Can you have your cake and eat it too? ServiceNow says, yes. The enterprise software company, a sponsor of CHRO Daily, announced today that it will consolidate some of its offices, but will not release or terminate any of its office leases. Sixteen of its 79 locations will have integrated office floors that allow employees to work in closer physical proximity and reduce the company’s office footprint within its buildings. It plans to lease some of the newly vacant floors to other companies and use the rest for corporate events.
The move speaks to an issue big companies are working to solve today: How can employers adjust their workspace to reflect the significant decrease in employee need for the office? While some companies are selling their headquarters or pulling out of commercial real estate leases, Jacqui Canney, ServiceNow’s chief people officer, is hesitant to let go of all its space, warning against tendency to “reduce and react.”
Companies, especially those looking for scale, shouldn’t take real estate decisions lightly, he said. “We are a growing company [and] we are bullish we will not back down. We are expanding.”
SerciveNow is not shy about its aggressive growth goals. Earlier this year, the company said it plans to double the number from more than 19,000 to 35,000 employees in the next few years.
Setting an action plan
ServiceNow employees had flexible work options even before the pandemic, but the company recently studied how employees use its offices. Conversations about the allocation and use of space are led by chief equity and inclusion officer Karen Pavlin, with input from fellow executives.
Canney said this structure differentiates ServiceNow’s approach to using office space from other companies and helps ensure that redesign plans align with its DEI goals.
The integration process
The company used feedback tools to determine what employees wanted outside of the office. It found that on most days, less than 10% of its staff use the office unless there is an event or a specific reason for employees to be physically present.
Another finding is that employees don’t feel inspired or satisfied working in an office where they are spread out. The company will reduce the number of floors used in its large offices, cramming employees into a smaller environment.
“We’re just trying to bring people together in a denser way to have more connections, more reasons for collaboration, more opportunities to have those spontaneous meetings,” Canney said. However, keeping the unused floors would be beneficial in the event of hosting large meetings, or in case they hire additional employees in the changed locations.
ServiceNow plans to sublet some of the new vacant floors and conference rooms to employers and turn others into collaboration spaces where employees can meet for purposeful corporate gatherings.
The expected ROI
Canney expects to see the greatest return on investment when it comes to talent engagement.
“We need to do more, know more, and care more about our people. So this kind of decision-making shows how we think about it,” he said.
Amber Burton
[email protected]
@amberburton
Reporter’s Notebook
The most compelling data, quotes, and insights from the field.
This week, Elon Musk reversed his decision (or shall we say doubt) to buy Twitter and do now buy a social media platform for his original bid of $44 billion. While much of the Musk-Twitter drama has focused on the deal itself, workplace drama has been brewing in the background. After Musk’s initial bid in April, Twitter employees shared theirs fear of a potential mass exodus and impending layoffs. The legend is a reminder to employers that employees and prospective employees are affected by M&A deals as much as any other company stakeholder—if not more so. Earlier this summer, my colleague Paige McGlauflin spoke with experts about the potential effects of controversial deals and leadership transitions on employees.
“How companies treat existing employees during transformation also affects recruitment efforts and employer reputation,” he wrote. “Applicants examine layoffs, or even hints of future layoffs, as well as reductions in bonuses and equity amounts, and any suggestion of employee wrongdoing. That’s especially true within the tech industry, which for years has grappled with a talent shortage.
Read the full story here.
Around the Table
– The value of office buildings in New York City has fallen by 45% since the start of the pandemic. That’s a loss of about $50 billion. Bloomberg
– A timely reminder with the midterm elections just around the corner: Sometimes, bringing politics into the office can be detrimental to employee productivity and retention. Washington post
– Professional aspirations are no longer about climbing the corporate ladder; they’re about finding a rewarding career, and that turns out to be hard, too. Time
– Elon Musk’s announcement last year that Tesla would build a robot was just a recruiting pitch to get robotics engineers to join the company and work on its self-driving cars. Wired
Roll Call
The latest in HR executive moves.
Glassdoor hires former Dropbox CDO Danny Guillory as its chief citizen officer. Logistics operations company named Samsara Steve Pickle its first CPO.
Is there a move? Let me know: [email protected]
Water cooler
Everything you need to know from Fortune.
Okay, boomer. Gen Z is the newest generation in the workplace, but millennials and boomers still make up the largest percentage of the workforce. Employers should not forget to listen to their needs. —Megan Leonhardt
Pay the hero. Just over 1 million frontline workers in Minnesota approved for a one-time hero payment of $487.45 for their work during the pandemic. —Kaitlyn Koterbiski
#MeToo, five years later. Fortune interviewed five of the most important leaders of the #MeToo movement, along with Tarana Burke, Ellen Pao, and Gretchen Carlson, for an update on the viral movement five years later. —Maria Aspan, Erika Fry, Emma Hinchcliffe, Beth Kowitt
Fire in the hole. Amazon suspended for over 50 warehouse workers after they refused to work when a cardboard compactor caught fire. —Chloe Berger