Tech Sector Drumbeat: Amenity Inflation Is Here To Stay In Dublin Workspace

Amenity inflation: You may not have seen the expression before, but you certainly will in the next 18 months as pressure to add funky new floorspace-consuming amenities grows in Dublin's super-tight office market.

But how much more inflation can occupiers and landlords cope with amidst demand for amenities as various as wellness suites and bouncy castles?

Ahead of the Dublin Workspace of the Future event on 21 June, Bisnow went to find out.

Every Dublin occupier wants to attract and retain talent, and in the tech sector the competition is fierce. A reputation as a good place to work is a powerful recruitment tool.

For California-based software house Workday — named this year as one of Ireland's best workplaces — keeping the team at their Four Courts European HQ happy is important. Staff amenity plays a crucial role in a low staff attrition rate of just 5%.

But keeping them happy seems to mean an ever-increasing demand for new facilities. At Workday this translates as a new 3K SF wellness suite and — more unusually — a 250SF drum-kit-and guitar-equipped music practice room at the 180K SF Kings Building they moved into in 2015.

“We’re proud of being a great place to work, and a music practice room was high on the list of things staff asked for," Workday Workplace Manager Shane-Louise Connolly said. "I’m now getting hounded by staff on when it is going to get built, which is fine because employees come first and we deliver what we can for them. That’s my job.”

The music room was one among several staff suggestions, some more plausible than others. “People aren’t asking for silly things — we’ve had no requests for pet tigers — but you do have to balance those requests against the costs and how much use people would get out of them. You ask yourself, will this still be used when the novelty wears off,” she said.

The music practise room is, Workday think, something with long-term potential. There are several others in Dublin tech businesses, which gives Workday confidence. These include Dropbox who have a well-equipped music room that looks like a smoky jazz club.

“We’re not going down the route of high-end audio recording equipment, because some of these practice rooms are like little recording studios, but there will be a drum kit and guitars, and we hope that satisfies expectations and will be well used,” Connolly said.

Managing expectations is the key skill in the age of amenity inflation. Each innovation costs floorspace. Workday’s yoga and fitness room was a former storeroom, and although the 250 SF music room will be carved out of unused space on the Church Street entrance, the more substantial 3K SF wellness suite means a loss of workstations.

“We get requests for Wii machines and an extra pool table, that is fairly easy, then there are others like for a workplace swimming pool. We just don’t have anywhere for that. So we have to say very politely its not on our agenda for now.”

“The other common requests are for things we’ve already thought of, but they didn’t look like they’d work, or something people think other people might want but perhaps don’t expect to use themselves, like a bouncy castle. We say no as politely as we can when we have to, but do our best to accommodate requests.”

The difficulty of balancing galloping amenity inflation against a rapidly rising headcount is acute for fast-growing tech firms.

“We’re lucky we can use unused reception space for some amenity development, we don’t have to sacrifice workspace,” Connolly said. “But the wellness centre means losing 24 workstations, and that’s a hard hit to take and really puts pressure on our floorspace in the next 18 months. We still think it’s the right thing to do, and losing the workspaces means it's in a lovely location in the building, but these amenities eat valuable real estate, and nobody is going to thank me if we start to run out of desks and all I can point to is a beautiful music room.”

The mathematics of amenity inflation are stark. Today Workday has 1,014 people working with potentially 1,300 workstations. But with 250 new starters each year, they will run out of floorspace in 18 months. In these circumstances, questions of the right use of floorspace are not academic.

“It’s fortunate that we have the entire building, and that includes tenants who are vacating floorspace soon, yielding another 12,000 SF for us to occupy, which gives us another 18 months expansion. But these are real issues,” Connolly said.

Will amenity inflation peak? “I know it’s never going to stop — people will always have bright ideas for the workplace, some brighter than others, and it's our job to decide which are the most valuable, but we include a proportion of amenity space is the roughly 150 SF we allocate for each member of staff,” Connolly said.

“Things like the wellness suite will last, but there’s a chance other things will be passing fashions. We may have to reinvent our amenity offer in five years’ time. Some things are definitely here to stay, but if all the musicians now pressing for a practise room leave or move on, then we’ll turn the space into something else.”

There is also the question of demographics: today young tech businesses have young staff. But if amenity provision tempts them to stay put then today’s young average staff will gradually turn into older staff. And their amenity needs will be different.

“We have a 5% attrition rate, because we retain our staff. It’s a great place to work, but our average age is 35 — compared to early 20s at Google — and their needs are different,” Connolly said, suggesting the days when pool tables were must-haves will dwindle, to be replaced by demand for facilities for elderly parents or children.

The new Workday Wellness Suite includes a lactation room for nursing mothers, a reflection room for quiet thought and prayer, mood lighting, isolation spaces, and spaces for visiting dentists, doctors and beauticians. It sounds the ideal place to contemplate the next step for Dublin workplace amenity inflation.

Join the conversation by registering for the Dublin Workspace of the Future event on Thursday 21 June by registering here.