International businesses struggle to manage workplace complexity in a post-Covid landscape – London Business News | London Wallet

International businesses are struggling to manage the complexity of the workplace post-covid and increasingly returning to office-centric models, according to Knight Frank | Cresa, the partnership between Knight Frank, the global property consultancy and Cresa, the world’s largest occupier-centric commercial real estate firm.

Knight Frank | Cresa’s (Y)OURSPACE report, published every two years, is one of the world’s most comprehensive surveys of international businesses on their workplace strategies and real estate requirements. It reflects the priorities and challenges of senior leaders responsible for real estate decisions at over 350 firms, which collectively employ more than 10 million people.

The report lays bare the practical challenges employers face in implementing a post-pandemic workplace strategy that meets a growing list of corporate requirements. As many as 60% of respondents expect the complexity of managing their workplace strategy to increase or greatly increase in the next three years.

Most global corporates, 56%, plan to move towards a ‘hybrid’ workstyle, offering employees a mix of home and office working, but almost a third, 31% are implementing an ‘office first’ or ‘office only’ approach. Just 12% of firms plan to implement a ‘work from anywhere’, ‘remote first’ or ‘fully flexible’ workstyle.

The need for firms to meet their strategic objectives, transform for the post-pandemic era and overcome the growing challenges of both functional and physical obsolescence will also lead many occupiers to seek new office buildings. 47% of global firms expect to replace their corporate HQ in the next three years, an increase on 40% in 2021. 55% of firms expect to increase or greatly increase their total office portfolio over the next three years, with the growth primarily driven by firms of up to 10,000 employees. In contrast around 50% of the very largest firms surveyed, those of over 50,000 employees, anticipate some reduction of space in their global portfolio.

As firms look forward, real estate is now clearly seen as a strategic device for implementing corporate objectives, and not just a cost to be managed, with 94% of respondents regarding real estate as entirely or partially aligned with the broader strategy of the business. This strategic alignment will be important as pressure to transform business models increases – 86% of firms anticipate at least one form of business transformation – and the most popular transformation route being the entry into new geographical markets (45% of all respondents).

Dr Lee Elliott, Global Head of Occupier Research at Knight Frank, said: “Now that we are in a truly post-pandemic world, corporate decision-makers are ‘removing the blinkers’ and making clear decisions around their future corporate real estate strategy based on a broader array of business issues than just the pandemic. The vast majority are opting for a hybrid or ‘office first’ approach, bringing them much closer to how many corporates were viewing their future needs before the pandemic, with just 12% of firms now pursuing a ‘remote first’ or ‘fully flexible’ model. Firms are looking to work their offices harder, but still offer some flexibility to staff.”