Building amenities can reinforce your company’s culture and help with employee recruitment and retention. But how do you decide which amenities should be priorities in your next space?

YOUR NEXT OFFICE SPACE: HOW TO PRIORITIZE AMENITIES TO SUPPORT RECRUITING AND RETENTION

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When your company is looking for new office space, there is often a long list of considerations that can grow more complex by the day. Not only are there the primary factors of cost, space, building, locational factors and talent considerations -- each building will also offer a different combination of amenities.

When considering the talent criteria, it’s important to consider which amenities are going to best fit your company’s culture, support recruiting and retention efforts, enhance employee engagement, provide a

boost for office productivity, and make your employees happiest. So the key question is: how can you integrate the right level of amenities throughout your real estate solution to support these goals and objectives? As your company establishes both qualitative and quantifiable criteria for your next office space, it is important to understand the possibilities, and what similar companies are doing in your industry. So what are the current trends for amenities in the commercial real estate (CRE) market? Let’s take a look…

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COSTS

$LOCATIONAL FACTORS TALENTSPACE OR BUILDING

Visibility of Image/Brand

Site Infrastructure

Convenience and Safety

Parking

Workplace Environment

Owned versus Leased

Flexibility and Scalability

Efficiency of Floor Plates

Amenities Within/Nearby

Employee Engagement

Employee Recruitment

Employee RetentionGovernment Incentives

CapEx, Revenue Costs

Implementation Costs

OpEx Run Rate

MAIN CRITERIA

AMENITIES OBJECTIVES

QUANTIFIABLE CRITERIA

SUPPORT BUSINESS OPERATIONS, WORKPLACE FUNCTIONALITY AND ENHANCE SERVICE IMAGE AND BRAND

Harvard Business Review

WHAT DIFFERENTIATES GREAT WORKPLACES IS

NOT THE NUMBER OF EXTRAVAGANT PERKS.

IT’S THE EXTENT TO WHICH THEY SATISFY THEIR

EMPLOYEES’ EMOTIONAL NEEDS AND DEVELOP

WORKING CONDITIONS THAT HELP PEOPLE

PRODUCE THEIR BEST WORK.

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TREND REPORT: CRE AMENITIES

Live, Work, Play – It’s All About Convenience

This popular phrase has been tossed around the CRE industry quite a lot lately. The idea is that as technology advances have allowed us to begin working from anywhere, companies are wrestling with how to address the multiple generations within the workforce, and millennials in the workforce are shaping a more fluid idea of work-life balance. Building owners are responding by integrating leisure and convenience amenities into their real estate offerings.

The live-work-play trend is patterned after a hospitality approach to CRE. It considers the daily tasks and pleasures that are outside of our work life, and strives to bring them into close proximity to the office.

- Cafes, restaurants and bars - A walkable environment - Entertainment - Banking - Fitness - Retail options - Spa and hair salon - Dry cleaning - Pharmacy - Car wash - Shoe shine and repair

The result is centralized locations where workers can accomplish personal errands like dry cleaning and picking up a prescription over lunch, head to a nearby café for an off-site meeting with colleagues, and hit the gym after work – all with relative ease and convenience. It saves time and makes these day-to-day tasks easier to accomplish, leading to happier and more productive employees.

THE LIVE-WORK-PLAY

TREND IS PATTERNED

AFTER A HOSPITALITY

APPROACH TO CRE

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Technology is the Key to a Flexible Workplace

Current workplace trends are expanding on the “work from home” approach to flexibility by offering a variety of work settings within the workplace itself. By offering people options for where and how to do their work, companies can meet the needs of different work styles and provide settings for focusing on different types of work.

This approach may include spaces for individual work, such as offices or cubicles, as well as more open meeting areas for small collaborative sessions, meeting rooms for more formal gatherings, and lounge type social areas for impromptu meet-ups.

The flexible workplace requires several different kinds of spaces within the office layout and design, which can be created in many different tenant settings, but more importantly it requires a robust technology infrastructure to enable a work-from-anywhere culture to take root.

This technology infrastructure must include fast, reliable connectivity to ensure consistent coverage throughout the building. Additional building amenities that will contribute to a technology-friendly office include:

- Plug and play collaboration technology in all meeting areas

- Video conferencing capabilities (desktop and collaboration areas)

- Fast, reliable elevators - Efficient security and turnstile procedures - A car charging station/port - Environmental media for a visitor experience

To build on these amenities, companies may also consider technology elements such as seamless document sharing and management; Voice Over IP follow-me phones; and a consistent set-up in every space and location.

A CORNELL UNIVERSITY STUDY OF 320

SMALL BUSINESSES SHOWED THAT

COMPANIES THAT GRANT EMPLOYEES

CHOICE IN HOW TO DO THEIR WORK

GREW AT FOUR TIMES THE RATE AND

HAD ONE-THIRD THE TURNOVER VS.

CONTROL-ORIENTED FIRMS.

Gensler: What Factors Drive Workplace Performance?

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Healthy & Happy: The Importance of the Natural Environment and Wellness AmenitiesThe positive affects of natural light are well known and documented. Consulting firm Arcadis notes in its 2016 Trends in the Workplace report that “exposure to greenery and sunlight yields a 15% increase in well-being and creativity and a 6% increase in productivity.” Human beings evolved in natural settings, and our bodies require ample light, fresh air and access to outdoor space to regulate our hormones and stress reactions, and maintain a feeling of contentment.

While the convenience and technology amenities that we mentioned above can contribute significantly to a positive and productive work environment, nothing is as basic a human need as light and air.

CRE that provides ample natural light and healthy indoor air quality are common and should be expected as a minimum for most tenants, however there is a growing trend to provide more extensive access to the natural environment. Amenities to look for that will support your employee’s healthy bodies and minds can include:

- Patio - Walking paths - Secure, weather-protected bicycle locking facilities - Easy-access showers - Exercise facility - Sound control

World Green Building Council: “Wellbeing and Productivity in Offices”

A 2011 ULI STUDY FOUND

THAT AMENITIES (RETAIL, FOOD, GYMS,

ENTERTAINMENT) RANK FOURTH ON LIST OF

LOCATION DECISION MAKING PRIORITIES.

IN THE SAME STUDY 95% OF ONE

SURVEY RESPONDENTS WILL PAY MORE TO

BE NEAR RECREATIONAL OPEN SPACE.

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Get Creative! Uncommon Amenities that Reflect Your Company CultureWhile technology infrastructure and convenience amenities are commonly considered as part of the CRE search process, there may be other more unique amenities that companies can create in partnership with the building owner and/or other local businesses. For inspiration, consider a few of the amenities that Incentive Magazine highlighted in the article, “The Power of Perks”:

These more personalized amenities can be particularly powerful for recruiting and company branding. Key factors when considering more creative amenity offerings should include how they will support the business’ existing culture, what kind of value they will hold for employees, and how the benefits compare with the resources required to provide that particular amenity.

SEATTLE SOFTWARE FIRM WRQ

OFFERS DOCK SPACE TO

KAYAKING COMMUTERS

EMPLOYEES OF FINANCIAL

SERVICES ROBERT W. BAIRD ARE

GIVEN MEMBERSHIP DISCOUNTS

TO THE LOCAL ART MUSEUM

PRODUCTION WORKERS AT

WORTHINGTON INDUSTRIES ENJOY

$2 HAIRCUTS ON COMPANY TIME

STEP 7

MAKE TWO LISTS

STEP 6

AMENITIES MATRIX

STEP 5

BENCHMARKING

STEP 4

UTILIZATION STUDY

STEP 3

EMPLOYEE DEMOGRAPHICS

STEP 2

WORKPLACE SURVEY

STEP 1

INTERVIEW YOUR LEADERS

Tip: Don’t focus on up front costs.Go through this process to understand and identify what kind of space will best serve your business – without any restrictions. Once the ideal program has been identified, cost can be applied to understand its impact on the field of options.

CHECKLIST TOOL

Weighing the CRE Options: Which Amenities Will Deliver ROI for Your Business’ Recruiting and Retention Goals?

The key to identifying which amenities will deliver the most value in terms of employee recruiting and retention throughout your tenancy is to know thyself, as the ancient Greek saying goes. Understanding and acknowledging where your business is today – in terms of the demographics of its employees, their needs and wants, its operational processes, and leadership style – is the baseline for defining your very individualized wish list of amenities. This should then be considered in the context of the company’s desired future culture and identity (if this is different from its current state).

THE MOST EFFECTIVE OFFICE ENVIRONMENTS ARE

THOSE WHICH FOCUS ON THE SPACES WITH THE

GREATEST MEANING TO THE ORGANIZATION’S CULTURE

AND SPECIFIC EMPLOYEE GROUP.

Gensler: “Designated Drivers: Design Guides Corporate Real Estate”

Is this starting to sound a bit complex? Unfortunately, this part of the process can be exactly that. The integration of these amenities, location factors, space/building considerations and supporting talent, requires comprehensive due diligence and a measured approach to provide the most viable real estate solutions for consideration.

Which is why we’ve created this tool to help you through this process. While it can’t replace the personalized insight that can be gained from working one-on-one with a tenant advisor and consultant, it can offer a starting point for the considerations and steps that should be taken to assess and prioritize amenities as part of the CRE selection process.

Imagine our company as a person. Describe that person in as much detail as possible. (This line of questioning may feel a bit uncomfortable or silly to some, but it can be a very effective way to get valuable information about a company’s identity and culture.)

Is our company:• Driven and motivated?

• Creative and flexible?

• What are his/her values? Socially conscious? Political?

• What kinds of activities does he/she enjoy?

Goals:

F Confirm (or clarify) your company’s existing identity and culture from a leadership perspective

F Clarify leadership’s vision for the company’s future culture and identity

F Determine what aspects of the current culture leaders want to reinforce

F If the desired future culture and the current culture are not aligned, these interviews can begin the discussion about what kind of future identity and culture the leadership would like to create.

Sample Leadership Interview Questions:• What are the “big picture” business goals for the next

5-10 years?

• What are the fundamental things we value as a company?

• How does an employee get promoted within our company?

• What would get an employee fired from our company?

• What works well with our current culture? What is not working well?

• What do we want the company culture to be in the future? Are we there yet?

• What is our brand as an employer? How do we market our company to potential employees?

• How do our employees accomplish their work? What resources are critical to supporting their work? What types of spaces are needed to effectively do that work?

• What is the experience that we want our employees to have?

• What amenities would make employee’s lives easier on a daily basis?

• Who do we want to recruit? Describe an ideal employee.What do they want and need?

• What is our current company culture?

INTERVIEW YOUR LEADERSSTEP

1

Goals:

F Get employee’s perspective: What is the current company culture and identity?

F Understand what about the current culture and identity works well for employees, and what is not working well. This will likely differ across demographics, pay grades, job roles, etc. The key is to identify and understand those differences, as well as the similarities across groups.

F Determine which amenities are valued by employees, and which are less important.

F Convey that the company values employees’ and wants their input as part of the office space selection process.

Sample Employee Survey QuestionsA survey format will enable you to survey many employees quickly and easily using an electronic form. Questions should be simple, direct and focused on a single topic with limited open responses. Many of these questions mirror those in leadership and employee discussions in previous steps. Sample question may focus on understanding (or confirming):

• Aspects of company culture?

• Tools or resources critical to accomplishing work on a daily basis?

• Types of office spaces needed to get work done on a daily or weekly basis?

• Employee priorities outside of work? (While the below suggestions are certainly all important, people at different life stages and in different demographics will prioritize these elements differently)

- Family - Friends - Social life - Home life - Career growth - Stability - Convenience - High End Services

• Office amenities that would make employee lives easier on a daily basis?

- Nearby food and drink options - Haircuts - Access to outdoor environment - Banking - Dry cleaning - Pharmacy - Shopping - Car wash - Nearby child care facility - Fitness center - Close to the highway - Parking - Accessible to public transportation

Tip: Measure, record, and adjust. Use employee surveys to understand how the current amenities are working, whether employees value them, and how they are supporting (or detracting from) your culture goals. Conducted on a regular basis – at least once per year – surveys can continually assess what is working and what is not working.

STEP

2CONDUCT AN EMPLOYEE WORKPLACE SURVEY

When the employee surveys are complete, the results should be compiled into a summary report to help identify trends and key findings. From these results, you can identify:• What are your company’s current employee demographics?

• What are the priorities for those demographics?

• What are the demographics for employees that you would like to attract and retain in the future? What are the priorities for those demographics?

This step will likely require the support of a real estate advisor or consultant.Utilization studies are designed to gather space use information using either a manual data collection method (people walking the space), recording utilization via mobile devices, or using heat and motion detecting sensors.

The studies provide unbiased quantitative data about how often individual spaces or amenities are actually used, which often differs from employee’s perceptions of how important those spaces or amenities are.

A utilization study is conducted along with workplace surveys, staff interviews and focus groups to develop an accurate and comprehensive understanding of staff mobility and collaboration levels – which will help inform the space program - as well as the extent of change management needed based on the differences in space use perception as compared to actual use.

IDENTIFY YOUR COMPANY’S EMPLOYEE DEMOGRAPHICS

Now we get into external research – looking beyond your company to other influences.• Clients or Customers. What office amenities may be important to your clients or customers? An informal (or a

more formal) survey may help you learn whether your current office location is convenient for clients, whether they are impressed or frustrated by the building security desk, and what they like and dislike about coming to your offices.

• Competitors. What kinds of office amenities do your competitors have? Are those things that you want for your next office space?

• Industry. What trends or challenges may affect your industry in the next 3-5 years? How might they change how you do business?

CONDUCT A UTILIZATION STUDY

BENCHMARKING

STEP

3

STEP

4

STEP

5

CREATE AN OFFICE AMENITIES MATRIX

We have provided a sample template below for you to try. To use this template:• Create a comprehensive list of potential amenities for your company’s next office move based on

the information gathered from the previous steps

• Assess each amenity’s potential impact. To do this, consider the number (or percent) of employees who would be affected by that amenity. Rate each amenity on a scale of 1-10.

• Assess each amenity’s benefit: Identify the size of the benefit it would provide to staff (significant benefit versus minimal benefit). Rate each amenity on a scale of 1-10.

• Assess each amenity’s resource requirement (how easy or difficult will it be to provide?). Consider cost, resources, market availability, risk/liability, etc. This step may be easier with the input of a real estate broker, who can provide insight into the market availability and cost of some amenities. Rank each amenity on a scale from 1-10 for resources required to execute.

• Plot the amenities on the following bubble chart.

10

ResourceRequired

Benefit

% o

f Peo

ple

Affe

cted

10

0

05

• Prioritize. Identify the amenities that:

- Have a significant benefit AND affect a large number of people (top right quadrant) - Have a significant benefit AND require minimal resources, even if they only affect a small number of people (small circles in the top half)

- Have a mid-level benefit AND affect a large number of people AND have a small-to-medium resource requirement (small-to-medium circles in the middle of the right side)

• Assess available resources. For those select amenities, your company can then make assessments about whether the resources required to make them happen are possible, and worth it.

STEP

6

Tip: Using Excel to create a bubble chartA bubble chart is a variation of a scatter chart in which the data points are replaced with bubbles, and an additional dimension of the data is represented in the size of the bubbles. In addition to the x values and y values that are plotted in a scatter chart, a bubble chart plots x values, y values, and z (size) values. For more information on how to create a bubble chart in Excel, click here.

“Need to Have Amenities” and “Like to Have Amenities”Based on the information you have gathered from all of the steps before now, and the prioritization that you did using the bubble diagram above, you can now identify the amenities that are must-haves for your next office space. These are amenities that support your current and/or future company identity and culture, that are important and valuable to your ideal employees, and are within your capabilities to secure.

Just like when you’re looking for a new home, the “like to have” list is one that will offer appealing benefits to your company and employees, but are non-essential.

Identifying your company’s priorities for office space amenities can require some soul-searching and challenging self-assessment. However, this process and the information that comes out of it can help inform future business plans and strategic goals as well. Your company is also well-prepared now to continue working with a broker, architect, and other consultants to assemble an office space program and begin looking at available real estate for consideration.

Interested in connecting with a Cresa tenant representative for more in-depth, personalized insight and guidance?

Tip: Be flexible. Just because you went through this process doesn’t mean you’ll hit the nail on the head right away. Your business needs may also change over time. Landlords and buildings that offer a degree of flexibility over time can be highly valuable.

Learn More Cresa Consulting GroupRick Ybarra703.568.6390 | rybarra@cresa.com

Jeff Gagnon415.394.1027 | jgagnon@cresa.com

Reza Ahmadi , Ph.D.415.699.7250 | rahmadi@cresa.com

MAKE TWO LISTSSTEP

7