How Hong Kong businesses are using office space to win the war for talent
In conjunction with the release of the Buildings of the Future e-magazine, Aurecon hosted an industry forum on the future of buildings in Hong Kong. The forum catalysed important conversations about the future and how Hong Kong’s unique industry conditions may affect the shape of Buildings of the Future.
This article focuses on one of the common themes that emerged from the forum: space saving and the war for talent, specifically in the Hong Kong market.
Is saving space a priority for tenants in the world’s most expensive rental market?
Activity Based Working involves planning the working environment such that workers do not have a fixed desk, but are allocated a space on a daily basis depending on the nature of their activity, their personal preferences and whether they are present. Workers can choose between a normal desk, working at the coffee shop, or at quiet areas or meeting rooms. In some companies, this has shown to dramatically reduce the space requirement (30 to 50 per cent). The approach is particularly popular with many multi-national companies, but has limited take-up in the world’s most expensive rental market – Hong Kong. This includes many multinationals where local managers cannot move beyond the large corner office syndrome.
Hong Kong’s office rent is by far the highest in the world. JLL’s Premium Office tracker for Q4 2016 shows the office rent in Hong Kong’s Central district is 50 per cent more expensive than the next two most expensive locations, New York’s Midtown and London’s West End.
What is it about Hong Kong that our companies are not responding to the cost pressure that is driving management response in places with much lower rental costs?
It’s not only about saving money, but providing a more interesting and varied work environment. It’s about winning the war for talent.
Improving the working environment to win the war for talent, and the other wars!
Despite the reluctance to adopt Activity Based Working, employers are looking at improving the working environment in Hong Kong to attract the best talent. A number of employers are adding features such as cafes, outdoor areas and other socialising spaces to their office fit outs that only produce a return on investment if they increase the output of their staff. This is partly about making their staff happier and more productive but also about retaining staff and attracting new talent.
When you look at the costs of establishing an office. The salaries of the staff far outweigh the cost of the property and other add-ons like energy. The British Council of Offices estimated that 85 per cent of the cost was salaries1. Spending that money on the right people and convincing them to stay is therefore the most powerful way of improving business outcomes.
The concept of contributing to the wellness of your staff by improving the working environment will gain more traction in the years ahead. Seven contributing factors have been identified – air, water, nourishment, light, fitness, comfort, and mind.
Finally if you haven’t seen the short movie on “The Edge” in Amsterdam, it provides a view into a very advanced building.
The Buildings of the Future: Hong Kong Industry Forum was hosted by Aurecon with representatives from Arcadis, Atkins, Farrells, Gammon, JLL, Leighton, Mapletree, Nan Fung Developments, and Woods Bagot as participants.