Corporate Offices Evolving For Employee Engagement, Amenities

The demands for office are changing both inside and out, particularly in Silicon Valley, which is still known for its sprawling corporate campuses.

Once content to sit in a cubicle and work from 9 to 5, employees are now demanding space that adjusts to their needs, whether it is heads-down time at a desk or spending some time decompressing outdoors. And those making corporate office decisions have to be cognizant of those demands or risk losing employees in a fiercely competitive job market.

Panelists at Bisnow's recent Silicon Valley Office Investment & Development Series at the Hilton Santa Clara discussed these demands as well as the growing attention to the valuable role of mixed-use development and location-based amenities around buildings and the transportation required to get there.

There has been a transition from focusing solely on maximizing efficiency and butts in seats to looking more at effectiveness in the workplace, Gensler principal Kevin Schaeffer said. With that, the workplace started to take shape differently and there is new attention to user experience.

"Really what companies are trying to do is enhance employee engagement," he said. "Employee engagement is a critical thing for every company, especially in these talent wars we're having today."

Employee engagement helps increase profitability and decrease absenteeism, making a positive work experience key to how effective employees are. These days, it is about collaboration, merging work and life and the need to foster interaction.

At Adobe, about half of the workers who will be using the company's offices in five years don't even work at the company yet, said Scott Ekman, the company's senior director for global real estate. That means it is important for the company to be thinking about how the work site creates a community and place where employees feel that they belong. Part of the conversation is about what people need as well as what is keeping them from using the space the way they need, he said.

"We clearly look at the return on investment we're making, but it's really return on experience as well," he said.

With so many generations in the workforce, companies need to recognize a variety of work styles and practices and plan for those. The days of universal plans that employees had to adapt to are behind us. Going forward, the question is how to create highly adaptable work environments that let employees get the most out of them depending on their needs, he said.

For companies that do business here, even those that are willing to pay more for office space, intelligent use of that space is crucial.

There is not a lot of office space in the Bay Area and it is very expensive, so companies have to look for ways to make better use of square footage. If an executive is often traveling, out at meetings or visiting with clients, a dedicated office for that executive is wasted space, 23andMe Facilities Operations Manager Ben Stevenson said.

It makes more sense to have that space be reservation-based or a place for employee engagement.

Schaeffer said the trend is moving toward multifunctional space for that reason. Companies aren't just building cafeterias, but cafeterias that can also be used as a meeting area. Lobby reception areas are being designed and furnished so employees can have casual meetings there.

Stevenson said this attention to more democratic use of space fits the Bay Area well. The area's tech firms and startups don't go in for a C-suite floor in a building. Instead, the CEO is having coffee in the kitchen like everyone else.

Common spaces also are increasingly having to address employees' need to connect with nature.

In the past, there was an idea that you could put plants in a building or set up a green wall and the objective had been achieved, but it is about more than a potted plant. Biophilia is about human comfort, stress reduction, ventilation, lighting, sound and even being able to retreat to an area where an employee is more comfortable working, Schaeffer said.

It becomes important, then, to break down the walls between the indoors and outdoors, Stevenson said. It is about roll-up doors to create a flow to the outdoors and creating connections between naturalistic, calming environments and places to knuckle down to focus on work. It all comes back to having a work environment that appeals to employees.

"We talk about space here, but we have to think more about user experiences," Urban Community co-founder and CEO Gary Dillabough said. "Think about where do people live, how do they get to work, what's their work environment like, how do they get home?"

Often a lot of the focus by investors and developers is on getting return from a space, but the conversation needs to be about creating a better quality of life — creating places people want to live and work, he said. A lot of that has to do with what amenities are provided around the office.

With the Mission Park development in Santa Clara, Washington Holdings is redeveloping a portion of the site around the existing R&D buildings, which it is renovating. The project includes a 175-room hotel as well as 24K SF of retail. BCV Architecture + Interiors designed the retail portion.

"In Silicon Valley, there are not many walkable amenities unless you're in one of the downtown markets," Senior Vice President Casey Holt said. "We wanted to provide those amenities to our R&D base in a much-needed area of Santa Clara that really didn't have those walkable amenities."

The hotel is all about return, nearing double-digit return on costs, which helps Washington Holdings support the retail on-site. Even though the retail brings in less from rents — the goal is to just cover the cost of capital — it is important because it serves as an amenity for tenants, Holt said.

The expectations around a campus also include the transit options and last-mile solutions to get employees to work. Dillabough said a main driver is the combination of great office and residential.

Residential remains a challenge in Silicon Valley where many cities have built far less than workers need, increasing demand on commuting and transit.

"Until we get BART in, everybody coming into this area is coming in on eight lanes of fully impacted traffic," Cushman & Wakefield Vice Chairman Erik Hallgrimson said. "We need to get people in, but also need units for them to live in and they're not getting built."