What Is a Digital Workplace? Definition, Benefits, Best Practices
Years ago, you had to travel to an office or worksite to get to your job. But the rise of technology — and a global pandemic — accelerated the adoption of more flexible work.
Today’s modern workplace is a combination of physical spaces, digital tools and technology — and everything in between. The digital workplace is the glue that binds it all together.
What Is Meant by Digital Workplace?
Reworked's 2022 State of Digital Workplace report defines the digital workplace as: "Ever-evolving, the digital workplace combines leadership, culture, technology and practices to yield critical outcomes that impact both operational effectiveness and employee engagement."
Reworked contributor Sam Marshall, owner of ClearBox Consulting and digital workplace specialist with more than 20 years of experience, shared this digital workplace definition: "The concept that there is a virtual equivalent to the physical workplace, and that this needs to be planned and managed coherently because it is fundamental to people's productivity, engagement and working health."
The digital workplace includes all the components — both physical and digital — of a business. It might be a physical office space in Chicago, an office location in San Francisco and 30 full-time employees who work remotely. It also encompasses all of the tools, technology and resources those employees need to succeed in their roles.
According to Marshall, the heart of the digital workplace comes down to three things:
- Putting people first: What's the impact on employees?
- A technology layer: How are technological advances effecting digital working?
- Management and design: How does the proactive digital workplace design unite people, process and technology?
Due to their digital natures (where employees can’t speak in person or may not even reside in the same timezone), digital workplaces must prioritize productivity and collaboration through the use of the right software, apps, hardware and other technology.
You might be wondering: Why do we need a digital workplace? That answer is multi-faceted.
On the one hand, digital working allows businesses to remain agile in times of hardship or change. Think of the pandemic, when many companies could switch to digital work or shut down entirely.
On the other hand, businesses have found that digital workplaces offer a lot of benefits, from making it possible to hire more diverse candidate pools to cost savings around office rentals and utility fees.
Let’s take a closer look at the transition from the physical workplace to the digital one.
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What Is Digital Workplace Transformation?
According to PwC, modern business success hinges on the ability to connect, easily access information, respond quickly, collaborate seamlessly and make decisions in real-time. That’s where digital workplace transformation comes in, sometimes merely called digital transformation.
Digital workplace transformation is the process of using digital tools and technology to improve the traditional workplace. While you may already use technology to your advantage, digital transformation is about maximum optimization — getting the most out of each tool, app or piece of software.
It includes steps like:
- Assessing your current workplace: How does your workplace stand in the industry’s competitive landscape? What are the business’s shortcomings?
- Outlining your future workplace: How can you optimize your workplace through the lens of your employees’ behaviors, pain points and preferences? How can you address shortcomings?
- Exploring technologies: What digital workplace tools and technology can you use to meet your organizational goals, connect team members and maximize productivity and effectiveness?
- Designing the space: What will your workplace look like? Your design should include the physical office (if there is one) and the digital work environment.
One caveat: While technology is essential to digital workplace transformation, it’s only one part of the puzzle.
Rachel Happe, digital workplace strategist and advisor, as well as founder and digital workplace catalyst at Engaged Organizations, said businesses often make the mistake of starting digital transformation with tech. “If you apply technology before you change and work on and invest in process,” she said, “you’re actually codifying the old process, rather than changing.”
Another big barrier to successful digital transformation, according to Happe: Board members and C-level executives who were successful in the old world of communications but have a hard time adapting to the new environment.
“It’s a shift in how you treat people and how you think about employment and leadership and all of those things. And I think having that kind of old school mentality at the board and senior executive level is capping a lot of companies from making this change,” Happe said.
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The Digital Workplace Components and Features
What does a digital workplace look like? It’s not a physical office you can walk into and observe. Instead, it combines a company’s physical and digital presence, and the technologies and tools connecting the two.
Nancy Goebel said in her role as CEO at the Digital Workplace Group, they refer to the digital workplace as the organization’s “digital headquarters.”
The front door to that headquarters? The intranet, said Goebel, which provides access to digital spaces that allow employees to connect, collaborate, converse, get work done and create new things.
“Of course,” she said, “there can be various windows and doors that provide alternate entry points via mobile apps, the metaverse and other digital channels.”
What Are Common Digital Workplace Tools?
Modern, digitally focused companies use a myriad of digital workplace software and tools. Some of the most common include:
- Communication apps: Allow external and internal communications between colleagues, management, vendors, customers, etc. Includes email, instant message and video chat.
- Collaboration tools: Encourage employees to share knowledge and work together, despite being physically apart, such as through virtual meeting tools or shared cloud-based documents.
- Productivity tools: Digital workplace solutions that enable employees to manage and optimize their workflows.
- Data management features: Simplifies the navigation and finding of information, whether customer, product, employee, etc., within the digital workspace.
- Process automation tools: Automate routine operations in each department to free up employee time.
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What Are the Benefits of a Digital Workplace?
"Three years of survey data shows that organizations have seen gains in productivity and report that employees are experiencing better work/life balance from the move towards digital workplace," said Sarah Kimmel, Simpler Media Group's VP of Research. "In our latest research, the digital workplace remained a priority for organizations, with 72% saying it is an extremely or very important priority."
Some benefits of a good digital workplace include:
Years ago, a business was its physical space. Could it move to another location? Sure. But it took time and money.
Now, digitally focused companies are more agile. “Many organizations nowadays can pivot large parts of their workforce to remote working when major events occur — political, health, weather and otherwise,” said Goebel.
This resilience allows businesses to flourish even in the harshest conditions, providing stability to employees and customers.
Think of all the costs associated with a physical workspace:
- Rent or mortgage
- Heating and cooling
- Internet and phone access
- Building maintenance
These are all costs that can be eliminated — or minimized — with a switch to a partial or fully digital workforce.
Digital workplaces are cheaper for employees, too. One study from Owl Labs found that workers spend twice as much money when working in the office compared to working remotely. Why? Because they have to worry about paying for commutes, breakfast and lunch, and even daycare or pet care.
In the wake of the pandemic, Goebel said, many employers offered remote work opportunities to enable employees to work from anywhere during lockdowns. One unintended result of this pivot was more diverse candidates and, ultimately, more diverse teams.
Inclusivity in the workplace comes with many benefits, beyond gaining access to a wide range of expertise and experience. Millennials, specifically, are found to be more engaged when they believe their company fosters an inclusive culture.
Research from the American Sociological Association also revealed that racially diverse companies report nearly 15 times more sales revenue than those with lower levels of diversity.
One often overlooked element of digital workplaces is sustainability.
“Reducing digital wastage can have positive environmental impacts, such as CO2 savings on emissions through more efficient communications, reduced travel, replacing paper with digital twins, rescuing data consulting, etc.,” said Goebel.
Businesses that want to make green commitments can do so with their digital workplace transformation, looking where they can use technology to minimize emissions without compromising on quality.
The office can be a great place to get energized and collaborate with colleagues. But it’s also home to distractions — coworkers who want to chat, unnecessary meetings, background noises — that can lead to wasted time.
Owl Labs' study shows that 57% of people who work independently in a remote location say they’re more productive — and 51% said they’re more creative.
Additional research from Global Workplace Analytics supports this conclusion, with data from companies like Best Buy, AT&T, American Express and others showing a 15% to 45% increase in productivity from remote workers.
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How Does the Digital Workplace Impact Employee Experience?
Employee experience is a major factor in modern business. Happy, satisfied employees are more engaged, more productive and generate higher-quality work. They’re also genuinely content with their position and willing to share, learn and work toward common goals.
The in-office employee experience seems easy to map. But how does it change with a shift to digital work?
According to Happe, there are three lenses you can use to look at the digital workplace’s effect on employee experience: behaviors, empowerment and structural benefits.
Employees in digital workplaces have larger networks, said Happe. They can connect with anyone, anywhere, at any time through the power of digital workplace technology.
People are no longer limited to face-to-face meetings or even a phone call. Now, there’s email, instant message and video calls.
As a result, Happe said, workers are more engaged with executives and more willing to be transparent. Those two elements — communication and transparency — are critical to the success of a business.
The digital workplace enables people to connect. It’s not just that people can behave differently within the digital workplace, it’s that they have the ability to do so in the first place, Happe said.
The digital workplace also empowers employee learning. Workers don’t have to be in the same office sitting next to a person to benefit from their expertise. They can learn from anyone, anywhere. They can even ask a random question — one to which they don’t know who has the answer.
In the end, the digital workplace allows employees to feel seen and heard, said Happe. And that’s something employees who take pride in their work need.
The structural benefits of the digital employee experience allow workers to attain better answers to questions — and quickly.
“They improve their personal networks, so they know more people at the organization, which means they can get more done and have more opportunities,” said Happe.
Employees also get better professional development. For example, you can follow people online who aren’t explicitly your mentor but who you still learn from. “It exposes you to knowledge that you didn’t even know you needed, but it’s helpful. It gives employees new ideas, and it increases their trust and confidence in the company,” Happe said.
What Are Some Best Practices for a Digital Workplace?
You know the digital workplace definition and the benefits of digital work. Now, let’s cover the best practices that allow a successful digital workplace to function.
Create Value for Employees
Employees communicate, engage and share when there’s value in it for them, said Happe. “You’ve got to generate value for the company, obviously, because you’re investing in something, but you also have to give the individual employee something back, and it can’t be transactional," she said.
That value for the employee might be helping somebody out, gaining exposure or getting access to new opportunities. Or it could be something else entirely.
“You need to find out what motivates those individuals, and you’ve got to create a strategy that provides a win, win, win,” said Happe. “A win for the company, a win for the employee and a win for their manager or stakeholder.”
Promote Transparency and Comfort
Beyond offering value to employees, Happe said it’s also essential to create a culture of comfort, which encourages employees to engage and share. “You've got to have this culture of forgiveness and compassion and support, where people feel like they can fail out loud as it were,” she said.
Transparency is also necessary because it increases communications efficiency and eliminates waste and confusion, Happe said. And in this large, transparent network, everyone is learning together.
“Innovation, productivity, employee retention — all of those things come from transparency and comfort,” said Happe.
Reduce Digital Friction
Digital friction is the unnecessary effort someone has to put in to use technology. It’s jumping between apps, dealing with failed searches and navigating disjointed workplaces — something that wastes time and tanks productivity.
“Experiencing digital friction of this nature,” said Goebel, “can feel a lot like walking through the Winchester Mystery House," a historic home in San Jose California with stairs that lead to nowhere, rooms without a purpose and doors that open to brick walls. “Recognizing the cost, frustration and toil of difficulties such as these means that a top priority for digital workplace teams is to reduce digital friction.”
The goal, said Goebel, is to create digital experiences that allow employees to do their best work while feeling valued, challenged, focused, secure and supported.
Measure Digital Work's Impact
All companies should have a digital workplace strategy in place that includes measuring the impact of digital work. These measurements can help leadership hone in on what they’re doing right and what might need a second look.
Metrics companies can track include:
- Employee engagement
- Employee productivity
- Employee retention levels
- Software user adoption rates
- Workplace technology return on investment
- Customer satisfaction scores
- Project budgets vs. actual costs
Have a Governance Structure
Because digital workplaces are so complex — spread across the digital landscape and encompassing so many tools and technologies — companies need concrete plans for how to manage them.
Digital workplace governance is a framework that allows businesses to adhere to their regulations, standards, cultures and values. It supports consistency in the user experience, empowering teams instead of impeding them.
This framework includes rules, systems and processes surrounding topics like security, communication, technology and compliance. For example, the framework might address how employees should secure their electronic devices or what channel an employee should use to communicate with a vendor.
The Digital Workplace Is the New Norm
Digital workplaces are no longer just the future of work; they're becoming the status quo. People have spoken, and most employees don’t want to return to the office.
What does that mean for the future of the digital workplace?
It could be a time of evolution, when more companies fully embrace digital workplace initiatives and look for ways to use the tech landscape to their advantage. Only time will tell.