If the COVID-19 pandemic taught businesses anything, it was the need for them to be prepared. Now, to stay truly agile many are looking to flexspace to help them plan for the future
With many offices sitting empty as lockdown orders remain in place across the globe, companies are being forced to consider the financial implications of their long-term, traditional office space leases. The ability to scale up and down has been shown to be invaluable to businesses that need to react to world events. And when business picks up again, many will be wondering if they can afford not to consider a more flexible future.
“Remote work is something we’re thinking a lot about right now,” says Colin Yasukochi, director of research and analysis at the commercial real estate services giant CBRE. “People are right now being forced to do it, but I think some will inevitably stick to working remotely. The question of how many, and for how long, is unknown.”
“A lot of people have discovered that they can work from home now, but that does not necessarily mean that they will want to do so forever,” adds journalist Oliver Ralph in the Financial Times. “If, or when, small businesses get back on their feet, they might be looking for more flexible premises which offer shorter leases… and more options to grow or shrink the space required.”
The trend for more flexible premises was growing, even before the events of 2020. CBRE identified that the market for flexible offices globally was increasing at a rate of around 13% yearly, and that the market has tripled in size since 2006. Meanwhile, JLL was predicting that up to 30% of corporate real estate portfolios will be flexible workspace by 2030.
It’s easy to see why. Global crises aside, there’s a clear financial incentive. The estimated annual cost of conventional office space is £14,000 per desk, based on average standard lease cost for 50 desks over five-year term in New York, London, Tokyo, Sydney, Hong Kong and Paris. And this is where flexspace can help. Rather than having one central office in (an expensive) city centre, companies might opt for multiple, flexible locations in and outside city centres, where research shows people want to live.
There are further good reasons to consider flexible office space – namely the flexible workforce. A 2018 survey by Deloitte showed that flexibility (in terms of working hours and location) was the third most important factor to young workers. Half of Millennials and 44% of Generation Z described it as ‘very important’ when choosing whether or not to work for an organisation. Following the pandemic, with many now having had a taste of working remotely, it’s likely this figure will grow.
Finally, choosing flexible office space – particularly of the co-working variety – might even help communities and regions recover faster, suggests Dane Stangler, Director of Policy Innovation at the Progressive Policy Institute (PPI), writing for Forbes. “Just as important as economic impact is the community dimension. That will be critically important for recovery and rebound,” he says.
“As we move into a future defined by some ever-present level of social distancing, community ties could fray… [leading to a situation] which will be hard to restore,” he adds. “Entrepreneurs, business owners, and workers will need social networks and local connections more than ever.”
Now, more than ever, flexible workspace can help meet the demands of a new age of work. Give your company maximum agility with real estate solutions designed around your needs. Explore the full list of IWG’s solutions