Rethinking the office

Rethinking the office

Design and management of future workplaces will be driven by the real reasons people need to be together in person.

Office buildings surrounding the Chong Nonsi Skywalk in the Sathon area in central Bangkok.
Office buildings surrounding the Chong Nonsi Skywalk in the Sathon area in central Bangkok.

What is the future of workplace and retail real estate? Let's start by thinking about the occupiers -- for example, the companies that own or lease space for their employees.

They will need to reorient their real estate strategies for competitive advantage and try to identify the moments that matter for coming together in person again. After Covid-19 began, flexible became a key part of how we work -- and that way of working is here to stay.

At the same time, the human touch and physical presence are still needed, but they have a very different purpose now versus in the past. For instance, if employers want to strengthen employee connections, improve social capital, onboard new hires or evaluate potential acquisitions, maybe for these types of activities, it still helps to be together in the same place.

But these places won't be the same old offices as we thought of them before. They might include "third places", such as co-working locations or on-demand meeting and event spaces, both of which could be combined with personalised services.

Now let's think about the future of the workplace from the owner and/or operator perspective, where there are different considerations. Not only will there be a reduction in demand for traditional offices, but much of today's office space won't meet the flexibility and experience needs of future occupants and workers. As a result, there could be both an oversupply of space and a scarcity of offices purpose-built for flexible work.

Can you imagine, for instance, a big, open space with hundreds of people, and most of these people are on videoconferences with colleagues who are somewhere else? That would not be sustainable.

People meet in a co-working space. The layout of offices in the future will likely change, with individual offices bookable for when people are in the area.


Offices need a completely different layout, in line with the needs of the flexible and remote world. You'll need individual offices, though maybe not just for one person. Instead, these would be bookable for when you are in the office.

You need centres of gravity, where colleagues can connect effortlessly. You need integrated employee experience applications that make it easy to coordinate with both onsite and offsite peers and reserve gathering spaces, hospitality services and technology support as required. "Community managers" should be available to engage and support employees across the physical office and virtual workplace.

Most companies were already making strides towards efficiency even before Covid-19, but the pandemic and flexible work accelerated things even more. From a remote working survey that McKinsey conducted in 2020, we learned that most leaders planned to save an average of 20% to 30% on real estate expenditure because of remote working. But we have seen some companies reduce their office portfolio costs by as much as 60-70% in the most ambitious cases.

Given these savings, leading companies are reinvesting this surplus to do a true leapfrog in terms of technological tools and employee experience. Some companies are already investing in cutting-edge technologies, including digital twins and augmented reality, that can help employees work smarter and with a greater sense of connectivity.

Real estate decisions are increasingly linked to people and organisation. In the past, real estate and facility management was typically under the chief financial officer and sometimes the chief executive. Since the pandemic, we have seen the work in this area shifting more to human resources. But HR is no longer just about HR processes, strategic workforce planning and performance management. Today, HR encompasses creating the best environment for talent to help make people both happy and productive.


We can draw some comparisons between the changing workplace and what is happening in retail. Just as during the pandemic many of us worked from home, we also embraced shopping from home. Now, we are partially back to offices and partially working from home, and we are re-examining the purpose of the office. If you think about retail outlets, it's more or less the same.

We lived for a couple of years buying everything online. But today, in general, 60-70% of consumer shopping is done in an omni-channel manner, which means maybe I go to a physical shop to check things out and then I order online.

If retailers are able to reimagine their footprint in a way that is designed for omni-channel, they will have a new value proposition with a variety of formats. The main lesson from what happened in the pandemic and from the new way of shopping is the experience, not just the product, will make the difference.

The changes that occurred in the new world of work and to the workplace are totally unprecedented. Though it is a pity that for many CEOs and entrepreneurs, their own personal style is affecting a lot of the decision-making about whether to go remote or not. They are often deciding what to do based on their preferences. But leaders can and should base these decisions on a more scientific approach.

Federico Marafante is a partner in the Milan office of McKinsey & Company.

Do you like the content of this article?