By Ken Ashley, Executive Director
Originally published on LoopNet.com, June 24, 2019
At last year’s CoreNet Global Conference in Boston , CoreNet chairman and Ernst & Young’s Americas leader David Kamen remarked that corporate real estate spaces are now being designed to suit the generation of Americans that are currently in high school.
It makes sense—considering the fact that landlords are demanding longer lease commitments that commonly stretch from 10 to 15 years. And as office styles change regularly, corporate real estate professionals are wondering which trends are here to stay.
According to market research, the group most likely to influence the next evolution of office design is Gen Z. The youngest members of that group are currently sophomores in high school, and the oldest are 23 years old. They look at the world very differently from millennials.
Too young to truly recall the repercussions of the September 11 terrorist attacks in 2001, the Great Recession of 2009-12 is the major life event that likely held a larger impact. From a child’s perspective, they observed the foreclosures, personal bankruptcy, and relationship strife faced by their parents and older family members.
Publications, such as Fortune, point to fact that Gen Zs will be more like their grandparents and even older relatives from the Depression era of the 1930s . This means future Gen Z employees will be financially conservative, focused on safety, and incredibly hardworking. They are also digital natives who expect cutting edge technology at home in and the workplace.
Based on research conducted by Christina Banks from the Berkeley Hass School of Business, here are some observations about the preliminary impacts on office space from the next demographic to enter the CRE space:
- Benching is not what Gen Zs want; The open office will likely revert back to a micro-privacy environment.
- Assigned seating will come back as Gen Z workers want their own personalized space.
- Technology is assumed to be fast and easy to use.
- Wellness and mobility are emerging as key workplace factors; The office workers of tomorrow will want to have an active work environment.
- It’s expected that company tenure will be shorter, with stints of usually two to four years within companies and industry sectors.
- Employers may not get “contiguous and continuous” work, but they will get their eight to 10 hours, even if Gen Z staff log in from home.
- Gen Zs exhibit a strong need for empathy and want their company to care about them.
- Values matter. Gen Z employees want to work in places where they, and their company, can make a difference in this world.
- They want to align themselves with people who share the same values and ethics.
- After spending so much time with digital media and technology, the emphasis on connections to the nature and natural light will be highly desired.
- Premises security is paramount. This fresh generation of young workers has endured a fair share of school lockdowns and drills.
So what’s the bottom line impact on workspaces? Our future workforce wants flexibility, mobility, and privacy options in the workplace. Bringing them to an open-office environment will drive them away, and they want to choose how and where they work. Offering thoughtful work-life balance and privacy will go a long way to retain their talent.
As an advocate and advisor for companies who lease or own real estate, Ken Ashley has worked for over 19 years to help business leadership translate business strategy into real estate solutions that help not only cut cost but boost profits. He believes that real estate can enable high-level business performance and, when properly executed, serve to differentiate smart companies from their competition.