Ark - Financial Sector Workplace Report

Finance Transformed: Unveiling the Next-Gen Workplace AUGUST 2023

“Financial services firms are experimenting more than ever with new ways of working, each one with a unique impact on business and culture. But when you look beyond the basics of hybrid policy and occupancy strategies, you see a clear and unified aspiration for a workplace that meets us at a human level. This new financial workplace energizes and empowers employees, unlocking talent to drive growth and innovation.”

Lisa Knip HLW Financial Sector Lead/Principal

Discovery begins with curiosity.

We believe the physical environment has the power to transform how we work, play, and live. Research is the key to unlocking its potential.

WHO WE ARE

The Ark Research Lab solves workplace pain points for clients across industries, using nuance and data to help you stay more agile, smarter, and ahead of your competitors.

ABOUT THIS DOCUMENT

The Ark Research Lab, in partnership with HLW global design leaders, compiled this report to identify the fundamental shifts taking place within the financial services industry and offer strategic advice to help you move forward with confidence.

We’ve leveraged Ark internal data sources and HLW project experience to offer strategies rooted in measurable outcomes and real world constraints.

Carlotta Dove Ark Research Lab Founder Psychology (MSc)

Brian Ledder Ark Research Lab Lead Geodesign (MSc)

Research Lab

Jenifer Duong Ark Research Lab Data Analyst Design Analysis (BSc)

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Ark Benchmarking Data Ark Market Surveys Designer Interviews

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HLW Design Imagery Third Party Sources

FI NANCE WOR K PL ACE SU M MARY M ETR ICS

Financial services firms are adjusting to hybrid work patterns Office attendance has rebounded but remains less than four days per week.

Workplace metrics have shifted toward an increase in shared space.

Firms are exploring a range of seating policy options to maximize utilization and create a vibrant workplace.

“Empty Spaces, Hybrid Places” McKinsey Global Institute, 2023.

Ark Benchmark Database, 2023.

Finance employees average about 3.4 days per week in office

TRADITIONAL FINANCE WORKPLACE

162

144

160 SF

138 SF

PCT OF WORKSEATS IN OPEN PLAN

85%

89%

CAFE SF / WORKSEATS

6.9 0.71

8.4 0.91

MOSTLY ASSIGNED

HIGH VARIATION

USF / WORKSEAT ONE DAY PER WEEK OR LESS

THREE DAYS PER WEEK

FIVE DAYS PER WEEK

Typical office attendance varies by company size.

AVERAGE OFFICE SIZE

“Empty Spaces, Hybrid Places” McKinsey Global Institute, 2023.

Larger firms offer more flexible work policies, typically as a talent attractor

COLLAB SEATS / PERSON

2,500+ NUMBER OF EMPLOYEES

1,000-2,500

50-1,000

SEATING POLICY

2-50 3.0

3.2

3.4

3.6

DAYS IN OFFICE PER WEEK

3.8

4.0

POST-PANDEMIC FINANCE TRENDS

(Assigned, assigned by function or tenure, unassigned)

Smaller offices and slightly fewer offices are typically provided

More square footage is allocated to collaboration spaces and office cafes

Firms are experimenting with a range of seating assignment options

Financial services firms are shifting their priorities towards human capital, and re-imagining the next-gen financial workplace.

I N TH E TH E N EXT-GE N FI NANCIAL WOR KPL ACE...

01

Vibrant office culture wins the war for top financial talent.

02

Finance employees have ample workspaces that support focused work.

03

Flexible spaces enable firms to adapt to shifting market dynamics.

04

An increased focus on ESG commitments is met with greater authenticity in the workplace.

05

Workplace design and aesthetics are a tool for making meaningful connections with clients.

VI B R ANCY AN D CU LTU R E

01. A vibrant workplace attracts top financial talent More than ever, prospective employees within the financial industry are taking company culture into consideration before making their decision. A vibrant workplace showcases a firm’s commitment to its employees and its culture.

What are some effective ways to establish vibrancy in the workplace?

FOCUS ON THE CAFE

Identify hubs of activity, often cafes or pantries, and build the workplace experience around those settings. Utilize events and programming to maximize the utilization and value of these spaces.

DESIGN FOR ATTENDANCE

FINANCE WORKPLACE INVESTMENT Which spaces had the largest increase in investment in the past two years?

INCREASED INVESTMENT

CAFE / GATHERING AREAS

CLIENT AREAS

Design and size your workplace based on workplace attendance policy and expected attendance to create space that operates at intended capacity.

TRAINING SPACES

MANAGE THE BUZZ

PRIVATE OFFICES

Move past noise concerns and encourage open communication with thoughtful neighborhood sizes and adjacent meeting space.

DECREASED INVESTMENT

Cafes have increased both in terms of size and prominence within the office.

Ark Benchmark Database, 2023

“Our most innovative financial clients are prioritizing amenities, wellness, and employee experience over the corner office. The focus has shifted toward equity of experience.”

Lisa Knip, HLW Financial Sector Lead/Principal, 2023

H IG H PE R FOR MANCE WOR K PL ACE

02. Focus trumps collaboration Finance employees are dissatisfied with open collaboration spaces in their primary work areas. They seek high performance workplaces that includes a mix of enclosed, confidential spaces that support their need for focus work.

What are the characteristics of a high performance finance workplace ecosystem?

FOCUS WORK IS PRIORITIZED

MEETINGS ARE SEAMLESS

WORK HAPPENS ANYWHERE

THE TRADING FLOOR IS STREAMLINED

Neighborhoods designed for deep focus work are smaller, with adjacent meeting and support space.

Enclosed collaboration areas further segment open workstations.

Quality destination space that functions as an alternate work location allows employees to move around the office. Finding the right type of space for an organization requires a deep understanding of how its unique teams work.

72% of financial services firm employees say the ability to complete required tasks drives their decision to come into the office.

HLW Workplace Satisfaction Survey, 2023

New tech and furniture solutions enable quality hybrid in-person/virtual meetings that provide meeting equity and ease of information sharing.

Support services are located nearby, in some cases embedded in trading furniture. Furniture, along with power and data, are configured to maximize sight lines and quick communication.

E NAB LI NG I N NOVATION

03. Nimble space enables innovative operations The generative AI revolution, societal shifts, and global recessions are impacting the financial sector, making long-term lease commitments daunting. Including the right kind of spaces and well designed modular components allow clients to test out innovative programs and scale in place as market conditions allow.

How does physical office space drive innovation within an organization?

BY ENABLING A RANGE OF HIGH QUALITY, IN-PERSON EVENTS

BY SUPPORTING NEW WAYS OF WORKING

To rebuild culture, support ESG goals, and drive attendance, many finance firms are hosting inperson events. Long term, the purpose and format of these events is highly unpredictable. Creating flexibility in these large spaces allows a business to adjust as needed and host high quality tailored events as the situation requires.

Modular sizes of enclosed rooms provide flexibility to explore progressive office assignment policies or accommodate growth in new ways.

255%

increase in the number of in-person events since the end of 2021. Many of these events include a virtual element as well, demanding space with quality tech and AV capabilities to support.

Forbes, 2023

An increasing number of furniture solutions for enclosed or semi-enclosed space allow for faster and easier reconfigurations of existing office space.

76%

of financial firms are revising their office assignment policy based on new utilization patterns.

METHODS OF OFFICE ASSIGNMENT 8%

ASSIGNED TO ALL

15% BASED ON EARNINGS 38% MD AND UP 18% LEADERSHIP ONLY 8% UNASSIGNED 12% NO OFFICES Ark Workplace Benchmarking, 2023

COM M U N ICATI NG AUTH E NTICIT Y

04. Authentic commitment to ESG’s is a requirement “Employees get on board with ESG goals when they feel it lived and breathed through company culture and space.

Otherwise, it’s just hot air. ” Currie Gardner, HLW Associate Principal, 2023

Increased accountability toward company ESG goals is taking root among top financial services firms. An authentic commitment to these goals is embedded in company culture and reveals itself in how physical space is allocated.

How does an office demonstrate authenticity toward ESG goals?

DEMOCRATIZE THE SPACE

Prioritize shared spaces that provide direct benefits to all employees. Rethink office allocation and provide enclosed private areas for employees without an office to use as needed.

25%

Increase in the size of the workplace cafe space.

13%

Decrease in the size of individual offices.

Ark Workplace Benchmarking, 2023

INTEGRATE WELLNESS

Health and wellness incorporated into the open work area through controlled lighting and biophilia provides a constant benefit that even wellness rooms can’t offer.

REMAIN SUBTLE BUT SERIOUS

ESG initiatives are important to integrate into the physical space, but going overboard on them can dilute a company’s unique brand identity.

CON N ECTI NG WITH CLI E NTS

05. Client visits are about meaningful connections High quality office design has the power to articulate company values in subtle but impactful way. The client visit is a chance for a firm to showcase who they are and make a meaningful connection with their clients.

“When our clients come in they want to see that this is where the best thinking happens.”

Ark Visioning Session, 2023 - Confidential Private Equity Client

How does design make a positive impact on the client experience?

SHOW HOW YOU THINK

The office aesthetic offers clients a glimpse into how a firm thinks and what it values. Being tactful with aesthetics gives a firm a chance to control that unspoken narrative and remain upscale without feeling ostentatious.

ENABLE SIMPLE HOSPITALITY

Showcase hospitality in ways that don’t require extensive effort so that it feels like a natural extension of day-to-day operations.

DESIGN A BRIEF TOUR ROUTE

The path from reception to a meeting room is likely short, but it is a great chance to showcase a firm’s best qualities. Visuals like artwork and awards are one tactic. In some cases, firms are providing sight lines into other areas of the business, maintaining privacy/confidentiality while giving clients a sense of company scale.

LOOK I NG TO TH E FUTU R E

Strategies that push the boundaries DESTINATION SPACES

TALENT DEVELOPMENT

WORKPLACE ITERATION

Unique destination spaces provide a greater spatial hierarchy and drive movement through the office, increasing energy and vibrancy. High quality working environments that employees want to use and the proper tech to support them make these spaces successful.

Junior and senior staff seek out learning and development in the workplace. High quality talent development programs often involve formal training sessions; however, most learning happens at the desk. Configuring neighborhoods to ensure a free flow of communication and access to experts/senior staff will enhance day-today talent development.

Periodic improvements to the workplace signals a commitment to innovation and a willingness to fail. This attitude catches on with employees and results in an increased willingness to experiment, driving innovation.

HLW Project Showcase

Workplace Designs From Industry Leading Clients

H LW PROJ ECT S HOWCAS E

Confidential Wealth Management Client “One Unique Experience” was the driving concept for this wealth management firm’s new workplace. The warm and unexpected aesthetic is consistent throughout the office, creating a unified experience that values employees and clients equally.

Attractor zones at each stair landing create a hierarchy of space and increase the potential for chance encounters among employees.

Focus work is prioritized with a variety of private and semi-private work areas, given prominent locations in the office.

Small neighborhoods separated by supporting services and biophilia creates an efficient work environment with integrated wellness.

H LW PROJ ECT S HOWCAS E

Morgan Stanley New policies regarding attendance and agile working demanded high performance office space that is intuitive and flexible. Morgan Stanley’s new downtown headquarters employs a range of settings that allow employees to work how they see fit, resulting in innovative uses, creative thinking, and a well connected, yet dispersed workforce.

Meeting culture is transparent with glass enclosed rooms and on-the-spot reservations systems.

Additional open meeting areas allow for quick conversations away from the desk.

Enclosed spaces at multiple scales support a range of work types and user preferences. Full tech enablement ensures the right tools in any setting.

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