Finding the path forward 2021

Finding the path forward 2021

Measuring the steps through COVID-19 to economic recovery in Macquarie Park

M A CQ U A R I E PA R K I N N O VAT I O N D I S T R I C T

Introduction

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FINDING THE PATH FORWARD 2021

An extraordinary time, an extraordinary response In July 2020 Connect published Finding the Path Forward, a report measuring the immediate impact of COVID-19 on Macquarie Park.

Looking back, it is astonishing to see just how extraordinary those early days of the pandemic were.

Significant business changes which would usually take many months of planning happened almost overnight. Congestion evaporated at a stroke, as commuters stayed home. We all found ways to still work together – even when we were apart.

It’s a moment in the history of Macquarie Park we won’t forget.

When compared to the impacts seen elsewhere in the world since, Macquarie Park’s community has been fortunate. We’ve been able to open up more, with fewer restrictions and greater opportunities to come together.

But there are still significant questions about how to build a successful hybrid working culture, how to safely define the role of the workplace, and how to sustain an economic recovery in our area.

That’s why we returned to the employees we surveyed in 2020, and asked them “how are you going now?”

We canvassed members of the Macquarie Park community to understand how people’s lives have changed and what this means for you, for your workplace and for our area.

We acknowledge the tireless work of the Facilities, Human Resources and Comms and Culture partners at our member workplaces, and the significance of the time they have just worked through.

Connect has had an extraordinary year, too. While busy supporting our members through the crisis, we’ve also been working hard to plan our own next steps.

We’re expanding our mission, and our name. As Connect Macquarie Park Innovation District we will prioritise the needs of Macquarie Park and to help create places and spaces for new ideas, new innovation and new jobs.

GETTING HERE

WAYS OF WORKING

MACQUARIE PARK NOW

We’re looking forward to working with you.

YOUR OFFICE

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contents I NTR O D UC T ION 2 A N E XT RAORDI NARY TI ME, AN E XT R AORDI NARY RESPONSE 3 A B O U T CONNECT MACQUARI E PARK I N N OVAT I ON DI STRI CT 5 DE M OG RAPHI CS 7 WAY S O F WOR K IN G 8 WO R K I N G REMOTELY 9 B UI L D I N G A SU CCESSF U L HY BRID WO R K I N G CU LTU RE 1 1 4

FINDING THE PATH FORWARD 2021

YO UR O F F ICE 12 T HE ROL E OF YOUR OFFIC E 13 GETTING HERE 18 GET T ING TO MACQ UARIE PARK: T RANSPORT C HOIC ES 19 MACQUARIE PARK NOW 2 4 A PL AC E FOR B USINESS, A PL AC E FOR INNOVAT ION 25 CO NCL US IO N WHAT HAPPENS NEX T ? 27

About Connect Macquarie Park Innovation District Innovation districts exist around the world, where leaders unite around a common geography to collaborate, optimise their area and boost economic opportunities for everyone.

Since 2013 Connect Macquarie Park & North Ryde has worked to increase accessibility, improve amenity and grow Macquarie Park, without growing congestion.

Macquarie Park Innovation District (MPID) was established in 2016 to increase collaboration, innovation and commercialisation, to drive growth in Macquarie Park.

In 2021, recognising their common goals, Connect and MPID agreed to collaborate and come together: to unify our aims, create value, and increase our impact.

As Macquarie Park emerges from the immediate impacts of COVID-19, the number of people living and working in our area will increase, with greater demands on accessibility and land-use, and greater need for a common identity grounded in a resilient community.

By working together members of Connect Macquarie Park Innovation District will define a unified vision for our area; to create places and spaces for new ideas, new innovation and new jobs.

We’re a business-led not-for-profit, and a unique partnership comprised of leading organisations from across Macquarie Park:

Visit connectMPID.com.au to discover our plans for the future, and to join us.

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Demographics

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FINDING THE PATH FORWARD 2021

In April, May and June 2020 Connect led three surveys to measure the immediate impact of COVID-19 in Macquarie Park. 944 responses were collected, with 240 verified repeat respondents who shared their experience during the initial months of the pandemic.

In May / June 2021 Connect surveyed people in the Park again, to understand how their experience, behaviour and perceptions have changed in the year since.

356 responses were collected, of which 188 were repeat respondents from the 2020 surveys.

All surveys were completed online, and advertised via Connect and workplace newsletters, email invitations and our online communications channels.

TOP 10 REGIONS

RESPONDENTS

Ryde

23%

Hills District

10%

Lower North Shore

9%

Inner West

8%

Upper North Shore

8%

Blacktown

7%

Parramatta

7%

Central Coast

4%

Hornsby

4%

Bankstown – St. George

3%

WORK LIVE STUDY I work here

82%

I live here

4%

I study here

3%

I work & live here

8%

I work / live / study here

3%

GENDER

AGE

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Ways of working

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FINDING THE PATH FORWARD 2021

The “rush to remote” in March 2020 saw tens of thousands of employees sent away from Macquarie Park. The local impact – from office occupancy rates to bus patronage and even the volume of coffees ordered at cafes – was significant.

In the year since, we’ve all learnt how to work remotely. And while some employers have since mandated a return to the office, others are looking at a very different future.

Employee intentions have also changed: last year the majority wished to work from home 2 or 3 days a week, and that’s still the case today.

WORK FROM HOME FREQUENCY

However, the number of employees who would like to work remotely a full 4 or 5 days a week has increased.

Last year we discovered Macquarie Park’s younger employees wanted to work from home less than their older colleagues.

In 2020, employees under 25 years old said they would prefer to work remotely only 1 or 2 days a week, whereas all other ages wanted to go remote for 2 or 3 days.

One year on it is still the case that younger employees are more likely to live with their parents, or in smaller or shared homes without a dedicated working space. They value the social aspects of the workplace more.

2021 reveals a trend in the extremities. The number of younger people who would not like to work remotely at all has increased significantly: up 13 percentage points among those aged 18-24.

Meanwhile, the percent who would like to work remotely all of the time has also increased, most significantly among people aged 18-24 (+13 points), and 55 years and over (+9 points).

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PREFERRED WORK FROM HOME FREQUENCY BY AGE

Employees told us that, in practice, only a small percent were unable to work remotely at all due to the physical constraints of their role.

A significant amount have been told they should come to the office for a few days a week, while 39% have been allowed to choose to work from home if they want.

PRODUCTIVITY

56% say they are more

productive when working remotely.

15%

say they are less productive

when working remotely.

(2020 FlexReport1)

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FINDING THE PATH FORWARD 2021

RETURN TO WORKPLACE POLICY

Building a successful hybrid working culture To help our members build a successful hybrid culture, we commissioned a new toolkit from the experienced team at Juggle Strategies.

The toolkit is filled with practical checklists, coaching videos and exercises to help employers work through how hybrid working fits within their workplace.

It includes a 5-step program, covering:

ӱӱ

Executive alignment,

ӱӱ

Team ways of working,

ӱӱ

Individual conversations,

ӱӱ

The role of the office and

ӱӱ

Tools to go further.

“Getting hybrid ways of working right not only requires a different organisational approach (away from rules and policy, and more towards principles and guidelines) but is also going to require a different approach to leadership than some managers have been used to.

The focus for leaders now is on providing direction, trust and support to their people so they can have some autonomy on what is the best way for them to get their jobs done. It is about building the two-way relationship of trust and accountability - extending trust, and expecting accountability back.

Therefore the leader’s role is focused on behaviour rather than implementation of and adherence to rules.”

Maja Paleka, Director, Juggle Strategies2

76%

of employees told us

they have everything they need to balance hybrid working across locations and time.

3%

thought they need more

3% thought their teams need more training, and 3%

training,

thought their leaders need more training.

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Your office

FROM WORKPLACE TO CULTURE SPACE In a wide-ranging article on the design of hybrid offices in April 2021 The Harvard Business Review encouraged employers to imagine their office as: — a social anchor — a schoolhouse — a hub for unstructured collaboration Each purpose requires a specific design response which will deliver different behaviours.3

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FINDING THE PATH FORWARD 2021

In our 2020 report, we recommended employers held on to all their floorspace in order to maintain enough space for safe social distancing.

Since then we’ve encouraged our members who are considering how to re-structure their office space to start with their culture and values first.

With hybrid, distributed working here for the long term, what is the new purpose of your physical office space?

To remain relevant, the office must become a destination – not just rows of desks, but a centre for your corporate culture.

To help you plot the purpose of your workplace, we asked employees how they are feeling about their physical workplace, and what would bring them back to it.

LEVEL OF CONCERN ABOUT OFFICE HYGIENE

More than a fifth of employees are either moderately or extremely concerned about the risk of infection in their office – and our surveys were conducted when there were no local outbreaks of COVID-19.

One third of employees are not concerned about infection risk in their office at all. While we would expect to see this number increase as more Australians are vaccinated, it’s clear there is still a role for reenforcing hygiene standards and reassuring employees.

When asked about activities, the majority of employees told us they were most likely to come to the office to work with their team or other teams in person, and to interact with other people in an incidental or informal way.

Using the office to socialise or to use specialist facilities like meeting rooms and collaboration spaces also scored highly.

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Case study: Making a move during COVID-19 When Schneider Electric moved to new headquarters in Macquarie Park during the COVID-19 pandemic, their “Life is on” mission statement took on new meaning.

The company used their Meaningful Purpose, Inclusive and Empowered values to encourage employees to be champions of change and innovation by being involved in the design of their new agile workspace, and by adopting new ways of working.

Schneider had a flexible culture before 2020, having rolled out flexibility guidelines five years previously. Through consultation and surveys in mid-2020, the organisation heard what employees needed and wanted from working flexibly, both during COVID-19 and into the future. Consultation confirmed that employees envisaged a hybrid model continuing after the pandemic, working sometimes in the office and sometimes from home.

Before the move at the height of the pandemic, employees’ number one concern was Health and Safety. To ensure they felt up to date and reassured Schneider regularly communicated with employees. The company aligned all messaging with official advice from NSW Health and Transport for NSW, and made sure the health and safety protocols were clear and embedded in all communications.

An app booking system for employee parking and workpoints helped employees move in to their new offices with confidence. Additional safety measures included contract tracing, providing masks, temperature readers and sanitisation stations.

Mental health was prioritised too. Schneider encouraged managers to consistently communicate with their teams, giving them resources to help check in on how employees were feeling, and resources to help if they or their people were not doing well.

By taking a consultative approach to building their culture, Schneider has worked with their employees to define the purpose of their new office and the innovative, flexible and agile ways they work, now and into the future.

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FINDING THE PATH FORWARD 2021

ACTIVITIES I WILL COME TO THE OFFICE FOR

Using the office to do usual day-to-day activities ranked last, with only half as many wanting to do so when compared to the top ranked activity.

We also asked employees what facilities they would want to come to the office to use.

FACILITIES I WILL COME TO THE OFFICE FOR

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“Flexibility will be a framework, not a prescribed choice of options. Working from remote locations and full time flexibility will all be part of the new normal. Leaders and managers will have to learn, if they haven’t already, how to motivate, measure and reward through new

WHERE EMPLOYEES WILL LOOK FOR LEADERSHIP ON WAYS OF WORKING

systems and metrics.”

Joel McInnes, CEO, FlexCareers

Individual workstations scored surprisingly high when you consider what activities employees have said they want to come to the office to do. Concerns about COVID-19 and infection risk may be driving this attachment to desk space.

Employees clearly value the office as a place for social interaction, with team and group working space scoring highest. More than 40% said they would want to return to use informal meeting spaces and socialising areas.

YOUR OFFICE: CONCLUSION Understanding the purpose of your office will change the way you manage it.

It’s important your Executive team’s intention for the office matches what your employees want to do there. Based on their desire to use the office as a space to come together, to work in teams and to socialise you may wish to consider hiring a really good barista before buying a state-of-the-art conference calling system…

A note of caution about leadership, and how new ways of work are embedded. When asked who they will look to so as to understand new ways of working, the CEO and Executive team ranked the same as everyday colleagues. HR were ranked lowest, while team managers led the way.

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FINDING THE PATH FORWARD 2021

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Getting here

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FINDING THE PATH FORWARD 2021

COVID-19 has changed the way people travel, with a sustained and significant reduction in the number of people commuting to the Park every day.

We have plotted trips taken in our area throughout the pandemic, including local journeys via active transport. In the early months of COVID-19 walking and cycling were the only modes to see an increase in Macquarie Park, while patronage on local roads, buses and Metro declined significantly.4 Trips by road returned faster than public transport. Congestion on some Macquarie Park roads now exceeds pre-pandemic levels even when many employees are still working remotely. This suggest more people are driving through rather than to Macquarie Park, for example on major routes like Lane Cove Road.

TRIPS BY MODE - MACQUARIE PARK

Public transport has experienced a slower return, and that recovery has been responsive to change. We saw an immediate behavioural response to Sydney’s COVID-19 “BBQs Galore outbreak” in April and May, with patronage levels declining again.

When asked what was informing their choice of travel mode, people in Macquarie Park told us they were least concerned about the availability of parking and the environmental impact of their commute – the same as in 2020.

The cost and duration of their commute had the most significant impact on how people chose to get to work, while concerns about hygiene have decreased since last year.

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CONCERNS THAT INFORM TRAVEL MODE CHOICE Duration of commute Hygiene during commute Availability of parking Cost of commute $ Environmental impact

GETTING BACK ONBOARD: WHAT SARS SHOWS US During the outbreak of SARS in Taiwan in 2003, daily announcements of cases correlated with decreasing trips on public transport. Over the following days passenger numbers would rise again, but did not return to previous levels.

Academics at Taiwan’s National Central University described this as “fresh fear” and “residual fear”, with “fresh fear” dissipating with an e-folding time of 28 days after each significant announcement of new infections.

“Residual fear” had a longer-lasting impact, with patronage still below previous levels some 271 days after the outbreak began, and after the epidemic and restrictions had passed. About 50% of daily trips were lost across the duration of the epidemic. Trip numbers returned to normal in 2004, but common use of face masks remained.5

CONCERN ABOUT HYGIENE ON PUBLIC TRANSPORT OVER TIME

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FINDING THE PATH FORWARD 2021

ӱӱ

Case study: Keeping people moving To ensure the whole transport network is safe for both customers and staff, Transport for NSW has been cleaning buses, trains, ferries and Metro more often during the pandemic.

On top of ‘business as usual’ cleaning, more than 2.4 million additional hours of cleaning have already taken place. An army of cleaners - an extra 1,814 workers – have also been added to the network.

Minister for Transport Andrew Constance said reassuring customers who relied on the network was important.

“Even though there were fewer customers on the network, we wanted to ensure those people who were still relying on public transport, such as frontline workers, would feel safe during the COVID-19 pandemic,” Mr Constance said.

“At the start of the pandemic we made a deliberate decision to maintain our high level of services to ensure essential workers could travel in a COVID safe way. To then enable more people to travel back to jobs we added thousands of extra services, particularly in peak hour, to allow for effective physical distancing.”

On metropolitan bus services enhanced cleaning is taking place across more than 4,000 vehicles, as well as bus stops, depots, passenger information displays and car parks.

All 13 stations on the Sydney Metro Northwest line are seeing additional cleaning services, including at Macquarie University, Macquarie Park and North Ryde stations. Each Metro train in service is wiped down on every trip – including the use of high-grade disinfectant.

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In the early months of the pandemic the reduction in trips on public transport in Macquarie Park correlated with increasing concerns about hygiene.

Since then extreme concern about hygiene has reduced, although it is still significant.

The number of employees who feel safe and confident and are not concerned at all has increased, from less than 5% in 2020 to 19% in 2021.

TRAVEL MODE

We also asked employees how they travelled to work prior to COVID-19, how they intended to commute as restrictions lifted last year, and how they were intending to travel now, in 2021.

Employees told us they are now more likely to return to Macquarie Park by public transport.

Intention to use the Metro recovered from a low of 21% of total mode share, back to the prepandemic 27%. Buses have not regained their popularity, and the intent to walk or cycle has decreased a little.

Of most concern, the intention to return to commuting by car has remained the same at 47%.

This is 7% higher than pre-pandemic levels.

Prior to COVID-19 approximately 110,000 people came to work and study in Macquarie Park each day. In “like for like” terms, and if employees returned to their prior level of flexible working, a 7% increase in people driving alone would equal a daily addition of 7,700 more cars on our local roads.

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FINDING THE PATH FORWARD 2021

SUNK COSTS DRIVE CONGESTION People’s preference for private-vehicle travel throughout 2020 led to increased demand for second-hand vehicles. The Datium Insights-Moody’s Analytics Used Vehicle Price Index recorded prices for used vehicles rising 35% by the end of December 2020 compared to the previous year.

In a sign that people may turn more permanently towards private-vehicle travel, new car sales jumped by 11% in January 2021 compared to the same time last year.6

GETTING HERE: CONCLUSIONS Employers can continue to play an important role supporting their employees to walk and cycle more by keeping their end of trip facilities clean and open. Additional support, like hiring a mobile bicycle mechanic and introducing a towel service, can also help boost employee engagement with the physical office.

An increase in demand for workplace car parking will present a challenge. Changes to tax legislation – confirmed by the ATO in June 20217 – will lead to the introduction of fringe benefit tax on some workplace parking in Macquarie Park for the first time.

More broadly, congestion exceeding pre-pandemic levels has the potential to act as a hand brake on productivity and the economic recovery in Macquarie Park.

Employers can help offset the impacts of congestion by continuing to ensure all employees are aware of their transport choices and by encouraging flexible and staggered start times to help reduce the need to travel during the peak.

“Employers can help offset the impacts of congestion by continuing to ensure all employees are aware of their transport choices”

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Macquarie Park now

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FINDING THE PATH FORWARD 2021

Because the way we work and travel has changed, and with it the way we use the office, we also asked people to tell us about their perception now of Macquarie Park as a place.

A very significant majority of people – almost all – believe Macquarie Park is changing.

42% believe infrastructure is failing to keep up with growth, and more than a third believe Macquarie Park is not being treated as a priority for investment by the Government.

We asked people to choose what is most important when thinking about how they use the area, how they move around and what amenity they need: Three most important uses and activities now:

ӱӱ

Amenity around stations (e.g. shops, cafes)

ӱӱ

A safe space for everyone

ӱӱ

A place for business

Three most important options to keep moving now:

ӱӱ

Ease of access to transport services

ӱӱ

Availability of parking

ӱӱ

High quality streets

Three most important options for space in Macquarie Park now:

ӱӱ

Places to shop and access products

ӱӱ

A pedestrian-friendly place

ӱӱ

Green spaces and trees

“A place for business, a place for innovation”

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“The intense interaction that cities allow is immensely productive. I doubt that this (pandemic) is going to slow down the growth of cities. I think the underlying economic reality is that there is tremendous economic value in interacting with people and sharing ideas. There’s still a lot to be gained from interaction in close proximity because such physical interaction is a large part of how we build trust. So I think that, for the rest of my life, cities are going to continue to be where the action is.”

Paul Romer, 2018 Nobel prize winning economist.8

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FINDING THE PATH FORWARD 2021

What happens next?

Throughout this pandemic we’ve said that making predictions is a challenge – nobody could have expected the year we just experienced, and no one can fully forecast what will happen next.

Concerns about hygiene, and the need to stay agile, will clearly be with us for a while longer yet.

Our data also shows employees still want to work flexibly and remotely, and that the desire to do so more often is increasing overall.

When people do come to their physical office in Macquarie Park, they’ve told us they will do so to spend time working and interacting with their teams, and using the office for group collaboration, incidental encounters and to socialise.

Employees will look to their immediate teams – and each other – to set behavioural expectations and embed new ways of working.

Our data suggests we should expect to see more people commuting by car, and fewer people coming to the office by other modes.

This presents significant challenges both for employers and for the wider community.

Congestion will need to be offset by a boost in confidence in public transport and more flexible start and finish times.

The need to manage congestion must be balanced with the need to bring people together, and re-build company culture as part of our area’s economic recovery.

Macquarie Park is still seen predominantly as a place to work, with improved access and amenity ranking as important needs for people in the area.

Macquarie Park’s current advantages will benefit it in the future: adaptable and affordable space, an open and green environment and continuing investment in the area.

Strong relationships will help, too. Macquarie Park’s leading employers are open, engaged and collaborative. The special connection between our academic, corporate and government communities will help us overcome challenges and plan a resilient recovery together.

Looking ahead, Connect Macquarie Park Innovation District is ready to help our members and partners.

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Endnotes: 1.

2020 FlexReport, July 2020, (sample: 1,622 AUS / NZ), flexcareers.com.au

2.

Connect Macquarie Park Innovation District, Hybrid Working Culture Toolkit, 2021, connectMPID.com.au

3.

Harvard Business Review, “Designing the hybrid office”, April 2021, hbr.org

4.

Open Data Portal, Transport for NSW, 2020 – 2021 opendata.transport.nsw.gov.au

5.

National Center for Biotechnology Information, USA “How Change of Public Transportation Usage Reveals Fears of the SARS Virus in a City”, (Kuo-Ying Wang) 2003, ncbi.nlm.nih.gov

6.

Transurban, “Urban Mobility Trends from COVID-19 Industry Report”, February 2021, transurban.com

7.

Australian Tax Office, TR 2021/2 Fringe benefit tax: car parking benefits, June 2021, ato.gov.au

8.

City Journal, “How to avoid an economic catastrophe”, (Paul Romer) March 2020, city-joournal.org

M A CQ U A R I E PA R K I N N O VAT I O N D I S T R I C T

Optus C4, 1 Lyonpark Road, Macquarie Park NSW 2113 connectMPID.com.au