Employers must put their best foot forward in 2024 to address upcoming change.
We recently bid farewell to 2023, which ushered in even more change in the real estate and office industries.
Landlords saw unprecedented vacancies and began rolling out everything from free rent to pre-built office suites. Employers begged, then demanded, that people come back to the office at least three days a week, igniting an ongoing war over how and where people work. Meanwhile, remote workers flocked to social clubs to work, and employers started paying attention—and redesigned spaces with a hospitality and luxurious mindset. And co-working giant WeWork fell into bankruptcy, but the industry stayed alive—and has kept growing.
As we move into the first part of 2024, get ready for more change. Climate change will heat up, artificial intelligence will go mainstream, hybrid work and office design will continue to evolve, employers will scramble to make work healthier and GenZ will take steps to revolutionize office culture.
We rounded up some of the big office trends that leaders will face in the coming months and how they can prepare.
The world is heating up, literally, and this year is a critical milestone in the fight against climate change. Yet the world is not on track. Many companies are still sitting on the sidelines, waiting to see what policies and regulations unfold around sustainability and climate action.
Pressure is mounting for companies to take more action. Designers see sustainability and energy consumption as a top trend in office design. In addition, employees and customers are pressing companies to rethink their supply chains, operations and products. At least 69% of employees said they want their companies to invest in sustainability efforts, including reducing carbon, using renewable energy, and reducing waste, according to a 2023 survey by Deloitte. That number grows among younger employees, between ages 18 and 34.
In addition, a new slate of rules are coming out this year that turn up the heat on companies. The European Union will mandate companies begin collecting and reporting climate-related data this year for the first time. California also passed a law for new climate disclosure rules for companies doing business in the state. And a global treaty to end plastic pollution could be finalized by the end of 2024.
This is the biggie that everyone has been talking about since ChatGPT blew up the world with its generative AI bot. This year, expect AI to continue to transform the workplace and the way we work. In particular, HR managers will use it to evolve beyond their traditional roles, focusing more on fostering leadership rather than just managing talent.
“This technology is not replacing human interaction, but it’s enriching it, enabling leaders to create workplaces that are more inclusive, engaging and empathetic,” says Theresa Fesinstine, founder of Peoplepower AI, an AI-HR consulting firm.
Already, AI is transforming corporate learning faster than experts thought, handling the training involved in everything from filling out an expense account to complex operational procedures. Companies spend an estimated $14 billion on training, according to Josh Bersin, CEO of the Josh Bersin Co., which analyzes the talent market and trends impacting the global workforce. Instead of taking a course on a topic, you can just ask generative AI bots a question and get an answer.
A slew of AI companies, including Eightfold, Gloat, Beamery, Seekout, Phenom, and Skyhive, now let companies identify hundreds of characteristics in their people, enabling them to intelligently source candidates, decide who to promote and identify pay inequities. There are also employee experience apps or “employee chatbots” that bring documents, materials and transactional systems into an easy to use experience. So “I want to log my vacation” can be as simple as asking a bot and being directed to the right spot.
Hybrid work and real estate
Last year, 90% of companies offered some level of hybrid work, according to a recent survey by office real estate giant CBRE. Yet we’re a long way away from where we were in 2019, when 60% of remote-capable employees spent their week working fully on site. In 2023, that number had dropped to 20%.Yet the fight over remote work may heat up in 2024. Managers and employees, three years after the pandemic, still don’t see eye to eye on where people should work. Last year, name-brand companies asked employees to report to the office more often, and while it’s not expected to be five days a week, there’s still disagreement about how much and whether those times are flexible.
Most likely, leaders and workers will meet in the middle, but experts say that resolution may depend on whether rising interest rates weaken the economy or if unemployment rises. Right now, employees sit in the driver’s seat in today’s labor market, but if that changes, then employers will be positioned to drive a hard bargain.
All of these factors drive decision-making when it comes to corporate real estate. Vacancy rates, while rising, have remained relatively low, according to Kastle, which operates the swipe-systems for corporate offices. Remote work could contribute to an extra 46 million square feet of empty office space across the country.
Efficient, flexible space
The adoption of hybrid work is driving companies to lease less space and redesign their offices to be more effective for employees, according to a survey collected by CBRE of 66 clients that own or occupy 350 million square feet of office space around the world.
Employees are more likely to share space or use different work environments for collaboration or focused work when they come into the office. As a result, employers are prioritizing shared space over private space to make the office more effective. Companies increased their “we space” to 20% last year, up from 14% in 2021, according to CBRE. Employers will continue to embrace flexibility – not only in where people work but what their office space looks like. Because there is no one-size fits all for work styles and needs, employers want moveable, modular office designs, spaces that mix work with hospitality and designs that make work inviting.
The multi-generational workforce
As boomers retire, HR execs will be faced with managing a multi-generational workforce that looks a lot different than years past: a combo of Gen X, Millennials, and Gen Z. This workforce demands a collaborative environment, inclusive policies, cross-generational training, and flexible work arrangements. GenZers are poised to become the dominant generation in the workforce within a year, and they may very well revolutionize the way we work. So it will be paramount that employers understand this demographic group to ensure they can draw talent in the future.
Wellbeing and Mental health
It’s no secret that our workforce is unhappy: burnout, quiet quitting, financial stress and mental health struggles followed us into 2024. It’s crucial that employers figure out how to go beyond wellness perks and tap into what’s truly meaningful for employees. This means ensuring that managers are checking in, employees feel empowered and safe, and services are easy to access.
The year has just begun, and change is already underway. Smart leaders will dive into the issues that matter because employees, customers, shareholders and the planet depend on getting 2024 right.