Managing your flexible office space alongside your longer-term portfolio
With corporate real estate (CRE) being one of the biggest operational costs for large organisations, there is a strong incentive for portfolio managers to create the best possible value for money. Traditional leases restrict a CRE professionals’ scope as they are inflexible, lack service and don’t account for future demand. This in turn can limit a business’ ability to grow. So, how can this be mitigated? The answer is flexible space.
Larger corporations are predicted to increasingly adopt flexible spaces in the next three to five years as businesses of all sizes see value in a mixed portfolio. Many of the restrictions of traditional leases can be addressed by flexible office space. Flexible doesn’t only relate to the workspace – a flexible space agreement also allows businesses to be more agile in their portfolios. Flexible offices are almost always fully serviced, allowing tenants to focus resources elsewhere and manage the whole space through one monthly bill. As existing operators continue to expand and new operators enter the market, the flexible space industry continues to evolve, providing an even wider range of viable value added alternatives to conventional space.
However, the utilisation of flexible space has many more benefits than the obvious of cost reduction and flexible agreements.
Providing room for innovation
Workplace design has long aimed to improve worker productivity and research is streamlining the process and raising interesting findings. According to The Brookings Institute, the nature of innovation is changing and becoming increasingly collaborative. Good workplace design is facilitating this both in corporate occupied conventional space and flexible space. However, the flexible space providers are leading the way in pushing back the boundaries in terms of collaborative space design.
Flexible spaces are great for innovation within a business and between companies. Open plan spaces enable greater collaboration between teams and encourage face-to-face communication within an organisation, whilst coworking aids innovation by allowing for the sharing of ideas between organisations. It’s for this reason that some corporates are opening up their spaces to start-ups and SMEs within their industry.
Improving employee satisfaction
Research has confirmed what any good employer already knows: that there is a positive relationship between job satisfaction and employee performance. High satisfaction also helps to attract and retain talent. Employee workplace experience is defined first and foremost by the physical workplace. This may be a matter of creating a well-designed workplace with the right variety of locations for carrying out different styles of work. Satisfaction can also be boosted by something as simple as having a short commute. On-site facilities, environmental quality and cleanliness, and having provisions such as good coffee and places to buy good, affordable food all have an impact.
When managing CRE, it is vital to ask the employee base what matters most to them in order to create a suitable workplace. Flexible office spaces can often offer provisions such as food and drink that managers of traditional offices are unused to sourcing. Coworking spaces can also offer some distant employees the chance to reduce their commute without having to work from home. Organisations increasing employee satisfaction can expect to see an increase in financial returns through greater productivity, efficiency, innovation, lower rates of absenteeism and much more.
Growing flexibility
With the rapid pace of change in today’s workplace, businesses are increasingly trying to become more agile. It may be that the workforce fluctuates in size or that there is a benefit in being closer to certain clients. Flexible space gives companies the ability to adapt to unseen changes and avoid being locked into a property that is no longer fit for purpose. With some flexible spaces being open 24 hours or at least having manned desks for large portions of the day, these spaces can also create flexibility for staff who prefer to work outside of traditional hours. For these reasons, many corporates are seeing the long term benefits of flexible space.
Still a young market
Looking for flexible spaces may be a novel experience; with so much more on offer, CRE professionals need to understand the needs of their workforce and be discerning in their choices. Once the decision is made, any office reorganisation takes time and energy, something which can be off-putting to those who have yet to move into flexible office space. However, by their nature, these spaces are far easier to move into and out of. Since services are already taken care of in flexible offices, companies can focus on personalising the space for their teams.
In the UK, London has overwhelmingly seen the greatest growth in flexible office spaces, and significant growth in the other ‘Big 6’ cities means the sector’s value is likely to increase. Flexible space is appearing both in city centres and suburban areas as companies look to strike a balance. Having a variety of locations can be a big plus for employees, who have more options on where to work from and the possibility of cutting their commute.
The market is still taking shape as new competitors enter it. As it does so, it is becoming increasingly clear that this style of workplace is here to stay. A more mature market will see more CRE managers appreciating the numerous benefits that mixed portfolios have to offer.
It starts with people
Whatever combination of traditional and flexible offices make up a corporate portfolio, it is important to remember that the priority is creating a workplace that maximises employee happiness and performance. Flexible space is a wonderful way to achieve this, and it comes with a range of other benefits such as future-proofing the business and creating value for money.