_Redesigning Work: AI's Impact on the Future Workplace and Employee Wellbeing

The intersection of artificial intelligence (AI) and workplace evolution is no longer a futuristic concept but a present-day reality.

AI-driven automation has already displaced over 300 million jobs globally, according to Goldman Sachs. Yet, it is also creating new opportunities that redefine the workplace.

The integration of AI into various aspects of business is not only reshaping job roles but also transforming employee behaviours and therefore workplace requirements. For owners, occupiers, and industry professionals, understanding these changes is crucial for strategic planning and appropriate allocation of long-term capital.

AI's Impact on Jobs and Workplace Dynamics

The advent of AI technologies is poised to revolutionise the workforce. According to recent findings from Knight Frank’s Corporate Real Estate Sentiment Index (Q3 2024), AI adoption is set to rise significantly over the next year, with 48% of respondents expecting high or very high enterprise-level AI use.

In corporate real estate (CRE) functions, areas such as lease management, operational efficiency, and sustainability were highlighted as key opportunities for AI application. While current adoption levels remain low, the anticipated growth underscores AI’s transformative potential in driving efficiency and streamlining operations.

Looking further forward, we believe this shift will impact how people use office spaces. As routine tasks become automated, employees will engage in more complex, creative, and collaborative work. Offices will need to support this by providing spaces that foster innovation and teamwork. It is also likely that the nature of work will become more fluid, with AI handling more transactional tasks, allowing employees to focus on strategic initiatives.

Changing Nature of Work Tasks

A previous study by the Organisation for Economic Co-operation and Development (OECD) found that 14% of jobs are highly automatable, and another 32% could see significant changes in how they are performed. Tasks such as data entry, scheduling, and basic customer service are increasingly being managed by AI systems. This could potentially ‘unlock’ 20 – 30% of a person’s time which will allow people to focus on tasks that AI cannot replicate easily, such as leadership, critical thinking, and complex problem-solving. None of this is new, but there has not yet been a lot of thought around how this impacts employee’s behaviour in the actual workplace – whether it’s an office, a lab or even a warehouse.

AI's Influence on Workplace Design and Structure

AI is having an impact on jobs and consequently an employee’s behaviour in the workplace, but it’s also being used to help redesign and optimise workspaces.In response to economic pressures, many occupiers are focusing on reducing capital and operational expenses. Recent insights from the Knight Frank Australian & New Zealand (Y)OUR SPACE Q1 2025 report indicates real estate, which typically accounts for 10-15% of a company’s overheads, is a key area for cost reduction. In the search for greater efficiency, there's a trend towards optimising existing portfolios and workspaces rather than expanding them, and AI comes in as a useful tool here. Companies are increasingly using AI to analyse their real estate portfolios and make data-driven decisions about which properties to retain, repurpose, or divest. Specifically, we are using AI to overlay market data, demographic, talent and supply chain data with specific company data points to help provide actionable insights. This strategic approach helps organisations maximise the value of their real estate assets while minimising costs.

Companies can also leverage AI to create flexible workspaces that adapt to changing occupancy levels, to ensure space is used effectively. AI can optimise space utilisation by analysing occupancy data, determining which areas of the building are underused and suggest ways to repurpose them. This too can reduce the size and need for additional real estate.

The rise of AI, particularly innovations such as voice-activated assistants and AI-driven collaboration tools, is also prompting a re-evaluation of office design. Findings from the Australian & New Zealand edition of (Y)OUR SPACE highlight a growing emphasis on flexible and collaborative spaces, with organisations increasingly prioritising productivity-enhancing environments: 61% of organisations have changed the mix of space in their workplace over the past three years, and 67% have increased the number of meeting rooms to support these goals. There is also a focus on balancing employee experience with cost considerations, as hybrid work continues to influence real estate decisions.

Designers are considering how to incorporate spaces that accommodate AI interaction (increasingly via voice) without disrupting coworkers. This may involve creating more private pods or soundproof areas where employees can engage with AI tools freely.

Efficiency and Maintenance Improvements

AI also offers opportunities for improved building management. Smart systems can monitor energy usage, predict maintenance needs, and adjust environments for optimal comfort, leading to cost savings for occupiers (and owners). Knight Frank's own Verdig platform uses AI to automate the capture of asset sustainability data. Verdig’s technology paints a comprehensive picture of a building's carbon emissions footprint, as well as identify performance and consumption anomalies to support energy and emissions optimisation targets. Knight Frank’s research suggests that enhanced operational efficiency and predictive facility management such as this are among the most significant AI use cases in CRE today. A report by McKinsey titled "Rewiring maintenance with gen AI" reinforces this, noting that AI-driven maintenance can reduce building operating expenses by up to 20%. Occupiers will increasingly demand the use of this technology from owners, who in turn will need to start implementing it to remain operationally efficient as they compete on cost and quality.

Reimagining Wellbeing and Community-Centric Spaces

As we now know, to encourage employees to return to the office, workplaces need to offer more than just a desk. According to Knight Frank’s Corporate Real Estate Sentiment Index (Q3 2024),only 8% of respondents believe that pre-pandemic occupancy levels will return in the next six months, reinforcing the importance of creating value-driven spaces. Tenant engagement technologies such as Knight Frank’s Unite platform addresses this through a holistic blend of hospitality and placemaking, virtual community with building and booking tools, and personalised wellness support. Together, these elements create a customer experience that entices employees back to the office while equalising the experience for those working remotely. Employee expectations for workplace amenities are evolving too. Insights from the Australian & New Zealand edition of (Y)OUR SPACE reveal that workplaces are shifting from traditional densification towards creating functional, sustainable, and hybrid-friendly spaces. Amenities like wellness centres, natural light, and social hubs are increasingly valued as employees seek environments that enhance their wellbeing. This aligns with the concept of "earning the commute" by providing unique amenities and collaborative opportunities that employees cannot access remotely. While AI makes our lives simpler and facilitates remote work, it cannot replace the fundamental need for community and connection. Even if employees don't immediately realise what's missing, the sense of belonging and interpersonal interactions are crucial for a fulfilling work experience.

It makes sense then that the concept of the "third space" is gaining prominence—areas that are neither home nor traditional offices. As technologies and remote work blurs the boundaries between home and office, employees seek environments that foster community and connection, like the most common traditional ‘third space’ – a faith centre or place of worship. Buildings designed with health in mind – including social wellbeing – can improve employee productivity by up to 11% according to the International WELL Building Institute.

Conclusion

The integration of AI into the workplace is a double-edged sword, presenting both challenges and opportunities. While certain jobs and tasks may become obsolete, new roles and ways of working will emerge. Companies must adapt by rethinking workplace design, investing in employee wellbeing, and leveraging AI to enhance efficiency.
For owners and occupiers, this means creating flexible, technology-enabled spaces that meet the evolving needs of employees. By focusing on community, sustainability, and adaptability, the workplace can become a hub for innovation and connection in an increasingly digital world.

As we navigate the future, collaboration between industry professionals, employers, and employees will be crucial. To stay ahead, businesses must act now: integrate AI strategically, rethink office space for agility, and prioritise employee wellbeing to ensure AI enhances the human workforce