What is the Future of Work?
The way we work is changing, and as a result so are the spaces we work from. Discover what our CEO, Paul Salnikow, sees for the Future of Work.
Why the world’s biggest companies are turning to flexible workspaces
The way people work is changing, and as a result so are the spaces in which they do so. The traditional office used to be viewed as the font of all productivity: occasionally organisations allowed a select number of staff to work from home – but seldom was there a middle ground. That is, until the myriad benefits of flexible workspaces became apparent, and the somewhat black and white choice between office-based and remote working began to change. Technology, employee satisfaction, and wellness are only some of the factors that have caused a shift in focus to the overall office experience and the role that plays in productivity, and now more than ever organisations are turning to flexible workspace providers to help them adapt to this “new work normal”.
“What we’re seeing now is a re-evaluation by organisations of their office strategy,” says Paul Salnikow, Founder and CEO of The Executive Centre (TEC), Asia’s largest provider of premium flexible working spaces. “The current market uncertainty is creating huge demand for the flexible workspace sector as companies try to manage costs and become less willing to commit to long-term leases.”
For 26 years TEC, whose clients range from SMEs to some of the world’s top companies, such as Facebook, Pfizer and Morgan Stanley, has been emphasising the many benefits to businesses of flexible workspaces. Not only do companies no longer need to be tied to a fixed lease, meaning they can enjoy greater flexibility as market conditions change, but they only pay for the workstations that are occupied. This makes the space they use far more efficient, given they can add or subtract headcount with ease, and leads to immediate cost savings: businesses are only paying for what they need now, on a month-by-month basis, rather than what they may need two years down the line.
The Covid-19 pandemic may have brought the shortcomings of both office-based and home-based working into sharper focus, yet TEC knew long before the pandemic hit that the very anatomy of office culture needed to change.
“On the one hand, people are being forced to work from home and organisations are realising they can be productive,” says Chelsea Perino, Managing Director of Global Marketing & Communications. “On the other hand, people who thought working from home would be great are now recognising that the office plays an important role, not only in terms of infrastructure but with regards to relations with co-workers.”
The financial advantages aren’t the only reason for companies to change tack – equally important is the satisfaction of staff. Flexible spaces allow for a stronger social element to the working day, leading to enhanced employee wellbeing and better productivity. So much of our time is spent at the desk, and businesses are coming to recognise not only that employees now desire something more than the formal and rather impersonal office that has traditionally been par for the course, but that they can still be productive when not in the office.
One of TEC’s clients, UBS, which holds a pivotal position in the economies of Asia-Pacific countries, saw the quality of service being offered by TEC, particularly in its IT and security compliance, and took it on as the only provider to match UBS’s high standards. TEC was able to design a private workspace in Singapore exactly in line with UBS’s specifications in the United States, and the process has become an exemplar of how a major global company can successfully integrate flexibility into its workplace strategy.
Despite the clarity the pandemic has given to the drawbacks of our existing working culture, Salnikow is quick to make clear that enthusiasm for the idea of flexible remote working spaces had been gathering momentum long before Covid-19 hit, and will far outlast it.
“Everyone wants to grow their business but it’s difficult to predict exactly how that’s going to happen. Partnering with a flexible workspace is a financially responsible way to allow your business to grow in unpredictable times,” he said.
As an illustration, a company renting a 30-person office has a goal of doubling its workforce to 60 within six months. But it is by no means certain that its ambition will be realised – there’s a chance, of course, that its workforce could shrink – and so signing a lease on a 60-person office makes little sense. A flexible workspace allows you to pay for 30 people now, and when the number climbs to 40 people, and then 50, you add additional workstations. Moreover, with flexibility, a company generally commits only to a one-to-two-year lease, whereas traditional office spaces generally demand a three-to-five-year lease. The risk, therefore, of committing to a larger floorplate to accommodate for anticipated but uncertain future business growth is mitigated.
“As the economic landscape continues to change and companies continue to focus and specialise, companies need to be sure they are managing their offices to best support their business. Every healthy multinational business needs to consider what mix of traditional and flexible is right for its teams and their work,” Says Todd Liipfert, Senior Development Director. “Sales teams who need to work both remotely and in many different places will benefit from flexible access to broad networks. Creative teams that use the office as a place to brainstorm and spark ideas need more permanent or fixed spaces.”
This inevitably raises questions of what purpose the traditional office now serves, and how the landscape of the workplace will continue to evolve in the coming years. Do all employees need to be at their office each day of the working week? Will offices instead evolve to become primarily hosting spaces for meetings?
“Businesses will be asking themselves whether they need a desk for everyone, or whether they can incorporate the idea of remote working into their portfolio,” Perino says. “This means both that they don’t need the kind of real estate they once did and can, therefore, save on their bottom line, and that employees are given greater flexibility over how and where they work and therefore feel more satisfied.”
Liipfert agrees. “Rather than signing large-scale and long-term leases, and then focusing on their businesses, the most aware firms will manage their property like their teams and their data, as an asset.”
Much of TEC’s vision for the future of the workplace centres on a shifting version of the classic hub-and-spoke model, whereby a main office acts as the central hub and regional branch offices the spokes. As the culture around office working evolves, those spokes are gradually becoming similar to the flexible working sites that TEC has developed across Asia.
“With this model you see the efficiency that is built when you’re taking out things like travel time, while you’re also only paying for the real estate that you actually need,” Perino says. “In times of economic crisis like we’re seeing now it’s difficult to get out of those long-term leases. Companies are downsizing but they’re still having to pay for offices inside of which large spaces are empty.”
The current crisis merely brings to the fore something that should be baked into every company’s growth strategy: planning for uncertainty. Vast resources are wasted on paying off leases for real estate that businesses simply don’t need. Flexible working spaces are a vital way of ensuring that no longer happens.