Techno-savvy, digitally sophisticated 20 to 30 year olds are coming to dominate the workplace. Colliers International’s Generation Y: Implications for office markets report imparts what this means for commercial office facilities.
Colliers International’s Generation Y: Implications for office markets report provides insight into how office markets will look and behave in the future. It is the first in a series of reports exploring the different aspects of how Generation Y will impact the real estate market, including:
- implications for the design and format of office space in terms of the need for effective optimisation and workspace planning strategies
- human resources implications for occupiers in terms of the need to adapt policies that enhance employee recruitment, management and retention; and
- strategic office market implications – the supply/demand equilibrium and implications for owners, investors and developers in terms of how this may affect your office asset management strategy, what to buy/sell and what to build.
GENERATION Y ATTRIBUTES
Generation Y has grown up in a world surrounded by modern information technology and rapid technological change, the report notes. It states that the IT revolution is an integral part of their life and it is providing new employment orientations.
Coupled with easier labour migration and simpler access to employment opportunities, this enables Generation Y to constantly seek out the fresh opportunities they desire, the report adds.
Set against the context of a shrinking labour pool, this is placing collective bargaining power in the hands of Generation Y (and indeed Generation Z – the generation after them), and recruiting and retaining the right staff is a growing challenge, it states.
KEY IMPLICATIONS FOR THE WORKPLACE
Following its research Colliers International summarised a number of changes to the office market that are likely to be witnessed as a result of the growing influence of Generation Y. These include:
- technological advancement, notably with the use of mobile computing and communication devices and the growing sophistication of cloud computing; and
- changing corporate employment structures, notably an increase in alternative working strategies (AWS).
It is noted in Generation Y: Implications for office markets that these two factors go hand in hand, with technological advancement allowing organisations to deploy AWS effectively, and that while this in itself is nothing new, it is becoming far more prevalent.
According to Colliers International, this will impact upon workplaces in five key ways:
- An overall reduction in the demand for office space as a result of the increased implementation of alternative working strategies and more efficient use of the actual workspace.
- A change in the orientation of the workplace, with a greater need for more flexible space that combines efficiently planned workstations with flexible meeting rooms and a large proportion of fun/social space. While a shift from 12 metres squared per person to 8 metres squared per person is not uncommon, the requirement for greater flexibility and fun/social space means that we will not see an overall reduction in demand of one third.
- Much greater need for flexibility in the use of space, with implications for the underlying structure, technological platform and management of buildings.
- Space that genuinely conforms to sustainability standards will become a must have. In particular, energy efficiency will be a critical component of meeting demand.
- Greater demand for bespoke data centres, driving the growth of a relatively new niche market.
WHAT MOTIVATES THEM AND HOW DO THEY WORK?
Generation Y: Implications for office markets pinpoints the motivators and working style of Generation Y as:
- They are highly ambitious and expect many things as they are used to getting their own way. As well as being driven by higher pay and better benefits, they put a premium on interesting and challenging work, and a work environment that meets their lifestyle and needs.
- They have an internal desire to seek new and fresh challenges when the opportunity arises.
- Their ambition is not expressed in a desire for titles and external prestige, but rather through a real urge to move forward in the ranks. They expect to do this through the constant absorption of knowledge and skills.
- They require continuous and instantaneous feedback from management, yet dislike an authoritative management style. They want the flexibility to work to their own schedules, to break when they want to break, to leave when they need to leave and arrive when they need to arrive.
- They seek companionship at work, rather than just colleagues, as they function on a more flexible, social basis. This more casual attitude to work is leading to organisational networks where staff are placed by connections and skills as opposed to the more traditional hierarchical structures which place staff by title. In turn, this is creating the greater use of project-based teams to complete assignments.
- They want to be able to work remotely. They want to be judged on results rather than on their physical presence in the office.
- The work-life balance is a significant source of motivation. The need for flexibility to suit the demands of family and social life is a major factor driving employment choices, pushing organisations towards offering flexible alternative working strategies. This does not mean that the workplace will become redundant. In fact, we believe quite the opposite will occur. Given the pressure on companies to attract Generation Y staff, it is important that the workplace has the right blend of social/fun space that Generation Y can positively identify with. In locations where there is real pressure on housing in terms of cost/choice, this dynamic is likely to be even more pronounced, pushing the requirement for companies to ensure staff have their own private space at work.
- They have a social conscience. While they want their employers to meet their ambitions, they also want their employers to demonstrate a commitment to social issues. A clear majority prefer to work for an organisation with a commitment to social causes than for one without. Being green as an office occupier will become more of a ‘must have’ than a ‘nice to have’ in order to attract and retain staff. Coupled with increased government supply-side pressures to reduce carbon emissions and energy efficiency from real estate, this places direct demand and supply-side pressure on developers and owners to provide and maintain sustainable and well designed buildings.