How do today’s offices stack up against one another?
Benchmarking in modern offices is evolving to include more sophisticated qualitative assessments of the workplace experience – and it’s an increasingly important tool for companies looking to stay competitive.
Today’s companies aren’t just thinking about how their office location or their use of space measures up to their competitors. In the battle to attract and retain the best employees, they’re looking at how their whole workplace experience compares.
Businesses have traditionally taken stock of their real estate through data such as the cost-per-square-foot or occupancy rates across desks. But as the focus shifts to providing a more human-centric workplace, companies are increasingly interested in benchmarking employee wellbeing metrics.
Such metrics might include the number of quiet spaces or private hours of work completed, as well as how much employees use – and appreciate – features such as on-site fitness centres or instant communication with their managers.
“Benchmarking provides visibility and awareness of what competitors are doing and how companies can optimise the spaces they already occupy,” says Andrew Hawkeswood, Director, Global Benchmarking Services at JLL.
“But now winning at operational excellence is no longer seen as enough. As employees look beyond salary to the workplace environment and the amenities, companies are now treating real estate as a business asset that attracts and retains talent.”
He points to CFO of a global bank, who had just found out his company’s real estate was more streamlined and was operating more efficiently than its peers. His response was: “Ok, but are we a great place to work?”.
Benchmarking of responsible business initiatives is also a growing area from sustainability credentials to engagement with local communities and social enterprises.
“Doing a qualitative assessment of services, amenities and branding means companies can properly understand whether workplace initiatives are having the desired impact – and whether they’re worth the investment,” says Hawkeswood.
Analysing the impact of investment
Quantitative data also remains key. The rise of smart technology is helping to improve benchmarking as increasingly tech-enabled offices generate growing amounts of data.
“Today, data plays a larger, more relevant role in our lives. Benchmarking isn’t new, but it has become more prevalent because of the growing volumes of data that are now accessible,” says Bruce Horne, Head of Operations, Global Benchmarking Services, at JLL.
It’s not just a case of using data to gauge how a company’s real estate measures up against their competitors or industry leaders. It’s also about understanding how different areas are used – especially as flexible space becomes a bigger consideration.
“Even if money isn’t an issue, understanding how a space compares to others in terms of value and amenities helps managers make decisions about investments,” says Hawkeswood.
Meanwhile, for multinational companies, benchmarking across their property portfolio can illuminate which regions or buildings are performing most efficiently, both within their business and across the industry.
This can not only inform decisions to expand or shut down in particular locations, but for the growing number of companies looking to incorporate flexible space, it can also drive their strategy for finding new workspace.
“The flexibility and agility of real estate is increasingly a key benchmark,” notes Hawkeswood.
Need for consistency
The effectiveness of benchmarking nevertheless relies on consistent business or space metrics being compared. For example, differing definitions of a square foot in various countries must be factored in before an accurate comparison can be struck, while prices in multiple currencies have to be calculated according to region-specific costs of living.
“Companies sometimes underestimate how tricky it can be to collect data from disparate regions and systems, and structure it appropriately for comparison, which can lead to problems both in terms of trusting the metrics and developing the portfolio,” says Horne.
Even within a single building, it may not be straightforward to devise a benchmarking analysis that incorporates the most effective metrics for a particular company and its business goals – although frameworks such as GEMcode (Global Estate Measurement Code) can help.
And for less tangible business goals, it can be a challenge to arrive at meaningful results.
“Measuring metrics such as employee happiness is difficult, because it’s a balance between the space itself and job satisfaction, including financial reward, of course,” says Hawkeswood.
Benchmarking for future buildings
With companies increasingly interested in smart buildings, benchmarking will be a crucial factor in helping managers understand how their investment in technology is performing, and where future opportunities lie.
“Employees are getting more collaborative and more mobile and their workplace demands are changing,” says Hawkeswood. “The smarter the building, the more it enables its occupiers to manage the user experience for employees.”
As the office environment evolves, benchmarking is equally adapting to include an ever-wider field of comparative metrics.
Companies keen to show their commitment to sustainability, for example, could compare low – or negative – carbon emissions. More assessments around employees’ wellbeing are also likely, such as access to mental health support initiatives or the presence of a Chief Happiness Officer.
Combined with increasingly accurate and comprehensive data, companies will have a better idea of how the workplaces they create actually perform from a corporate, competitor and employee perspective.
“With data-rich smart buildings set to be the norm, benchmarking offers a way to harvest that data so companies can understand what they’re spending and where they’re growing,” says Horne. “The more data there is, the greater the potential for better management, when it’s analysed in the right way to deliver strategic insights.”