The global impact of the COVID-19 pandemic has shifted the way we think about work, forever. And the evidence is clear: organisations need to act now to protect themselves against future uncertainty.
One particular area of interest for many will be their long-term, traditional office space leases. During COVID-19, these became a pain point for many businesses, as lockdown orders left HQs expensively vacant. With business picking up again, many companies will be wondering if they can afford not to consider a more flexible future.
The ability to scale up and down has been shown to be invaluable to businesses that need to react to world events. “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,” says journalist Oliver Ralph in the Financial Times.
And 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.
Following the leaders
For examples of how to make it work, it’s worth looking to America’s tech companies – many of which have changed how they operate following the pandemic. Twitter’s founder, Jack Dorsey, has been an advocate of remote work for a while, and suggested in February, pre-pandemic, that the company might take steps to support a more global, remote workforce.
Companies with flexible workplace policies already in place found it much easier to deal with the ramifications of the pandemic. Automattic – the company that powers 35% of all websites on the internet today –had in place a 1,170-person team distributed across 75 countries and was already paving the way for remote work culture pre-crisis. Employees don’t share an office or use email – instead relying on chat and an internal blog with its own version of a Google Alerts system.
The growth of flexspace
Before the events of 2020, the trend for flexible office space was growing. CBRE identified that the market for flexible offices globally was increasing at a rate of around 13% yearly, while JLL predicted that up to 30% of corporate real estate portfolios will be flexible workspace by 2030.
Fast forward to present day, and this growth shows little sign of slowing. While, pre-COVID-19, working from home was seen as the holy grail of working environments by many, a few months of the reality showed its limitations. Flexspace offers a solution – not just for individuals looking for a place to work, but for businesses, too.
Because many businesses are unable to predict their future office needs, they are naturally unwilling to commit to the types of leases demanded by traditional landlords. This makes flexspace a far more attractive proposition, since contracts can be adapted to suit, from the sole trader booking a meeting room for an hour to the company renting an office for a couple of months.
And flexspace is not only flexible in terms of the length of the lease: floorspace can be adapted to suit different ways of working, from a private room for quiet contemplation to the breakout space required for informal get-togethers.
It’s important to note that flexspace isn’t just for startups and small businesses. It’s often large corporations that prove to be nimblest when it comes to acquiring new workspace for specific teams. Pre-pandemic, software giant Oracle decided to replace their development team’s open-plan office in favour of a Regus property that offered more privacy: “We have the option to choose closed offices or open-plan, depending on what the local team requires,” said Thierry Leservot, who manages the company’s property needs in France. In the brave new world of work, it’s likely that other businesses will also follow suit.
Businesses need more agility. 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.