Trends in Corporate: Can design pull employees back to the office? – Jan 2024
By Jessica Chevalier
For decades, the corporate office was a given for America’s workers, a requirement of business life. Even as the workplace evolved, influenced by the tech sector’s focus on open space and collaboration, it remained an unquestioned have-to within corporate life. All that changed, of course, with the pandemic, when America’s office workers proved that they didn’t need to be within corporate walls for 40 hours a week to get their jobs done. This radically altered the office’s role, as the space itself must now make an argument for its own existence, utilizing design to compel workers in and keep them coming back.
THE BEST OF ALL WORLDS
In many ways, this argument begins with the floor, setting the stage for a space that attracts and supports the team toiling atop it. Manufacturers with whom we spoke for this piece report that the key in office design today isn’t following one trend or another to the T but instead pulling bits and pieces from many trends to satisfy in a way that best suits the worker. This pertains to both workplace setups and design trends.
In other words, today’s corporate office space isn’t as all-or-nothing as it has been: open space or cube cities, closed door suites or unassigned hot desking. Instead, a design may incorporate zones of collaboration in one area and for heads-down work in another, thereby offering choice to the workers within the space.
Stylistically, the story is similar. A corporate workplace may integrate a biophilic fractal pattern on the flooring with a resimercial-influenced cushy sofa atop. Cindy Kaufman, vice president of marketing for Mannington Commercial, explains that design of the contemporary office is about “cherry-picking the best concepts and putting them together in a way that hasn’t been done before.”
In part, this is because these concepts are no longer emerging but rather are now the standards for operation. After all, why not incorporate elements of biophilia, which are proven to reduce workplace stress? Why not create an office that is as comfortable as it is functional? Biophilic and resimercial design aren’t so much trends as they are better ways of getting the job done, and they are here to stay.
In this effort, LVT and carpet tile continue to be leading materials for corporate specification-nothing new there-with ceramic, hardwood, broadloom, area rugs, concrete and even rubber making appearances, but the key is how these materials are being mixed within the corporate workplace.
“For focus spaces-environments like phone booths or single- or two-person drop-down spaces-we want to ensure less visual noise in the space through flooring,” says Derrell Jackson, Tarkett’s segment director for workplace, as well as less acoustic distraction. For a space like this, Jackson suggests soft surface in muted or natural tones would make a good choice. But for a create space built to host four to five workers who may be grouped around a screen or whiteboard, he’d suggest a more colorful or patterned LVT, paired with a drop-ceiling over the semi-enclosed space to create a sense of intimacy and balance acoustics.
Explains Omoleye Simmons, Tarkett’s vice president of product design, “Our work environments continue to be redesigned to be more welcoming to flexible work styles, helping the office feel like a destination, not an obligation. Elements like textural area rugs, color with purpose and overall warmth continue to be residential-inspired concepts to create comfort. As the benefits of biophilic design become more amplified, the need persists to connect nature to these spaces to support employee wellness, incorporating tactile elements that add function and combine flexible spaces with the wellbeing offered in biophilic design.”
In that effort, Chelsie St. James, Patcraft’s marketing director for A&D, corporate, multifamily and retail, notes a shift toward warmer colors that “provide a sense of comfort, incorporating natural elements and softer textures and finishes.”
“We continue to see [resimercial] capture the lion’s share of the market,” says Brian Ostrow, vice president of sales for Bentley. “We’ve seen an increase in the premium corporate space, premium finishes-including premium flooring selections and wool area rugs-to entice employees back to the office.” Ostrow also notes a resurgence in the use of broadloom within the corporate space.
“Generally, there is an understanding that people who grew accustomed to the comfort and flexibility of working from home don’t want to return to an office that feels cold and sterile-whether that’s five days a week or twice a week, so everything that informs the look, feel and functionality of a space is up for consideration,” explains Karndean’s Samantha Lisi, vice president of commercial sales. “From a flooring perspective, [resimercial design] can translate to more thoughtful uses of color in creating these spaces.”
In 2019, prior to the pandemic, the corporate sector accounted for 29% of commercial flooring sales or $1.8 billion. In 2023, corporate accounted for 24% of commercial flooring sales or $1.7 billion. So, while the overall commercial market was growing in those four years, the corporate sector was shrinking, as corporations both ceded their physical spaces and reduced their square footage.
MIX & MATCH
In addition to corporate floorscapes featuring a collection of different materials and styles, interviewees note a mix of high end and low end being used, not necessarily to denote hierarchy, as they may have in the past, but as splurges in particular zones to offer a sense of luxury and paired with workhorse materials, as needed, in areas that get higher foot traffic.
This trend goes hand in hand with the fact that corporations have, in some cases, cut back on square footage with fewer employees in the office daily. With less square footage to cover, some have invested in better quality products for particular zones. These splurges may be hardwood in a lobby zone or a wool rug under a seating area. “We’re seeing a broader range of budgets with a focus on ways to incorporate varying price levels throughout a project,” says St. James. “There is a desire for durable and high-performing products for longevity and ease of maintenance.” In response to this, several manufacturers-Patcraft included-offer collections tiered by price.
Kaufman has also noted this dynamic. “If you are spending less of your resources on mortgage or rent, you can put more into finishes and interiors,” she says. “To some degree, that is happening, mostly with well-capitalized brands that are owner-occupied. The trend is hard surface with area rugs on top, driven by residential and hospitality aesthetics. You can always do carpet tile or broadloom rugs, but many are purchased as area rugs (wool and hand-tufted) for lobbies and conference spaces where an elevated aesthetic is desired. This is beautiful because it allows the blending of high and low levels. You can spend more on this finish if you spend a little less over here. The blending of high-low has allowed companies to bring in very elevated materials as a part of a bigger picture.”
Mohawk Group’s Mike Gallman, president, cites a number of factors that are influencing flooring budgets. “While inflation has increased flooring budgets over the past few years, design choices have also had an impact,” says Gallman. “Companies use flooring for wayfinding, as well as defining spaces within a workplace. Relaxation areas will look and feel different from collaboration spaces, which will look and feel different from workspaces. The design concept drives the material decisions, which often incorporate better floor finishes.”
Layering, another trend pulled from the residential market, is a feature that signals a zone of comfort and builds texture. “We are seeing demand for quality and that includes a mix of surfaces, hard and soft, and layering of elements with texture and pattern,” says Shannon Crider Langley, director of workplace, Shaw Contract. “The desire for a space to tell a story through design and quality products, including flooring, helps to better connect with those using the office.”
Above all, flooring and other finishes are specified with the goal of creating a space where employees want to be-utilizing the carrot, rather than stick, approach, as Jackson puts it, adding, “Return-to-office mandates are the stick mentality.” Making spaces more aesthetically appealing-often in combination with other amenities-is an attempt to bring employees in of their own volition. This doesn’t mean “super fancy,” Jackson explains, but it does mean listening to employees’ wants and working from there. And, in some cases, it may also lean toward “perks,” such as healthy lunch options, childcare or yoga classes.
In late November, a New York Times article asked, “Can Instagrammable Office Design Lure Young Workers Back?” This piece highlighted Magic Spoon’s newly designed New York headquarters, which features finishes in the Day-Glo tones of kids’ breakfast cereal.
Sure enough, workers may view the space as Instagram-worthy their first shift or two, but does that translate to long-term retention?
A host of comments on the article indicated that many readers felt that answer to be no, noting that no amount of style will appease workers who have seen their benefits cut and pay rates stagnate over the last decades, with one commenter writing, “Improve salaries, healthcare, and replace the 401K/403B nonsense with a guaranteed pension. Then you may be getting people back in their offices.”
2024 OUTLOOK
“2023 was a tough year for the corporate sector as companies struggled to right-size staffing levels with market forecasts,” says Gallman. “Layoffs, coupled with hybrid work policies, will continue to put pressure on real estate in 2024. If inflation continues to decrease and employment remains healthy, the back half of 2024 could see some improvement.” In spite of the challenges the sector has faced, it is the largest segment in the commercial market,
Kaufman reveals that the outlook for corporate sector business in 2024 changed a bit as 2023 progressed. “Six months ago, we were more bullish on what 2024 was going to look like; now, we have more of a cautious optimism,” she explains. “It’s an election year. There’s so much global uncertainty. I’ve heard a lot about 2025 being the year that corporate returns, with 2024 more of a slow burn.”
Kaufman’s assessment is supported by what the corporate market saw in late 2023. According to global commercial real estate services and investment firm CBRE, Q3 had a vacancy spike of 21%, a little higher than normal, reports Jackson. However, Jackson also notes that employee headcounts are up 6.2% from the close of 2019. This disparity can, of course, be explained by the pandemic-generated phenomenon of remote work. Jackson reports that remote employees account for a little less than 20% of the corporate workforce.
Ostrow believes that 2024 may skew more positive, noting that it “should be very active, seeing a steep increase in activity” due to “pent-up, post-pandemic demand, as well as attracting people back to the office.”
Karndean’s Lisi believes that 2024 activity is more likely to be “renovation of existing space, which might include converting office space for new uses,” noting that with “so much vacant office space because of the shift to remote work, there’s simply less demand for new construction.”
Langley points out that slow activity may not just be due to low demand. “With tighter lending, the workplace sector will still be challenged in 2024,” she notes.
With footprints going smaller, there is extra square footage in the market, and, therefore, renovation projects are expected to outnumber new construction projects.
That being said, not all corporations are cutting back on space. In fact, Ostrow has seen some expanding their square footage.
Culture is an aspect of corporate life that is intimately tied to the in-office experience.
“Workplace designers are increasingly leveraging the role that design plays in building corporate culture, as it can impact how employees collaborate and engage with their work,” says Kelly Simcox, Interface’s head of global design. “We’re seeing more open floor plans in office spaces to prompt a collaborative working environment while still maintaining dedicated areas for focused work. Flexible workstations and multipurpose areas are also gaining in popularity to accommodate various working styles. Design can also be used as a tool to express a company’s brand values.”
Another important aspect of the in-person experience is mentoring. Welch notes that Gen Z is eager to be in the office to have access to tenured associates who will mentor them in their careers.
RETURN ON COMMUNTE
“People are demanding a return on their commute-a reason to go into the office,” says Kaufman. “Employees want to be back, but for the right reasons-not to be watched or clocked but to exchange ideas, socialize and collaborate. The space can support that or hinder it.” In addition, she believes that beauty is an important factor today. “People want to be surrounded by beautiful things that give comfort and inspire productivity and wellbeing.” She points out that these factors are particularly important as corporations compete for talent.
“Design is an integral tool in creating an environment where employees want to spend their time,” says Simcox. “And designing for the needs of employees and various working styles can be an effective tool for retention and recruitment.”
Jackson notes that quantifiable factors around health and wellbeing are also highly important to America’s corporate workforce today. A survey, conducted by workplace solutions provider Fellowes, polled over 1,000 U.S. and Canadian workers who work on-site indoors at least one full day a week, revealing that participants desire a clean workplace above all other amenities:
• Clean indoor workplace, including clean air
• Health allowances and/or stipends for gym memberships and exercise equipment
• Free coffee/snacks
• Free fitness club/gym membership
• Social gathering areas, including pool tables, foosball, etc.
• Happy hours/social events
While this is most assuredly an outcrop of Covid-19 (which is, for the record, not transmitted via flooring), it remains an important consideration for manufacturers providing flooring for corporate specification and for specifiers serving the sector, because cleanliness of flooring directly impacts the perceived cleanliness of a space.
“Cleanability has always been important in flooring, but now more than ever,” says Lindsey Waldrep, vice president of marketing for AHF’s Crossville brand. “When it comes to the health and safety of those occupying a space, durable, slip-resistant finishes that can be cleaned of germs and bacteria are critical to bringing the workforce back and keeping people in the office.”
This, combined with the fact that facilities departments are often running on skeleton crews, increases the importance of manufacturers providing easily cleanable floors. Furthermore, with multiple flooring materials often utilized across the floorplate, the cleaning procedure for one material must not damage another.
“Post Covid, the new norm is definitely a ‘germ-aware’ world,” says Daltile’s vice president of commercial, Whitney Welch. “People expect a higher level of cleanliness. They want to know that surfaces are being routinely cleaned and they subconsciously feel more comfortable when surfaces look cleaner.”
“Installation and maintenance are key considerations,” says Lisi. “People want to minimize downtime with flooring that can be installed quickly and easily-and once it’s installed, they don’t want to spend a lot of time or money taking care of it.”
SUSTAINABLE SOLUTIONS
Jackson reports that sustainability is an increasingly important topic across the built environment, even among parties that have a lot of their plates already, such as facility managers. He notes that one theme he heard across the many conferences he attended over fall 2023 was the importance of sourcing responsibly and gaining an awareness of the ingredients/chemicals within products specified for corporate sector use. Three of the five emerging topics at the International Facility Management Association conference centered around sustainable issues, driven by corporate real estate leaders’ growing prioritization of sustainability.
“Fortune 1000 companies that understand the need to create an attractive space aren’t skimping on flooring, but are investing in floors with sustainable messaging to tell a good story around air quality and aesthetics that support the brand message, and they are looking for what will withstand use,” explains Jackson, adding that the end-of-life story is also a consideration.
Langley also notes that it’s increasingly important to help “clients meet ESG goals.”
St. James has seen these priorities impact the specification of flooring. “We’re seeing a demand for products that are durable and easy to maintain and clean, both as a performance and a sustainability solution,” she says. “Material health and designing spaces that promote wellness continue to be top priorities.”
“Sustainability is taking precedence in flooring decisions,” adds Ostrow.
Waldrep notes, “One of the biggest questions to ask is, ‘How long do you intend for this space to last?’ That plays a huge factor when it comes to flooring selections. Lifecycle also plays into green attributes.”
However, Welch reports that “ceramic square footage is slightly declining and losing share to resilient/LVT square footage, but customers are not considering lifecycle cost.”
Hybrid work is the new standard for many corporations. St. James notes that there are regional variations around employee preference. “In New York, for example, there is a stronger desire to go into the office more often,” she says. “In cities like Atlanta, however, there is a much higher percentage of the workforce that is working primarily from home with limited time in an office setting.”
Having workers in the office part time rather than full time demands alteration of the way in which the space serves. “As companies reinvent themselves into hybrid working destinations, remodels are taking place to satisfy both the need for team building and flexibility in work locations,” says Waldrep.
Regardless of how many days employees spend at the corporate site, there remains the question of how space should be utilized when workers are there. Should employees be assigned spaces as in days of old? Should they grab whatever location strikes their fancy that day? And what about their stuff: samples, electric kettles, books? Should they haul it around in backpacks? Stash it in assigned lockers?
And how about teams-should they be required to cluster together for collaboration? What good is it, anyhow, if they are present the same days but spread over three separate floors?
The fact is, each corporation will have to wrestle with these questions separately and use that to inform the design that works best for them.
Kaufman notes that a glance into her Magic 8 Ball indicates that some corporations may ultimately tie the permanency of an employee’s workspace to their commitment to being in the office. If they intend to come into the office daily, they can claim and customize a particular desk. If they come in only two days weekly, it may be more of a catch-as-catch-can situation.
Gallman says, “In some cases, desks are being replaced with lounge-configured soft seating and warmer temperature lighting; conference rooms are being removed from their enclosures and being brought out into the open; and private offices are being made bookable, so that more people can access them when they need focused work time.”
And as for all the talk about flexibility over the last decade, Christi Hitch, vice president of commercial strategy for Bentley, says, “Flexible spaces are key to the corporate office space. Having the freedom to move without cords or [tied to] specific desk locations gives the employees choice and creates excitement.”
“The past few years have allowed companies to rethink their actual spatial needs and how they use that space,” adds Langley. “Many companies want flexible and adaptable spaces, so that they can make moves and shifts in how they use space when needed.”
Copyright 2024 Floor Focus
Related Topics:Mannington Mills, AHF Products, Shaw Industries Group, Inc., Tarkett, Interface, Daltile, Mohawk Industries, Crossville