Trends in the Corporate Sector - Feburary 2012

By Jessica Chevalier

Over the last decade, many corporations have come to realize the advantages of a well-designed workplace. The recession stoked this trend, as businesses were forced to self-analyze and consider what benefits their environment offered to current and potential employees and also what image their space projected to the client. In a market where jobs are fewer and farther between, a corporation with a well-designed space that communicates its brand image is at an advantage in winning work and talent.

Says Shannon Gaffney, principal at Seattle based SkB Architects along with Kyle Gaffney, “People have gotten savvier about what a workplace can do for them in terms of recruitment, retention, employee pride and the psychological affects of the workplace on the bottom line. It was a hard sell 15 years ago, but now clients come to us with an understanding of that.” In fact, at SkB their favorite clients are those that are passionate about the possibilities that a new environment can create for their business.

This realization has had a significant impact on design and the way that flooring is used in a corporate space. It affects what flooring materials are chosen, how many materials are chosen, how these materials are installed and even what is expected of the materials. The designers with whom we spoke note that the trend toward open floor plans, which has progressed hand-in-hand with corporations’ attention to creating a healthy, collaborative environment, often relies heavily on flooring to define spaces.

David Meckley, a principal at Huntsman Architectural Group in San Francisco, believes that both of these developments were influenced by the fact that workplaces are increasingly more mobile. “This recession made people look at utilization of space, consider uses, consider reduction; mobility took a much bigger role. Giving staff the opportunity to be more mobile gave them another feature to use to attract talent. The main reason that people are coming into the office today is to work with others.” An attractive office pulls employees in.

Primo Orpilla, co-founder of San Francisco’s Studio O+A, reminds his clients that the single greatest asset of a company is its people. “Due to the recession,” he adds, “a lot of us are now working with smaller teams. You want your people to feel valued.”

Though it’s impossible to nail down numbers, happy employees are productive employees, and productive employees add to a company’s bottom line; so investment in a corporate space is not only a moneymaker because it attracts business but also because it yields productivity.

All of this is great news, since each of the designers we interviewed report that business has picked up significantly for their firms. The Gaffneys’ firm had to lay off six of its 22 employees in early 2009 but was able to hire them back later that same year and has experienced steady growth since then. Mark Hirons, a principal at Cannon Design in Chicago, says that activity has been up at his firm for the last six months, especially with repeat clients, and he notes that there are certainly more RFPs (requests for proposals) coming in lately. In San Francisco, Meckley’s firm is adding staff and is officially in growth mode; the company’s New York office is also seeing increased activity. And Orpilla reports that “things are definitely heating up in the Bay Area and have been for the last year.” Each of these firms works nationally as well—and some internationally—so good indicators from these firms means positive movement across the country.

Of course, there will be a sweet spot when good deals on space are still to be had, and the brokers of America aren’t quite confident enough to raise lease rates yet. Corporations that are willing to make a move during that time—and that time may well be right now—will bring a wave of work as they remodel these new spaces.

WHAT DESIGNERS ARE CHOOSING
While corporations might be eager to create a fresh, inspiring office space, many aren’t willing to spend to excess as they once were. Says Hirons, “The economy has brought more attention to cost, but clients aren’t totally driven by the bottom line. They want smarter solutions. Clients are willing to spend more on the right things, flooring being one of them, as it is a long-term addition to the space.”

Still, even the price that clients are willing to spend to get the “right thing” isn’t what it once was. While it wasn’t uncommon for a corporation to pay $40 to $50 per square yard for carpet before the recession, today clients are more inclined to stay in the high $20s to $30s range, though they aren’t willing to give on aesthetics or quality. They want the same benefits for less money.

Luckily, manufacturers got the cue and have been innovating to meet these new requirements. “I hope that there are long-term implications resulting from this recession,” says Shannon. “It forced a lot of manufacturers to create better productions, better constructed and more affordable. They have brought down the cost but maintained the look and feel.”

Today’s corporate clients are also seeking flooring products that emanate authenticity. Orpilla explains, “Clients are looking for a simple, more residential feel for comfort in the office. We like to use raw materials that don’t look overtly expensive but more utilitarian, something more sustainable and approachable. We like flooring that is down to earth, even quiet sometimes.”

Kyle and Shannon agree, noting that they are always looking for great, complex neutrals. Says Kyle, “Carpet and flooring with honest, textural, sophisticated residential qualities is popular. These can really set the tone. After the collapse, clients began clamoring for authenticity and honesty in their work environments. If you put two materials in front of the client, one authentic and one synthetic, nine out of ten will choose the authentic material.”

But clients don’t want a monochromatic result either. “There is a balance between neutral space and those areas with energy. People are thirsty for energy. Corporations want to engage people while they are at work,” Hirons says. Utilizing color or pattern, designers create intentional wow areas where they want people to gather. In fact, much of the office today is about we-space rather than me-space, and designers use design to pull people into these we-spaces.

Regarding maintenance and performance, Shannon believes these qualities should already be “baked into” products being sold for commercial applications. “If it’s in the commercial arena, it should be pre-qualified,” she says. Many of the designers with whom we spoke expressed the same sentiment about safety. If a product is commercially approved, it should be inherently slip- and trip-resistant.

Most of all, designers just want choice. The Gaffneys explain that when carpet tile first caught on, geometrics and florals were the easiest ways to create pattern, so these looks flooded the market. In the last five years, geometrics and florals were traded in for linear looks. In fact, Shannon reports that her clients sometimes say, “‘Boy, you guys must really like stripes.’ But that’s the bulk of what’s offered, almost everything is stripy and linear.” The Gaffneys would love to see some lighter commercial carpets—either actual lightness or lightness created through luminescence. Bold colored accents may be current trend, but the Gaffneys don’t want manufacturers to take their eye off the goal of creating really good neutrals. “We only use bold colors in limited ways, to create an emotion or a juxtaposition. We use them very sparingly. But an honest, textural neutral floor can really set a tone.”

More than one designer noted that workplace design is being influenced by residential design—a virtually unheard of trend, since commercial design in usually the driver. It’s not that offices are going to look like family rooms, mind you, but that they might borrow the comforts of home through coloring and styling—softer lines; thinner furniture rather than big, heavy power pieces; warmer tones; authentic materials. In fact, Orpilla reports that he’d like the reps that visit his office to show the full breadth of their offerings, their commercial and residential products, so that he can pull materials from each.

“Technology has changed the workplace significantly. Design has to respond to this. We are always on top of how technology affects us emotionally,” says Kyle. And mobile technology allows an employee the option to curl up on a cozy leather sofa in a common area—as they might in their own living room—rather than stay cemented to their desk and Aeron chair. Kyle continues, “People want an organic, fluid space, not rigid design. Gathering space. A richer offering of settings.”

“People are thirsty for energy,” adds Hirons. “You have to engage people while they are at work. Mobility has made it so they can work from anywhere. You have to ask yourself, what is the incentive for employees to want to be in the office?”

HOW FLOORING IS USED IN AN OPEN FLOOR PLAN
Open floor plans aren’t just for generation Y tech companies anymore. Today, even law firms are utilizing an open floor plan. Cumulatively, the designers with whom we spoke estimated that 90% to 99% of their corporate design work utilizes an open floor plan, and in these jobs flooring plays an important role. Orpilla explains, “When we do open plans, we can only define space a few ways: design a corridor, drop the ceiling height or use flooring.” In these cases, designers often use many materials to keep a space fresh.

In fact, on one of Meckley’s current projects, 34 different carpet styles are being used. Meckley will sometimes swap out a portion of carpet tile on a floor to create an area rug look, mix five different carpet tiles on a floor to create a customized look, or use the same tile in four different colorways. Meckley would like to be able to mix carpet tile and resilient to create a wholly different aesthetic, but manufacturers haven’t yet made that a viable possibility.

Meckley explains that when his firm comes into a project, there is generally only a ceiling and a floor, so they begin to look at how they will divide the space into zones, where they will transition from one surface to another and how they will use the budget to tell the brand story. “Flooring is one of the least expensive ways to articulate a space,” he says. “You are going to put something down, after all. We use the floor to tell the client’s story. The ceiling is tougher, even though it is more visible. There is a lot more variety, fluidity and flexibility in flooring.”

Orpilla explains that, in an open floor plan, it is a bad choice, for example, to use the same carpet through the offices and lunchroom. To start, the flooring in work and relaxation space should differ, since you want those using the relaxation spaces to be able to make a break from work mode and have a restful reprieve. In addition, people don’t feel at ease eating over a soft surface, since they worry about spills and clean up. Lunchroom facilities should feature a more cleanable flooring surface. It’s a study in psychology, really, understanding how employees will instinctively respond to a setting, without even being aware that they are doing so.

Orpilla uses many different flooring products within corporate designs including sheet vinyl, porcelain and ceramic tile, raw or polished concrete, carpet tile, broadloom, hardwood and engineered wood. He makes certain that each of his designs look unique and customized, “We will put cut pile next to loop to change it up,” he says. “We never want it to look like all our flooring was ordered from one catalog.”

SUSTAINABILITY
The designers with whom we spoke weren’t especially eager to discuss sustainability, since more than one of them stated that sustainability should be the status quo in design now, not something that even warrants conversation. The fact that sustainability is becoming less a subject of discussion and more a standard practice is, of course, good news.

Many corporate clients have sustainability as a tenet of their practice, so designers must make materials choices that reflect those values. With regard to flooring, this is generally an easy task. As a whole, the designers agreed that there is a wide selection of flooring with a good green story and note that the flooring industry is better than any other building materials industry in that regard.

Meckley notes that some clients and designers choose materials that have the appearance of being sustainable or less costly, even though they aren’t. Though this is unfortunate, it certainly speaks to the power of sustainability in the commercial environment.

All the designers with whom we spoke report that they do a significant number of sustainable and LEED certified jobs. In fact, in 2010 Hirons’ firm did 25% of Illinois’ LEED registered projects, and their own office, currently in the middle of a remodel, is pursuing LEED platinum certification. Says Hirons, “The flooring industry has understood that there is a significant interest in sustainability, and it helps designers meet their environmental goals.

Kyle adds that the flooring industry “did a really good job of making amends for its past environmental indiscretions.”

The difficult economy may actually have helped sustainability’s cause. “People want to make sure they are building something that will last,” says Orpilla. Since sustainable flooring products are often competitive price-wise with their conventional counterparts, clients often gravitate toward these as long as they meet their aesthetic and performance goals.

Of course, sometimes the true green story is hard to deduce amid the greenwash. Hirons suggests that flooring manufacturers make their claims clearer and more consistent from product to product and manufacturer to manufacturer. And Meckley reports that he is anxious to see hard surface products become more sustainable, since he runs into limitations in that field on some jobs.

WHERE IS THE ACTIVITY?
In Orpilla’s area of the country, companies that focus on innovative technologies, which are prevalent on the West Coast, are especially committed to keeping a fresh look, since they have to have an environment that reflects their cutting edge approach. In many cases, the lifecycle of those companies is compressed—they find raging success or fail before traditional companies may even have had their feet firmly planted—so the lifecycle of their brand image is compressed as well. Orpilla offered the example of one customer who contacted Studio O+A about a remodel, looking for a fresh break from the image that it established in 2008.

For the Gaffneys, the bulk of their work over the last two years has been in four different arenas: creative companies like digital ad agencies and industrial design firms; big commercial companies like Microsoft and Phillips; technology developers; and law firms. In many cases, they have been engaged to rethink these companies’ images from the ground up. Interestingly, the Gaffneys did just that with SkB when the recession hit, redefining how they deliver to the client during the design and development processes, expediting their time frames, and diversifying their portfolio to encompass more sectors. SkB designs for single-family residential, hospitality, healthcare, commercial building and retail, among others, and it notes that there is increasing crossover in design between the sectors.

For Meckley’s firm, activity is pretty evenly split between professional services clients (agencies that bill for their time like law firms and ad agencies) and tenant improvement (design of spaces to be leased). Since some of the largest industries in the Bay area—particularly technology and healthcare—are in growth mode, Meckley anticipates that this positive trend will continue for quite some time.

For Cannon Design, professional services has been consistent and the workplace side of the business (agencies that sell products or services) has been moderate, as some large corporations with whom he works are focused on establishing and rolling out standards throughout their facilities nationally.

All the designers with whom we spoke reported customers are by and large choosing to remodel instead of build. This is not necessarily a cheaper option, however; the complexity of remodeling a facility that is not aligned for the client’s purposes often means that the remodel is more expensive than a new build, especially because many of today’s corporations aren’t interested in band-aid solutions that will cost them more in the long run.