Working from home is indeed not a new concept, at all!
AT&T started to eliminate unused offices in 1991. Three years later, as part of an experiment to explore the extent to which a large organisation could revolutionise the workplace by bringing work to the employees, it had 32,000 employees working from home.
Between 1991 and 1998, this policy saved the company $550 million US dollars at the time, representing a 30% improvement in its cash flow over this period. As noted in the Harvard Business Review, the main reason for adopting the WFH model is the potential economic benefits it offers and the increase in productivity for employees working in alternative workspaces.
I have to go that far back in time to remind our readers that companies have already been trying to reduce costs by optimising their property portfolio for many years.
After more than 20 years of experimenting with the feasibility of working from home, the reason why we are still debating the topic must be because the results have not been very promising. If companies could have their employees WFH without any negative effects, traditional offices would no longer exist today.
This is where flexible workspaces become increasingly vital in the corporate world.
From the perspective of cost reduction, flexible workspaces help simplify corporate operations. A large corporation requires a sizable corporate real estate team to maintain its buildings, and numerous suppliers are also involved in the maintenance and operation of these spaces. By opting for a flexible workspace provider, all of this complexity can be streamlined, and the number of external stakeholders involved in the operation can also be significantly reduced. In turn, the real estate team can focus on enhancing the overall service quality for the company.
In reality, this simplification process has been ongoing quietly for quite some time. Some of these companies choose to maintain a low profile while doing so, primarily because they need to uphold their reputation.
To avoid a debate on remote work and productivity, which is not the primary focus of this article, we will concentrate on how companies are simplifying their operations and cutting costs through the adoption of flexible workspaces.
Many companies have to maintain a large number of nationwide offices in the countries where they operate. These offices are typically small in size, and operators must engage with numerous suppliers, even though they have only a few staff working in each of these locations. A recent trend we have observed in these companies is the shift towards using flexible workspaces as their new locations. This presents a great opportunity for flexible workspace operators with the vision and resources to secure significant buildings in strategic areas, as it guarantees a consistent influx of high-end clients.
Recently, an operator shared with me that in one of the secondary cities where they operate, there is no alternative in terms of representation to the building they manage. Similarly, a few years ago in Dublin, a local business center chain had 90% of the virtual offices in one location. Why? It was because this location offered a prestigious and highly representative address.
When expanding operations to a new territory, corporations have to contend with a multitude of factors. Establishing a new office comes with various challenges, including dealing with customs, regulations, and norms that may be unfamiliar.
Moreover, there's always the uncertainty of whether the operation will succeed. In such situations, opting for a flexible workspace offers the advantage of testing the market without significant risk until a definitive decision can be made. It allows companies to assess the market's viability and decide if they want to establish a permanent presence.
For many companies, the concept of sharing space can be challenging, as both the company and its clients may feel uneasy about having their office located in a building or space with a third-party brand.
However, for clients seeking to eliminate the complexities of office management, especially those accustomed to outsourcing services like security, cleaning, or cafeteria services, choosing a flexible workspace operator to invisibly handle the entire space management becomes the ultimate simplification.
When a single stakeholder is responsible for everything related to the space, it provides the added advantage that it won't impact their accounts in the same way as traditional rentals do.
These are a few examples of potential options for corporations, and there are more possibilities like purchasing volume day passes for their staff to use as needed. However, let's now shift our focus to discussing how flexible workspaces can impact corporate culture.
As we discussed earlier in this article, corporates have been exploring ways to reduce costs and increase productivity for decades. I don’t believe WFH is a feasible option for the vast majority of workers. However, in a time when some US mayors are attempting to encourage the transition from office to remote work due to high vacancy rates and housing issues, I believe that flexible workspaces could offer a third option to help reduce the vacancy rate.
This can be achieved by repurposing unused office space into flexible workspaces. These new spaces could provide employees with a professional environment for work within a reasonable commuting distance, which can address many of the concerns and reluctance workers have about returning to the office.
Flexible workspace can grant workers the freedom and confidence to work while still enabling in-person meetings in a suitable environment. This approach is certainly preferable to the current all-or-nothing strategy and the ongoing debate about how many days per week one must go to the office that no one wants to visit - due to the burdensome 45-minute commute, which translates to 33 hours per month (or more than 15 full days per year) - unless they are required to do so.
Collaboration and user experience are two critical factors that many industries can learn from coworking and flexible workspaces. User experience is of utmost importance in a flexible workspace. If your customers are not satisfied, you risk losing them. However, at the enterprise level, it becomes significantly more complex. Companies must not only provide a workspace but also consider how they manage their employees at the team level, assess their performance, and more.
Hiring office managers with experience in coworking or flexible workspaces can benefit corporations. As they could bring valuable people management skills, excel at organising events, and connect individuals from different departments for improved team building and smoother operations. This expertise helps create a more agile and collaborative work environment, boosting productivity and employee connections.
HQs should also prioritise collaborative work in the office. While individual work can be done remotely, creating an appealing office environment is essential if you aim to bring your employees into the office to promote a sense of belonging and other benefits. If the office commute doesn't offer more than what they have working from home or at a nearby coworking space, employees may not be satisfied.
Provide them with an experience that they can't get while working from their usual locations. I've observed employees who have complained about visiting the company's office only twice in 19 months. Some even pay out of pocket for coworking spaces just to avoid working alone at home.
If you manage real estate for any company, it's time to consider working with flexible workspace operators to optimise your processes and reduce operating and financial costs. This approach will involve not only your real estate department but also finance and human resources. Nowadays, flexible workspaces can offer a comprehensive solution that combines all the services and leverages the expertise of staff to create a space that genuinely meets the needs of its users.
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