Andrew Zacharias | ISG Frankfurt & Luxembourg

Banking on sustainable future: innovative solutions for offices in the German financial sector

In the Insight article, Andrew Zacharias, Divisional Director for Frankfurt and Luxembourg, sheds light on the dynamic evolution of office workspaces in the banking sector and their crucial role in attracting top talents. With extensive experience in tenant fit out for global financial organisations, he offers valuable insight into designing office space that positively impacts turnover, employee satisfaction and attracting top talent in a competitive industry.
Even though higher interest rates enable banks to achieve greater margins, defending the customer interface, addressing sustainability concerns, pursuing cost-effective growth, and competing for top talent remain significant challenges. In this evolving landscape, organizations in the financial industry are faced with the task of adapting their strategies. Companies leveraging digital transformation to create people-centric environments empower their employees and enhance overall business performance. Many banks are already adopting hybrid work models, smart building technologies, and sustainable real estate solutions.

As a general contractor and partner, our aim is not only to create inspiring spaces but also to ensure that owners, tenants, and users can optimize their office spaces. With our ISG offices in the key financial hubs of Europe, including Frankfurt, Luxembourg, Geneva and Zurich, we are strategically positioned to assist our clients with the fit out of office spaces to the highest quality standards – from refurbishment and revitalisation to building within existing structures.

"The banking sector is on the verge of a new era where sustainability and digital innovation go hand in hand. The challenges may be significant – from defending the customer interface to competing for talent – but the solutions are tangible."

Andrew Zacharias

Identification with the corporate culture is one of the most important assets 

Companies in the financial sector need to invest more in office interiors and equipment in order to meet the changing requirements of employees and employers. The world of work is becoming more flexible, more location-independent and is increasingly going hand in hand with private life. Nowadays, the technical requirements for the new world of work are a matter of course in most financial organisations, as is trust in employees' ability to take responsibility for their own performance without a permanent office presence.

ISG's Wide Angle report "The Power of Place: The Consequences of Inaction" shows that the office still holds great significance – only the demands of employees and functions have shifted. Employees can interact with customers and colleagues on-site, better separate work and personal life, and prevent social isolation. They prefer to do this in easily accessible, high-quality, technologically well-equipped, and representative spaces that match the brand and identity of the company.

Due to the shortage of skilled workers and the challenging economic situation, employers must incorporate these new requirements into the design and equipment of office workplaces to maintain and expand customer satisfaction and employee retention. Investments in modern offices have shown positive effects on company revenues, productivity, and the recruitment of new employees. Good pay and career prospects alone are no longer sufficient to successfully address the bottleneck of skilled labor shortages for growth plans. Identification with the company and its goals has now become the most important asset. 

Measurable returns on investment in the competition for qualified specialists 

Companies that invest in office spaces and flexible working models experience significant increases in revenue compared to those that do not. In the Power of Place survey, companies that invest in their office spaces and enable flexible working report an average revenue increase of 23.5 percent. In comparison, companies that make no changes experience a revenue increase of only 0.5 percent. 

The design and equipment of spaces carry more weight than the offering of flexible working models. 53 percent of surveyed companies confirm that investing in the design and equipment of their spaces significantly facilitates recruiting suitable new employees, while this figure is much lower at 29 percent for companies primarily focusing on flexible forms of work. 

Especially in industries such as financial and consulting services, where competition for highly skilled professionals is particularly strong, investment in the physical working environment and the ability to work remotely is of great importance. Companies that invest in these areas have realised that they can not only maintain their leading position, but also attract highly qualified talent more easily.

Recently, ISG has been commissioned as general contractor for the tenant fit out for a multinational investment company. The project involves the refurbishment and renovation of office spaces in the K2 building in Luxembourg. Our client aims to facilitate the growth of staff numbers by expanding office spaces and tailoring them to the users' needs. They place particular emphasis on a high level of design and premium quality office furnishings to meet the demands of the dynamic and market-moving financial industry. 

"Investments in the design and furnishing of office spaces are not a luxury, but a strategic necessity to successfully compete for qualified professionals. Companies taking this step not only experience significant revenue growth but also position themselves as attractive employers for top talent." 

Andrew Zacharias

Use of technologies to increase well-being, efficiency and energy consumption 

The use of AI and cloud technologies to improve wellbeing, efficiency and energy consumption is also becoming increasingly important for companies in the banking sector when designing their office space. Companies are now looking to integrate building management systems that enable centralised controls. These systems record the quality of the building, from airflow to water circulation.  

Smart technologies not only improve the working environment, but also help to reduce the environmental footprint. To achieve zero carbon targets, long-term planning is required to identify buildings in need of refurbishment or revitalisation. Investing in the refurbishment of existing buildings leads to lower CO2 emissions and promotes a more environmentally friendly construction process through the reuse of buildings and materials. 

One example of this is the tenant fit out for Mastercard in the financial centre of Frankfurt. ISG has created a new office there that offers a digitalised working environment. It includes complex audiovisual technology and video conferencing tools, sound masking solutions and lighting concepts. The LEED Platinum certification for the Mastercard project demonstrates the high sustainability standards of the new office space, which was supported by efficient measurement, control, and regulation solutions.

Investment in the built environment as an indicator of a diverse talent pool 

Investments in the quality of workplaces can also be seen as an indicator of future workforce demand. This applies to qualifications, locations, and industries alike. ISG's latest Wide Angle report "Rethinking the skills conundrum" concludes, among other things, that the development of investments in the built environment serves as a basis for education and qualification planning that effectively prevents talent shortages in the most future-proof areas of the economy, provided it is based on a partnership between education policy, educational institutions, research institutes, training organisations, and the private sector. On the other hand, a too small pipeline for entire economies or sectors can also serve as an early warning system for an impending shortage of qualified workers. 

Organisations in the financial sector have a critical role to play by designing sustainable office spaces that not only promote employee wellbeing but can also help strengthen communities. Now is the time for banks and other organisations to take bold steps and invest in a better future.

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