech and attention to wellness details like acoustics and fresh air; it’s then that staff become more effective.”

No one-stop solution

What works in one location won’t necessarily replicate well in another, Daniels says.

“In some locations, people say services such as crèches and gyms are underutilised because employees prefer to use facilities near home,” he says. “Some companies jump the gun and select a site based on thinking all of this is necessary when it later transpires that their people don’t want that.”

Understanding what employees’ want first and then planning what the right space will be is essential. Thereafter, measuring how the space is used is as important.

“Businesses with the winning edge are able to combine top-class services with the ability to measure their impact,” says Daniels. “These companies are seeing an increase in efficiency, effectiveness and cost savings per square foot.”

The premium end of the market

Globally, the supply of premium office space is growing but top-of-the-range offices remain reserved for companies who can afford some of the world’s highest rents in cities like Hong Kong, London and New York. According to JLL’s latest Premium Office Rent Tracker (PORT) report, banking and financial services firms are driving demand, occupying more than half of high-spec space in the world’s priciest office locations.

“The most-forward thinking firms aren’t necessarily the major tech companies of Silicon Valley or trendy start-ups,” says Daniels.

“Leading financial services companies started on this journey in the early 2000’s and now sit firmly in the workplace 2.0 bucket whereby they’ve trialled and tested activity-based working and are exploring the next stage to create more efficiencies in their property portfolios using next level technology,” he says.

The legal sector, professional services, and hardware and software firms occupy a greater share of premium space in more affordable markets across Africa and Southeast Asia, JLL data show.

New premium buildings are expected to enter the market this year and set fresh rental benchmarks in some cities as the focus on services rises. But, looking ahead, the move towards high-quality practical amenities could trickle down the real estate market to lower grade space.

“Even power stations, factories and manufacturing centres recognise the need to give their employees more of the things they value,” he says.

Businesses, landlords and developers are all working to the same goals to attract the right tenants and even looking to universities for inspiration, taking cues from a digital-first generation, on the type of amenities they should offer.

“Universities, like corporates, landlords and occupiers, all want the same things, says Daniels. “They all want to attract the right people.”