New workplace standards demand an evolution of office design: JLL

JLL’s annual design trends and cost guide has found a shift toward hybrid work practices and that prioritizing sustainability goals is impacting office design and fit-out cost

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According to JLL’s new U.S. and Canada Design Trends and Cost Guide, while human-led design and sustainability will be the defining forces in office fit-outs in 2024 and beyond, they will also come with more complex cost considerations for occupiers and owners.

A shift toward human-led design is reshaping workplaces and putting an emphasis on creating spaces that support collaborative and focused work for virtual and on-site employees.

In order to balance the flow of employees’ work throughout the day, a responsive physical space is required, which is in short supply in the U.S. and Canada. Sustainable office spaces are also facing overwhelming demand with the increased number of corporate net zero commitments.

“Financial stewardship and disciplined capital investments are increasingly important to our clients who are trying to make smart investments or do more with less,” said Julie Hyson, Americas portfolio clients, services & industries lead, project ad development services, JLL. “We have the privilege of helping our clients engage talent and drive optimal business performance by leveraging the power of culture and space.”

JLL noted that after two years of double-digit cost growth, average fit-out costs for 2024 grew just 2.7 per cent year-over-year for moderate-style build outs with medium-quality finishes.

According to JLL, of the over 50 metro areas tracked, those seeing the fastest cost escalations in 2024 remained below half the national average increase in 2023, and at just a quarter of the high inflation observed in 2022.

“Stabilizing material prices and contractors looking to build up backlogs kept hard and soft cost growth near pre-COVID historical ranges,” said Andrew Volz, research manager, project and development services, JLL. “Stable price increases are expected again over the course of 2024, with areas of growth reflecting the continued evolution of the office around hybrid work, connected human experiences and the built environment to support it.”

Office fit-outs are evolving to meet the needs of new hybrid work models. The three trends to consider when developing office fit-outs in 2024, according to JLL, include  the following.

While hybrid work offers flexibility, it’s important to create spaces that support team collaboration as well as individual focused work, with sound privacy and the integration of technology to enhance the overall human experience.

“Well-designed workspaces, complete with the right mix of purposeful furniture and technology, can reinforce employee satisfaction,” said Stephen Jay, Americas head of design solutions, project and development services, JLL. “We design and create spaces that exemplify our client’s culture and support their people by prioritizing their physical, social and mental wellbeing.”

With more companies committing to net zero targets, there is also an increased emphasis on incorporating eco-friendly practices in office fit-outs, according to JLL. This includes the adoption of lower embodied carbon targets and circular economy principles that aim to maximize resource use, minimize waste and regenerate products and materials.

“There is a rising demand for sustainable spaces that support both an organization’s low-carbon goals and meet their employees’ rising expectations,” said Louis Molinini, Americas market lead, project and development services, JLL “By investing in sustainability, we help our clients live their values by demonstrating their commitment to environmental responsibility, while creating spaces that support the way they work.”

More hybrid work environments have introduced unique cost considerations as designing spaces with technology to accommodate in-person and virtual collaboration tends to require more capital. As a result, organizations are spending more on multifunctional rooms and virtual meeting technology to support this work model.

According to JLL, cost growth here will likely remain elevated as the industry continues to embrace hybrid work environments. JLL also noted that investing in workspaces that improve wellbeing has a positive impact on performance, delivering greater satisfaction for the employees and employers in the space.