When considering how to attract and retain talented “Bright Young Things”, not only must you consider remuneration policies, flexibility and freedom, challenging work and personal development opportunities (amongst other factors), you also need to take into account the physical environment in which they will be working. (Yes, these “young snots” DO want it all – they DO want everything to change. In fact, they’d probably settle for a lot less than we often suggest, BUT, if you want to become a legend to them, and attract and retain the cream of the crop, then you’re going to have to overhaul everything!).
In a well thought through contribution in the Harvard Business School ‘Working Knowledge’ series, Thomas Davenport explains “Why Office Design Matters“. The article comes out of a research project aimed at understanding the link between office design and performance on knowledge workers. I would personally like to see the researchers overlay some of our understanding of generations, as well as insights into the changing values of younger talented staff, onto their research. It would be great to know if some of their comments (especially, for example, the last one below) have a generational bias on them. However, the article is still worth a good read.
The bullet point summary is:

• Knowledge workers prefer closed offices, but seem to communicate better in open ones.
• Knowledge workers congregate in particular geographical areas – i.e. they are drawn to, and are made more productive by living in, cities and regions with concentrations of other people like themselves.
• Particular designs can encourage certain types of behavior, although they will never guarantee it.
• Knowledge workers move around in the course of their work. They need mobility and spend a lot of time out of their offices.
• Knowledge workers collaborate. They meet, they chat, they congregate. Office environments need to facilitate the collaboration and exchange of tacit (hard to express in explicit written terms) knowledge.
• Knowledge workers concentrate. This requires a quiet setting with relatively few distractions.
• Knowledge workers work in the office. Despite many years of discussion about telecommuting and telework, a very small percentage—some studies suggest 5 percent—of workers do “serious” (full-time or near-full-time) telecommuting, and a good proportion of those are administrative workers rather than knowledge workers. Knowledge workers, like all other types of workers, like flexibility, and they like to work at home occasionally. However, they don’t want their homes to be their only offices. They know that to be constantly out of the office is to be “out of the loop”—unable to share gossip, exchange tacit knowledge, or build social capital.
• Knowledge workers communicate with people who are close by. Companies should design work environments so that knowledge workers who need to communicate are physically close to each other.
• Knowledge workers don’t care about facilities gewgaws. At least there is no evidence that anyone ever took a job, stayed at a job, or worked more productively because of foosball, pool, or ping-pong tables, cappuccino bars, office concierges, hearths, conversation pits, quiet rooms, lactation rooms, creativity rooms, relaxation rooms, nap rooms, etc., etc. In these lean and mean times, many workers are even reluctant to be seen using these facilities for fear that they won’t be considered hardworking enough. In any case, there’s no clear relationship between knowledge worker performance and various appealing features of the work environment, though they may help slightly with recruiting or morale.