Developing Office Spaces that Value Experience Increases Corporate Value

A common requirement for the development of any kind of office space is to focus on people working there. Although efficiency and office facilities are also important, global companies in particular are beginning to understand that an office environment that achieves the well-being of the people working there is essential in order for an office to earn profit.

March 02, 2018

Work style reform is not going well

As the birth rate continues to decline and the population grows older and older, Japan is suffering from an apparent shortage of workers, and the fight over human resources among companies is heating up. In order to secure talented human resources, companies are working on “work style reform.” However, this does not always go well. There are a truly large number of companies whose efforts toward work style reform start with reducing working hours, but despite shorter working hours, employees are charged with the same amount of work as before, and many of them end up finishing their job at home. This only serves to lower employees’ motivation to work.

What do we need to implement work style reform in an effective way? One answer lies in the workplace. In short, the key is building a comfort space to work. Providing a healthy and comfortable working environment helps companies secure human resources and encourage existing employees to stay for the long term. It also boosts productivity per employee. Nonetheless, “comfort” is a highly subjective indicator, and each employee has a different sense of what is comfortable. For example, what do you think of an office whose ceiling pipes are exposed? Exposed pipes are a common design feature in trendy offices, and are popular among startups. The higher ceiling creates a sense of open space. This is one example of steps to make the office environment comfortable, but it is not guarantee that all the employees will find this type of office comfortable. It is also difficult to quantify workers’ motivation and determine whether it has increased.

JLL’s global research

Workplace Powered by Human Experience, a report on a global research project by JLL published in June 2017, concluded that experience is the most important key to raising employees’ motivation. The research report was based on results obtained by JLL through nine workshops with HR personnel and real estate experts from 40 global companies and a survey of 7,346 people from 12 countries. Through the project, JLL has reached the conclusion that “human experience is driven by people, and productivity of an office or a company depends on human experience.” A workplace powered by human experience is an office where workers commit to their companies and jobs, can control their workplaces and work styles, and feel comfortable being there. It is the idea that building a workplace where people can experience work this way voluntarily will dramatically increase productivity and create new, innovative work styles. “The idea of developing an office with a focus on the people working there has recently been a topic of serious discussion among global companies,” says Toshiro Sato of the JLL Corporate Sales Headquarters. The times when offices were judged based on cost have passed. Now, companies have come to see the workplace as a place for earning profit, and are focusing on how to draw out the maximum performance from the employees working there, and on how corporate value and corporate profit are dependent on how workers work.

The biggest reason that the significance of human experience is being acknowledged is because it sets an office apart and helps companies acquire human resources. A workplace where workers can have a superior experience will attract talented workers. In addition, it helps companies deliver a clearer corporate image when they invite their clients to the office, and they can show that their employees enjoy their work.

In the above-mentioned research project, opinions about the effects of introducing human experience were delivered from the CRE personnel who participated in the workshops. Examples of such effects are: inspiring innovations to bring out workers’ creativity and encourage collaboration, improving well-being and performance to enhance their physical and mental health, introducing and establishing corporate culture among employees, and increasing their agility, to name a few. Providing flexibility and diversity in a workplace helps employees to stand up, mobilize themselves, and create more opportunities for collaboration voluntarily. There have been some interesting cases in which companies succeeded in accelerating jobs and business undertakings naturally through such an approach.

Of course, however, building an office space with such strategies will incur a certain level of costs. To this, Sato says, “The top management of companies that are taking serious steps for work style reform are not stingy when it comes to investing in rethinking their workplaces as part of their management strategies.” This is because doing so gives a boost to the corporate value as well as productivity and profit. The fact that more shareholders focus on productivity-oriented return on equity (ROE) that is not dependent solely on asset compression also encourages this situation. This approach has already spread among companies that compete on the global stage and been put to practice.

Offices in Japan are crammed full

Nonetheless, we have to say Japanese companies’ mindsets are still conservative. In the above-mentioned research, JLL conducted a survey of 508 people in Japan who work at companies with more than 100 employees. The result revealed that the most common type of workplace in Japan is an open-plan office consisting of one large room, and many companies cram their workers in such open-plan office spaces. The average number of people per workplace in the world is 45, but in Japan, it’s 68— far above the global average. “The office density in Japan is higher than it is in China, which tells you just how crammed workplaces in Japan are,” says Sato. On the other hand, 75% of Japanese workers spend their time at work sitting in their assigned seats, and if you exclude people in managerial positions, that number increases to 80%. This indicates that they don’t have much choice at work. Furthermore, the introduction rate of community spaces, which are intended to serve as a workplace that inspires innovation, remains low at 35% in Japan, falling far below the global introduction rate of 56%.

However, these problems are recognized. JLL’s questionnaire contained the question: “Can you do your job effectively in the workplace that your company provides?” While 52% of respondents worldwide answered “Yes”, in Japan, only 37% felt the same. In Japan, workers’ satisfaction with their workplaces is lower than it is in the rest of the world, and we can safely say that these results, in a sense, confirmed that there is still plenty of room to improve work style reform by rethinking workplaces.

Unless office development is tackled in earnest, work style reform is just a pie in the sky.