Offices could shrink 30% due to automation: JLL

Offices could shrink 30% due to automation: JLL

19 May 2017

JLL have themselves begun exploring the concept. Last year they installed JiLL, a robot receptionist at their 50 Carrington Street office in Sydney.

The Australian Financial Review reports that OECD figures indicate that automation may eliminate nearly a tenth of all existing jobs over the next 20 years. Many of the remaining jobs will be affected by software that does routine and process-like tasks. Companies will likely retain a smaller core of full-time employees and make greater use of a contingent workforce that comes and goes on a project-by-project basis.

JLL’s head of corporate account management Rajiv Nagrath said that these changes in the workforce will allow companies to save in their fixed real estate costs, but will also require them to access flexible facilities that can expand or contract according to the changing needs.

“There will be private space – wholesale, committed space that is a fixed cost to business,” Mr Nagrath said.

“Then there’s the ‘privileged space’, which comes at a variable cost – the coworking side. Then there’s the public space – the home, airport lounge, café – where it doesn’t cost them.”

Some industries will be more open to such changes. Even as they automated, sectors like banking were more likely to want to keep closer control of the workforce they use, but IT firms and others with a strong reliance on ad hoc projects, were likely to be more flexible, Mr Nagrath said.

Automation will impact IT too, with labour-intensive software writing becoming automated, he said.

“Someone may be manually running analysis of scenarios to make a decision,” said Mr Nagrath. “That analysis could be automated. But you will still need someone to interpret that and make a call.”

But reductions in core workforce would not necessarily mean a net savings for corporate tenants. While fixed-cost footprint costs would go down, well-designed coworking space with the needed flexibility, along with good technology and amenities could potentially soak up those savings.

“The space may be more expensive,” Mr Nagrath said.