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Here’s what you need to know today:
- The Yard Announced New Midtown Location
- JLL’s Earnings Fell Last Year As Leasing Activity Slows
- Salesforce Announces “Work From Anywhere” Strategy
- Most Small Businesses Are Not Seeking Office Space This Year
- What Employees Want Out Of Their Workplace
- How Workplace Technology Will Continue To Evolve
The Yard Announced New Midtown Location
Flexible office operator the Yard had revealed it will open a new location in the defunct Courtyard by Marriott in Midtown.
The company said that it signed a management agreement with the owner of the 76,000 square foot former hotel at 8 Herald Square.
The building is currently undergoing renovations to be turned into a flexible office space, with hotel rooms on the fourth and fifth floors being converted into private offices.
The space will feature 180 private offices, conference rooms, coworking areas and other amenities that will be added in the future.
The property once was home to office spaces before Hidrock Properties, through an entity called 960 Associates, converted the building into a hotel in 2009.
This space will be the Yard’s first location that uses a management contract rather than a traditional lease, which allows the company to be paid by the landlord to manage and lease the offices, similar to how hotels operate.
Now, the Yard is in talks with other landlords in New York to open new locations with this agreement model.
“The dynamics [have] to be the same. The property has to be the right property. And economics needs to be the right economics,” said Richard Beyda, cofounder of the Yard. “If you come in with a landlord, and you both have realistic expectations, and the location works … it should work.”
JLL’s Earnings Fell Last Year As Leasing Activity Slows
JLL has announced that its earnings fell by 24% last year to $860 million, mainly caused by the plummet in leasing revenues.
The firm saw leasing activities fall 26% to $1.8 billion, as well as fees from capital market deals drop 11% to $1.3 billion.
The company also saw around $330 million in savings last year through salary cuts, layoffs and government aid.
According to JLL CEO Christian Ulbrich, the company expects sales and debt placement to grow more quickly than leasing activity, particularly in areas like Europe where there have been restrictive lockdowns.
“We are overall much more optimistic for the capital markets outlook than we are for the leasing outlook,” said Ulbrich.
Salesforce has announced that over half of its staff will continue working remotely or flexibly after the pandemic is over.
The company’s new “Work From Anywhere” strategy is expected to include over 65% of its staff according to a company survey.
The company’s office itself will be reconfigured to accommodate a more collaborative environment, with breakout areas to focus on connecting workers together.
The company also stated that by adopting this workplace model, it will be able to expand and widen its talent search since workers will no longer be geographically limited.
Currently, Salesforce has over 9,000 employees in the Bay Area and leases over two-thirds of its Salesforce Tower.
It is still uncertain what this means for the future of Salesforce’s office footprint in San Francisco. However, it wouldn’t be shocking to see the firm downsize as many other companies like Old Navy and Pinterest have walked away from their offices in the city over the past year.
Most Small Businesses Are Not Seeking Office Space This Year
According to a new report from business-to-business research firm Clutch, over half of small businesses without an office don’t have plans to purchase or lease out space this year.
These businesses mainly cited that the benefits of remote working outweigh the expenses of an office.
“The main benefit of embracing a remote workforce for small teams is that it allows them to punch above their weight,” said Kevin Harrington, CEO of job searching platform Joblist.
Specifically, Harrington said that with a remote workforce, companies can cut down on administrative costs, expand their talent pool, as well as boost productivity and employee satisfaction.
Additionally, more companies are anticipated to adopt coworking spaces in the future in order to continue providing workers with a flexible office, without the expensive overhead costs.
Along with this, hybrid work arrangements might be on the uprise. In fact, the research found that 32% of businesses stated they would continue to lease office space and operate with a partially remote workforce.
For instance, sports nutrition organization Gainful will use a hybrid work model in order to continue nurturing their workplace culture.
“While our team has proven that we’re able to make incredible progress and work effectively from home, I don’t anticipate that we’ll ever see a total disappearance of in-person workplace culture,” said Eric Wu, co-founder and COO of Gainful.
The idea of the workplace has completely transformed over the past year. Now, sitting at one desk from 9 to 5 is a relic of the past.
Instead, the pandemic has highlighted the fact that there is a work alternative that is not only more convenient, but also produces better results.
“The pandemic has hastened the realisation that work is not somewhere you go, but something you do, no matter where it happens,” said Flore Pradère, Research Director of Global Corporate Solutions at JLL. “And it’s the workforce – empowered by technology and looking for companies to do more on supporting their wellbeing – who is now driving and accelerating change. Businesses need to reinvent themselves with the workforce front of mind.”
The ability to work from anywhere has opened a world of opportunities for businesses, who are now looking to new strategies to create a better work experience.
But what does this look like from the employee perspective? What do employees want out of their workplace?
For starters, the idea of the five day work week is dead. With companies embracing technology and collaboration tools, employees want to work remotely at least 2.4 days a week after the pandemic according to JLL research.
Flexibility is the overarching theme of the future of the workforce. This means incorporating flexible offices into a company’s strategy in order to accommodate workers who want to return to an office and socialize with colleagues, without the lengthy commute into the city.
Beyond the mass shift to remote working last year, technological advancements will continue to play an important role in how companies bring their employees back into the workplace. Regardless if an organization is opting for a hybrid work arrangement or a hub-and-spoke model, technology will continue to be a necessity moving forward.
With this need, technology will also need to evolve to better accommodate the new future of work.
We have certainly become well-adjusted to video conferencing tools like Zoom and communication resources like Slack, but there is more to be desired to fully engage employees moving forward.
For instance, health and safety in the workplace has quickly taken a front seat in workplace discussions. According to NTT’s 2020 Intelligent Workplace Report, 75% of employees prefer to work in an office as opposed to their homes, which means companies will need to make big moves to create a safe workplace.
Using health and safety apps to keep occupancy levels low, complete health checks before coming into the space and receive employee feedback is a great way to ease the concerns some workers may have about returning to the office.
Employee engagement has been one of the biggest struggles business leaders faced last year, and it will continue to be a challenge in 2021 as well.
By using employee experience (EX) technology, companies can make accessing work-related tools easier and more seamless.
For instance, EX technology can include enterprise social networks, one-to-one video chatting and well-being portals all in one place to help employees stay connected and help them be more efficient.
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