Feb 8, 2024
9 mins read
Future of Work
With an increase in remote and hybrid work since 2020, there’s been a sizable shift in the way companies approach travel and expenses (T & E). As teams are now spread out across the globe and companies downsize their physical locations, there’s an increase in the need to bring teams together in person to drive culture and engagement.
Recently, we chatted with Johnny Clemmons, Global Head of SAP’s Industry Business Unit Real Estate and Construction, to discuss key trends and challenges in corporate travel management, the role technology (and specifically AI) plays in enabling a seamless travel experience, and what the future of T&E looks like as more companies move toward a hybrid work setting. For the full fireside chat, check out the video on our YouTube channel.
Flexspace: Why do we travel for work?
Johnny Clemmons: There are several reasons we travel for work, but it’s mostly about personal connection. Humans are social creatures, and we need those personal connections. Many people feel like they can’t get the same connection through a remote conference, even with the most sophisticated remote conferencing. You can’t share a meal with a customer or with a teammate, for example. So that’s a lot of why people are traveling–to restore that personal connection, whether that’s with people on their team or with customers around the world.
And then there are people, like me, that feel like collaboration is much better in person. When you’re doing collaborative work–trying to brainstorm an idea– in person tends to be much more effective than remote.
FS: In a recent Harvard Business School and American Express study, they discussed how companies should invest in travel for that in-person connection, which eventually leads to a positive workplace culture and employee engagement. Corporate travel used to be around more like the external piece of that, like meeting customers for sales purposes. But now we’re seeing companies becoming more distributed with remote and hybrid models and travel is a part of the company’s operating system. What impact do you think that will have on corporate travel?
JC: Companies are absolutely looking at this and figuring out what it means, particularly as it relates to company culture. How do you build it in a globally distributed team? Some companies are using events as a way to bring their teams together, then schedule more time on the front or the back of them with more team members present than they might have brought previously. Others are creating special opportunities to bring teams together.
Many companies, including SAP, have returned to the office policies in place, which are really about creating opportunities for people to engage with one another. Whether that’s engaging in a physical office or whether that’s engaging with customers or partners, travel is a big part of that.
FS: How can travel and real estate complement each other, particularly from a budgetary standpoint as companies move toward hybrid work models?
JC: There can definitely be a conflict with minimizing the facility’s cost while maximizing the employee experience within that. And then, with hybrid work, you’re thinking about how many people you have actually in the office every day, and you need to meet a maximum capacity. So, you have to have enough space for what your maximum occupancy is going to be on any given day. But if you reduce the space too much, then you can’t get the people there when they need to be. Companies are being challenged to really determine how much physical space they need.
All the companies that I talked to are talking about reducing the total amount of office space that they have over the next few years, even with a return to the office policies. The hybrid work component of lets them understand that they don’t need as much space as they did before. So virtually every company that I talked to is in the process of reevaluating their overall real estate portfolio and how much office space do they need.
And then they’re looking for solutions of how do they how do they manage that in a flexible way because they don’t want to be paying for space that they don’t need.
FS: What role will co-working spaces play within the real estate considerations of large enterprises?
JC: I think that’s really going to become something that people look at as an option. If it’s possible to reduce the overall fixed cost by saying, “Hey, we only we only need an average maximum occupancy of X, but we need a surge occupancy of Y,” then they need to look at the difference between X and Y and how that could be filled.
For team meetings and collaborative organizations where you’re having people travel in from other parts of the world or you’re traveling to a central location to reduce the overall travel costs, then adding flex space into your overall real estate portfolio makes a ton of sense. Why would you pay for something to sit empty when you can just pay for what you use? The challenge is making accessibility to flexible space a frictionless process.
FS: What do you think the future of flexible workspaces is?
JC: In the conversations I’m having with people around this, there’s a definite trend. And to decrease their dedicated office space to a level that supports their hybrid work environment and find ways to support surge capacity when they need it, whether that’s on a specific day for a special event or whatever their needs might be, flexible workspaces are viable options.
It’s really about the right experience because if employees aren’t getting it, they’re not going to return. So, if you’re bringing people to a space for a design thinking session to try to work through a particular problem, that space needs to come with all the amenities that you need, like whiteboards and technology.
FS: How do you see AI impact and play into work, hybrid work, and overall, the way that will engage with the office and with each other?
JC: AI is going to impact virtually everything that we do and everywhere we go in the coming years. But when we think about it specifically in this context, if you have an AI digital assistant that understands who you are and what you do, and it understands and can access your calendar, it could potentially manage some of the friction that booking a space can cause for companies. So if the office doesn’t have room for the brainstorming sessions, AI could potentially find another space where it could work. I’m thinking like sort of personal concierge-level capabilities.
SAP is a leader in what we call “business AI, and that’s what we mean when we talk about business AI. It’s AI embedded directly into the applications that people use on a day-to-day basis. So that it can have that context and understanding of who they are, what they’re doing, what they’re trying to accomplish, and can help to suggest things that are going to make things easier.