Article updated in September 2020.
“Outer-city” locations are the next frontier for flexible workspace – and a competitive advantage for corporations
Most corporate real-estate executives (CREs) are familiar with the concept of flexible workspace and the agility, efficiencies and employee benefits it can bring, compared with the traditional workspace. So much so, in fact, that the sector is transforming the face of the commercial real-estate industry.
What CREs may be less aware of is the ubiquity of ‘outer-city’ flexspace – which is considered the next frontier of the industry. According to The Flex Economy, a report from Development Economics, commissioned by IWG’s Regus brand, the ‘decentralisation’ of workspace is shaping the future of work.
In the report, Mark Dixon, the founder and CEO of IWG, says: “This transformation is characterised by decentralisation, as workplaces move from the large global cities to what we’re calling ‘outer-city’ locations: smaller cities, towns and suburban locations. In the near future, we believe that there will be a professional workspace available everywhere – from the largest city to the smallest village.”
According to the report’s findings, rather than sourcing city-centre flexspace, large companies are increasingly making use of popular outer-city flexible workspace to drive efficiencies and benefit their employees.
“Big enterprises are adopting flexible working policies; moving away from relying on a single, central HQ and increasingly basing employees outside of the major metropolitan hubs in flexspaces,” says Dixon. “Most are doing so to improve employee wellbeing by allowing their people to work closer to home, save money, boost productivity and reduce their financial exposure to long leases following recent changes to accounting standards.”
The Flex Economy outlines the growing trend for companies to deploy a ‘hub-and-spoke’ model as part of their flexspace strategy. Instead of requiring all staff to commute to a single inner-city office, large businesses are using private offices at flexspace locations in outer-city suburbs and satellite towns to supplement their city-centre headquarters.
The hub-and-spoke set-up is helping to grow the industries exploring the potential of flexspace, which has traditionally been popular with mainly professional services. According to the report, industries such as retail, utilities, construction and transport are now enjoying the benefits of basing their staff in new locations.
CRE professionals today are tasked with finding top-of-the-range workspace that helps their clients attract and retain talent. A key finding of The Flex Economy is the positive effect that local flexspace can have on employee wellbeing, as it allows staff to work closer to where they actually live. According to the report, by 2029, global flexible workspaces will have saved 8,415,526 days of personal time thanks to reduced commuting time for staff – enough to travel to the moon and back 1,402,587 times. By providing a local place to work, companies can offer their employees a better work/life balance than any competitors who fail to move in line with the trend for cutting out unnecessary commutes.
The Flex Economy also highlights how cutting commutes also cuts employees’ carbon footprints and strengthens local economies. The report forecasts that, by 2029, 2.56 million metric tonnes of CO2 will be saved globally thanks to fewer commutes, while 3,424,283 local residents will find work close to home (to put it in perspective, that’s the same size as Berlin’s entire population).
These findings give CREs an opportunity to highlight how using flexspace can also help clients work towards their corporate and social responsibility goals – by finding a more sustainable and community-driven way to source and use workspace.
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