Lately, there’s been a lot of talk from businesses, technologists and media organizations about the growing and forecasted trend for ‘smart offices’. If you don’t already know about these emerging technologies or would like more grounding in what they might offer, we’d recommend our guide – ‘What Does a Smart Office Look Like?‘.
In this article, however, we’re going to explore why they will have important effects on the Payroll, HR and International Assignment sectors, and why those of us in these sectors need to start paying attention to these developments.
But first, a quick refresher on what we mean here, taken from British Land and Worktech’s 2017 report on smart offices. A smart office: “uses internet-enabled technology to gather data and bring all its key operating systems and services under central control, so that a range of different elements work together to create a better workplace”, impacting occupiers “at every level – operational, environmental and strategic.” Commonly, this includes systems such as lighting, temperature, ventilation, desk and room usage, voice assistants and employee service applications.
Already we can see how, if it affects an organization at every level, smart offices must affect International Assignment, HR and Payroll departments in some way. But how, precisely?
To understand this better, let’s return to an idea from British Land’s ‘Smart Buildings’ conference from the same year as their report.
They write that uptake of these technologies will require ‘soft’ and ‘hard’ measures that will “improve the working lives and performance of their employees, and measurably contribute to the bottom line”. We mentioned this briefly in our previous article on the topic of ‘smart offices’, but let’s look at this point more closely.
To anyone in the Payroll, HR and International Assignment sectors, there will be a sense of recognition here; we also deal with ‘soft’ and ‘hard’ measures with the same aims in mind: reducing costs and improving employee experience. We have to do this while thinking about matters such as taxable vs. non-taxable benefits, auditability and compliance, systems integration, automation, HR and assignment decisions. This all affects employee retention, experience and productivity, as well as costs.
According to British Land and Worktech’s ‘Smart Offices’ report, on average, workers said they would like to be working in a new or retrofitted smart office “within two years” but expected it to actually take four years. Bearing in mind that this report was released in 2017, we can see that we’re at a point of change in worker’s expectations of their office environment: most would like to be in smart offices by now, but certainly expect to be within the next couple of years.
For competitive sectors, this means we also need to start paying attention to these changes now if we want to attract and retain the most talented and forward-thinking employees.
Anyone working in tech startups or software development will already be able to attest to the length employers go to attract the highest quality employees and get the best work out of them. These environments are famed (and sometimes teased) for their free lunches, barista-quality coffee machines, breakout rooms and ping-pong tables. But by offering fully-equipped modern offices, agile workflows and a range of benefits, these sectors show what it takes to access the best talent pools.
So, if the features of smart offices are likely to become more common in the next few years, all sectors (not just technology and software) will need to adjust to this reality to keep their talent pools healthy and their employees happy, productive and working for them.
For International Assignment this may mean taking features such as these into account when setting up new offices in other countries and when sending employees to work abroad. International assignments are often used to attract and retain top talent, and as a training and development tool. But this only works if the international office meets the expectations of the assignee: no one wants to feel there has been a reduction to their benefits or a decrease in their working conditions by accepting a new assignment. Furthermore, data from smart offices can be used to inform HR, Payroll and Tax for both assignees and the employer, saving time and money.
This means questions of what workers expect from their office environment must be central to decision-makers looking to utilise international assignments positively and to make sure they produce successful operational and HR outcomes. And what British Land and Worktech’s report shows is that these worker expectations are in the process of changing.
This is reflected by decision-makers’ opinions too, who expected a perceived average increase of 48% in appeals to new talent and an increase of 45% to employee loyalty as outcomes of implementing smart office technologies.
Of course, this raises a different set of questions for those working in payroll departments, one which will require the advice of accredited tax professionals: how does this affect compliance?
For instance, whether an employee services app is considered a taxable or non-taxable benefit, and how to integrate its features into an auditable and compliant record. If it allows users to book exercise classes or delivered food, their value and tax position, or what is and isn’t considered valid expenses, would all need to be determined within the correct framework.
All this is before even issues such as data compliance and security have been addressed, something which is vital across all of Payroll, HR and International Assignment.
As we can see, smart offices are a technological trend which promises great benefits to workers and managers, but which also raises important questions for those in all sectors and departments, not just early adopters. The impact of these changes will need to be addressed with increasing urgency by informed decision-makers within the next few years. For now, though, we hope this article has got you thinking about what the effect of these changes might be for you, and what will need to happen for them to be a success. Hopefully, it has helped set out why the trend for smart office technologies is worth paying attention to as, even if it seems far off, its closer than you might think.