In the past few years, age-based demographic shifts have caused two concurrent market-driven design and architectural trends. In the majority of developed countries populations are aging, and the number of graduates entering the workforce is diminishing in proportion to those reaching retirement age. This has an impact on both how businesses structure their workplaces as well as how other commercial facilities design and manage their spaces. Concurrently, the increasing affluent retiree demographic is also creating new markers for facilities and new ways of managing hotel, hospital and housing to cater to that emerging sector. As we enter the age of demographically driven design, property owners and managers should not ignore generational change when planning and delivering their product.
Many multi-national companies now outsource a proportion of their headcount to developing countries including popular Asian hot-spots such as India and the Philippines. With young, increasingly educated workforces, these countries provide support for growing service driven industries. Large numbers of young graduates are entering the workforce, yet demand for the best of them is high, turnover is equally high and all stops are pulled out to lower the likelihood of attrition.
| India, where new commercial buildings are going up at the same rate as residential evelopments, will have the largest working population in the world by 2050 |
In part because of this, companies are now increasingly focusing on ‘campus’ facilities (the term deliberately aping university lingo). Not only is the iconic architecture, parkland and top-notch sports, residential and even shopping facilities attractive to active twentysomethings, they discourage staff from leaving. The less you give them a reason to leave the company-created “return to student life”, the less likely they are to come across, let alone take, another job.
Real estate demographic
That is the situation in markets such as India, where new commercial buildings are going up at the same rate as residential developments to respond to what , the Urban Land Institute report (the ULI Report) entitled Global Demographics and Their Real Estate Investment Implications, by M. Leanne Lachman, predict will be the largest working population in the world by 2050. Globally, the residential vs. commercial split is around 70:30.
The global talent-rush in many developed countries means that the number of people entering the workforce is reducing in proportion to the number of people leaving it. In Australia the trend towards campus style developments is a reaction aimed at providing flexibility to what, according to Carol Gould, Divisional Manager Property and Facilities Management, United KFPW (NZ), is now developing into a three to four generational workplace environment. Spaces have to be flexible to meet all requirements.
A similar situation is being seen in the world’s second largest economy. Suzanne Tatikian in an article entitled “Japanese Demographics: Age Distribution” states: “Japan is experiencing population aging which is not uncommon to countries which have achieved demographic maturity, with low birth rates, low death rates, and low rates of natural increase… the long-term prospect is for continued decline.”
The ULI Report argues that in countries such as Japan where aging populations coupled with restrictive immigration policies don’t allow migrant workers to fill the working age population gap the prospects for real estate investment is slimming. The authors predict a “replacement” real estate phenomenon where stock is either refurbished or replaced but little additional stock is required. This is already being seen in advanced European economies such as Germany. However, even in economies that require few new facilities, the built environment has a role to play in moulding and recreating spaces to deal with changes in demographic composition. First, the architectural look and design of a space needs to adapt to suit new demographic requirements. Secondly, building interiors can be redeveloped or constructed from scratch to attract and accommodate the age and social requirements of desired users.
Age specific design
In many Asian countries and particularly in emerging markets, populations are comparatively young and increasingly affluent. Although the older generation still hold a great deal of the wealth, the young urbanites disposable income is on the rise. According to Ghaleb Cababe, Deputy Branch Director, Archetype, in Vietnam, interiors and exteriors are designed at least partly with the age of the users in mind. As is the case the world over this means the young prefer trendy designs while the older generation are more “classic”. He says that often clients will not recognise this, preferring their own taste and to stay within their comfort-zone rather than doing what might work best for the project.
Cababe says the client that comes equipped with market research information is in the best position. Many property owners want high prestige projects, such as five star restaurants even when this is clearly not the right idea for the location, “it is better to do a good three star than an ordinary five star”, he notes. Young Vietnamese professionals now spend money in bars and clubs, which has only increased the number and also changed the design nature of establishments which previously catered mainly to older business and international types. However, designing for generational differences is still a long way from becoming a significant consideration when, as Cababe notes, basic issues such as disabled access and interpretation of regulations surrounding buildings still loom large.
| In Asia retirement communities or aged care facilities are less likely to see a development and investment boom. |
Access and ease of use for older or disabled patrons is also becoming an important consideration for designers and developers throughout the region. Not only is there a huge market in Australian, European and North American retirees looking to travel to Asia or take up retirement or holiday homes in the region, medical and health tourism is also gaining ground. According to a UBS report issued in March 2006 on the prospects for Asian REITs, the affluence of the aging population within Asia is significant. The authors stated “More than 35 percent of the population in the four wealthiest regions of Asia is already more than 40 years old.”
While some predict that many wealthier seniors will continue to work, many will not. In Asia retirement communities or aged care facilities are less likely to see a development and investment boom. Tatikian notes that “Some 70 percent of old people [in Japan] live with their children, compared with less than 25 percent in many Western countries.” However, those able to afford it will travel, so the tourism industry and its buildings will need to be adapted with seniors’ concerns in mind. The ULI article suggested that this industry could become a good employer creating workplaces that would need to function across multiple generations.
A workplace for all ages
The workplace however still presents the greatest design and management challenges. In a presentation at the Australasia Summit for CoreNet Global, an international corporate real estate network, Carol Gould, Divisional Manager Property and Facilities Management, United KFPW (NZ) noted:
With an increasing number of older workers in the workplace, there is a need to consider:
- Eyesight: lighting, screens, signage
- Mobility: disabled access, ergonomics
- Dexterity: door handles, light-switches
- Hearing: fire alarms, evacuation procedures
Apart from physical differences there are several environmental and social differences between the various generations now working together, for example, the increased importance of environmental and “green” design. The younger generation has been brought up to prioritise environmentally friendly design in many locations and will judge employers accordingly.
Also speaking at the CoreNet Global summit, Michael Greene, National Director, Corporate Solutions, Jones Lang LaSalle, says that to accommodate any group of individual’s requirements means a partnership between Human Resources, IT and Corporate Real Estate and building a culture that allows flexibility. He believes an environment that caters for different workstyles and different generations should measure success through:
- Staff retention and attraction
- Built environment that can support change
- Instilling corporate culture into a disparate workforce
He emphasises that districts within cities hold a critical mass of people from certain demographics, so that “location should not be underestimated” particularly when deciding on the merits of a city centre location compared to a suburban location.
In the workplace itself, the changes can be seen most starkly. In a presentation at Office Space Asia 2007, Michael Crittendon, Director, Workplace Strategy Asia Pacific, Steelcase, noted that the people issues affecting the workplace today are: skilled labour shortage, erosion of worker loyalty and the four generation workforce. According to the US labour department, 40 percent of the population change jobs every year and in countries such as India and China that number is much higher. Capturing and retaining talent in this high-velocity labour market neccesitates a number of measures, and workplace design is a key weapon for employers.
“It is not simply a case of designing a fitout that meets the requirements of a particular demographic,” explains Edwina Molony, National Manager Business Development, UGL Services, “but more creating and then operating a workplace that is flexible and sufficiently adaptable to attract, retain and meet the need of all groups, both existing and potential, across generations.” She continues that many of her clients are using communication and change management to bridge this gap, and “assist in achieving greater buy-in from stakeholders.” Adeline Kiong, UGL Premas, concurs, noting that many clients are introducing flexibility and mobility into their workspaces, with options such as hotdesking being used. “No matter what generation, this method tends to meet with everyone’s needs,” she says.
| The number of graduates entering the workforce is diminishing in proportion to those reaching retirement age |
Meeting all generations needs has become a major challenge. Gould points out that workplaces are becoming increasing less hierarchical, so “grey hair” doesn’t mean that someone is necessarily more senior, and youth no longer equated to being junior in all situations. However, all those groups have different expectations of their office environments.
The “Generation Yers” she says, are an important group, almost as influential in many offices as the Baby Boomers (the ubiquitous generation now nearing retirement age in most developed countries). This group, Gould explains, were born between 1977 and 2000 and are the “Net generation —bombarded by media since birth”, also known as Echo Boomers, Millennium Generation, Net-Gen, Thatcher’s Children and Generation Why. She says they tend to respect wisdom, not authority, and are creative, tolerant, inclusive, entrepreneurial, self-confident.
Though significant differences exist between this group in different parts of the region Gould says there are several common traits the Australian context:
- Form a global recruitment market
- Workspace environment a factor of choice
- Want true collaborative space —not just open plan
- Yet to enter the workforce in large numbers
- Techno-savvy —”stimulus junkies”
- Want technology to define the workspace
- Technology haves/have-nots a major “class” definition
- They choose employers, not the other way around
As designers and managers of offices and any other form of public or private space should be aware marketers and HR professionals in companies continue to carve up human demographics in order to categorise, understand and control human behaviour. Whether the reasons for this are clear or not, the process is having a direct impact on how commercial and residential space is designed. Moving away from mere concepts of traditional and trendy, all spaces need to be managed so that they take into account all factors, such as the accessibility and tech-savviness of the intended user. According to an article written on Campus MLC, the wealth management division of National Australia Bank in Melbourne, “Work has become viewed more as part of their overall lifestyle rather than just a way to put food on the table”. And those who have ceased to work present opportunities through the lifestyle they continue to have.
Despite free trade being a mantra voiced by developed nations it has never applied to free trade in labour. Quite the opposite, most countries protect their own labour force through stiff immigration policies. Now through the development of technology, changing economies in developed countries and improved business climate jobs that were previously only available to nationals can now be farmed out offshore, often to Asia. At the other end of the human lifecycle a multidirectional tourism, retirement and medical tourism exchange is also affecting peoples lives as well as producing opportunities for those willing to design for their needs.