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Revisiting your talent strategy for a hybrid world? Think hard about the purpose and design of your office space.
In this episode of the McKinsey Talks Talent podcast, McKinsey talent leaders Bryan Hancock and Bill Schaninger speak with senior expert Phil Kirschner about the office space of the future: what workers want, what employers need, and how workplaces will need to change accordingly.
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The new balancing act
Lucia Rahilly: We’ve seen a lot of media coverage on the return to the office, including some CEOs coming out forcefully, essentially mandating return. At the same time, other leaders seem to be walking back previous recommendations about whether and how often they expect folks to come in. Phil, any sense of whether employees are actually responding to the call to return to the office?
Phil Kirschner: Generally speaking, they’re not. It’s important to go back to the pre-COVID-19 times and understand that we weren’t in the office 100 percent of the time. Almost anyone I ever talked to, any client I ever served, wanted one or two days’ more flexibility than they officially had.
Now we have a choice to be there. And because it wasn’t that great to be in the office before, we find ourselves at this impasse where employers feel they have to order folks in. But that’s new all around, to go back to something that they didn’t really like prior to COVID-19.
Lucia Rahilly: Bryan, you’re talking to business leaders every day. What do your clients think is at stake as they grapple with the challenge of bringing people back to the office?
Bryan Hancock: They’re seeing two things at stake: one, they’re trying to figure out “How do I get the people I need to execute on the mission?” And two, as they’re coming up with the strategy, they’re trying to figure out “OK, am I going to lose somebody if I have too stringent a policy?” Or on the flip side “Can I attract somebody if I open up my availability for talent anywhere in the country?”
We’re recognizing that some work can absolutely be done anywhere. Individual contributor work and going through your emails doesn’t require you to be in the office. But there is some work—in particular, coaching, mentoring, some of the creative interactions that happen together—that does require people to be together somewhat regularly. That balance does require some degree of flexibility but also some degree of in-person interaction.
Lucia Rahilly: I want to go back to this question of attracting talent. But before we do, Bill, we talked on this podcast recently about what at least appears to be a rise in worker power, given the tight labor market right now. Do you actually think this recent spate of mandates will jolt folks back into the office?
Bill Schaninger: Probably not. I’m surprised we’ve had this run of mandates. People have gotten a taste now of not all work needing to be done in a cube. You don’t have to drive 90 minutes to get on a Zoom. I wish the resources we put into working capital, cost cutting, and new sales approaches would be reallocated to support the work that needs to be done together.
If there are enough meaningful kick-off meetings for projects, you might need two weeks together to say, “Let’s define it. Let’s scope it. Let’s lay it out.” Then, once you have the workstreams running with good governance, why not let the work drive the decision of whether to be together?
Some work needs to be done together, but not a spurious mandate—not a “We’re back in charge now” orientation. I think that’s a fool’s errand and will continue to destroy your value proposition.
What workers want—and don’t
Lucia Rahilly: How do you think the design and the configuration of the office dovetail with the design of an organization’s tasks, its roles, and its culture?
Bill Schaninger: There’s a cool science behind it. But also, this is a lot about power. We should let Phil tell us where we’re at because we’ve had this weird interruption for two years in what we were doing with office space.
Phil Kirschner: You’ve reminded me of my very first pilot of any workplace mobility program, which means when we come to the office, we share things—all of us. At the end of that very first pilot, one of the senior managers who had been in an office forever and was used to seeing the same set of people working outside his office forever realized, and said on camera, something you’d think we’d paid him to say.
He said, “I feel like I have lost my office through this transition, but I’ve gained a floor. I have all this diversity and access not just to meet different people but to use different typologies of spaces and technologies and signals and feeling and design throughout my day to best serve my needs and the needs of my team.”
That’s been happening in the decade leading up to COVID-19—a real emphasis on the fact that space can signal what it’s good for. And if you untether people from the desk, and most important, train managers to rethink what it means to know that someone is or isn’t being productive, they can truly lean into a wider variety of spaces.
Especially now in the post-COVID-19 world, we’re seeing an explosion of supply—available work spaces of even more shapes, sizes, feeling, and locations than any one employer could ever provide. Giving employees access to that total ecosystem of spaces can provide empirically a higher perception of performance or workplace satisfaction than one location, one office could ever give them.
Lucia Rahilly: Back to Bryan’s point about attracting talent, all of us would prefer to go into a nicer office versus a shoddier office. We all like good coffee. We all like high-quality snacks. But that doesn’t necessarily compensate, for example, for suddenly needing to resume a commute, especially with the rising price of gas. How does this new office you’re invoking have a role in helping to attract workers back to in-person work?
Bryan Hancock: There’s some great research by Steelcase, the office furniture manufacturer. They did some great research on individual workers to determine what kind of spaces were going to be most attractive or most needed, and therefore, what the future office would look like.
The researchers saw that there would be a rise in the need for individual spaces, not open-floor access but individual places where there’s quiet to get work done. They’re seeing a number of workers, in particular younger workers, saying they need a place to go to do that individual work, or at least a subset would like to have that option available some of the time.
There’s also a rise in the need for real team space—not just the occasional conference room but actually the time to get together as a team, to have the right space together, to have the right access to the tools they need to collaborate, and the right access for snacks and other pieces. Do you have a convenient team space with the right setup? Or is it an old conference room that’s been converted? The needs might be a little bit different, but are we thinking about the right team space?
It really is thinking through the individual need, the team need, and the need for compelling broader space, and are we meeting all of those needs? And I think if they are, then it makes it an even more attractive workplace for the workers. Phil, I’d love your thoughts.
Phil Kirschner: I’m really glad you brought up the point about younger workers, because there is definitely a statistical correlation between the quality of the environment you have at home and your likelihood to want to overcome the friction of going to the office. The younger workers are more likely to have three roommates and two cats, sitting at the dining room table, versus all of us who are sitting within an enclosed space with a door, which we’re fortunate to have, either at an office or at our home.
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Bill Schaninger: The office was the bully pulpit, you know, with leadership striding down the main hallway. Think about movies and TV shows where the centrality of the ecosystem was the office in terms of the power dynamics. It’s not surprising to me that the people who’ve been in charge are still anchored on that construct, because it’s what they’ve known and how they’ve been trained. I think when you saw libraries become less central because everything is accessible digitally, you saw a massive movement out of the physical space of libraries.
We’ve had a generation now entering the workforce who is used to accessing everything, all the time, anywhere, except for project work, as a solo endeavor. A huge portion of what we’re doing at work is not a solo endeavor. It requires working with others.
There is a pretty significant collide here in terms of the nature of the work changing and their experience on both ends: the folks who are in charge and the folks coming into the workforce. They’re not experienced with the sort of fluidity that Phil’s describing. It’s a massive mismatch.
Bryan Hancock: An interesting thing that I’ve seen about people entering the workforce was a survey done of college graduates and very, very few wanted to work remotely five days a week. There was an interest in having flexibility of when and where they work, but they wanted to come in sometimes because they wanted the connectivity to where they’re working, and they specifically wanted connectivity and mentorship with the generations above them.
In some cases, the need is not to get the young kids in; it’s making sure the people who can mentor, who are just happy to be remote in their vacation house in Aspen or in the Hamptons, to come in. Because that mentorship is something that is important to the new joiners and also important for the overall development and health of the organization.
Phil Kirschner: I find myself telling executives a lot these days, “Congratulations. You are the new amenity.” It used to be the gym, the cafeteria, being able to bring puppies to work, whatever it is, but the executives are the new amenity.
I spoke to the head of real estate for a large bank that’s just done a major headquarters relocation during COVID—beautiful building. She said, “Yeah, people have been really excited to come in.” And I said, “What is it that is bringing people in?” And knowing this is a European bank, they’ve got a beer garden in the building, like, everything you could ever conceive of is an amenity. She said, “The other people,” which is a really hard thing to admit for the head of facilities. But it’s true.
