The changing face of flexible workspace against the COVID-19 backdrop: survive and thrive
The COVID-19 outbreak has been behind the tipping over of several underlying principles of our lives, forcing people to reconsider things as they have been. Today, corporates have been compelled to review their requirements for office space more prudently than ever before.
Certain industries have embraced the idea of work-from-home more easily and for a longer-term, while several others are grappling with uncertainties regarding their businesses, recognising the fact that they would require at least some percentage of their employees to return to work sooner. This return-to-work scenario has given rise to several perspectives within the industry.
One of the key expectations regarding office space requirement, keeping in view business constraints, is that the concept of multiple smaller offices spread across the city would receive preference over a consolidated office located centrally. This will help companies in de-densification of their current offices while adhering to social distancing norms.
Additionally, these smaller satellite offices in various locations will be in the proximity of the residences of employees, thereby providing ease of commuting to work.
Thus, these strategies, which are in deliberation to sail over the hardships induced by the COVID-19 crisis, bring into picture the services of flexible workspaces – Would the pandemic usher in measured growth in this workspace segment?
Flexible workspace in the times of COVID-19
While we had already stepped into a modern office era, led by the rapid evolution of technology and shifting priorities of today’s workforce, it eventually took the COVID-19 crisis to reinforce the relevance of adopting dynamic workplace strategies in this changing landscape, leading many companies to consider shifting to flexible workspaces.
Fortuitously for the Indian market, flexible workspace had already made in-roads into the country’s office market and witnessed wide acceptance as a preferred mode of setting up an office. Largely constituting of co-working/managed office space operators, the segment has been growing by leaps and bounds in the Indian office market scenario. In 2019 alone, leasing in this segment was recorded at around 10.5 million sq. ft., up from 8.5 million sq. ft. in 2018, primarily led by Bengaluru and Hyderabad.
It is pertinent to note that flexible workspace includes a gamut of working models, encompassing various approaches such as hybrid/bespoke spaces for teams that require an equitable amount of privacy as well as community presence, business centres and serviced offices for plug-and-play, co-working space for collaborative work in a creative environment suitable for startups, et al.
With the COVID-19 crisis at hand, it is expected that organisations looking at cost optimisation would opt for a flexible work structure where some employees would work remotely while other team members could work from a central location or office.
Walking the tightrope – strategies for the new normal
The COVID-19 crisis presented an unparalleled set of problems that stumped businesses across the world. For flexible workspace players, major risks entailed their long-term rental commitments to office space owners/landlords, while the commitment that their clients had towards them were short-term in nature.
The tight financial predicament ensuing in the wake of the pandemic-led occupiers of such workspaces to reconsider their growth and real estate strategies, thereby creating an uncertain environment for providers of flexible workspace.
With no precedence to navigate these problems, flexible space companies had to come up with solutions that were immensely lucrative to their customers. At the same time, the products and strategies had to be innovative yet sustainable for their businesses as well.
A few such offerings included access to the entire network of their workspace centres with the same contract terms, meeting room credits, day passes, mail handling, printing, scanning, and delivery services. Some flexible workspace operators also offered exclusive admission to their virtual events. Certain firms also chose to offer deep discounts for a limited period of time as part of their strategy to attract new clients amid the ongoing pandemic.
Meanwhile, operators of such spaces have been adhering to government guidelines regarding the containment of the pandemic, as well as adopting adequate measures to ensure the well-being and security of their customers, in a bid to allay concerns regarding the work environment in their facilities.
Evolving corporate plans – flexible working arrangements to complement flexible workspace
At this critical juncture where businesses are considering every option available to stay afloat, and ensure business continuity, flexible working arrangements are being considered as a viable business continuity plan.
Corporates, presently, have been actively contemplating the adoption of flexible working arrangements such as staggered hours for their employees.
If strategised properly, flexible work schedules can lead to positive and profitable outcomes for business including cost savings, increased productivity and performance, as well as retention of talented workforce.
From an organisations’ standpoint, the major advantage of opting for a flexible workspace is that it would enable companies to refrain from being tied to a fixed lease/long-term contracts for office space, given the possibility of future adverse economic events.
It would also lend greater flexibility as market conditions shift, allowing them to increase or decrease headcount with ease. They would be liable to pay only for the workstations that are occupied, thereby promoting cost savings. In present conditions, businesses are more likely to favour paying for only current space requirements on a periodic/monthly basis, rather than commit to future requirements.
Another evolving corporate strategy to bring forth a cost-effective and efficient workplace is the concept of ‘Work from Near Home’. With the government relaxing rules to enable IT/ITeS companies to adopt a permanent Work from Home/Work from Anywhere culture, the decentralisation into suburban business districts and regional offices in non-metro cities will become more popular as teams work remotely.
Since flexible workspace players have multiple facilities operating in several locations in a particular city, they can quickly provide office space to companies that are looking to de-densify their current office. Requisite privacy can also be provided with cabins and dedicated meeting room/conferencing facilities. Adaptability is the key, and with these changes implemented, flexible workspace players can reap benefits even in this adverse situation.
Today, the office is fast turning into a consumer-led product. Given the current uncertainty, flexible workspace is being viewed as a prudent way forward – where the corporate has a formal office set-up, but with reduced real estate costs and overheads.
In times such as these, flexible workspace can provide the required succour to many companies looking at keeping their businesses up and running from an office establishment, with the operation of at least a portion of the workforce.
While flexible workspace has undoubtedly been impacted by the COVID-19 crisis in the short-term, the pandemic curbing its hectic expansion plans, the segment seems to have worked out its mode of survival.
In the near future, with the economy stabilising and the expiry of various offers that were put out during the pandemic, flexible workspace operators will find greater opportunities to increase their market share.
Major operators may opt for strategic portfolio level tie-ups with leading developers/landlords to augment their footprint in preferred office markets. There might even be instances of mergers and acquisitions amongst operators, as they strive to manage operational costs and seek sustainable growth.
Added to this, several landlords are also interested in adding flexible workspace component to their premise; and this may result in partnership arrangements with operators of such space.
Flexible workspace has today earned a key position in the office market scenario, chiefly by the dint of its willingness to offer various levels of real estate flexibility and preferences that work for both tenants and landlords. The future of the flexible workspace segment, thus, remains positive as customers continue to pursue cost-effective, furnished, and managed spaces.
If at all, the fact that large multinationals are now aiming at building more agility into their office portfolio in the wake of the pandemic would only strengthen the segment. Thus, going forward, demand for flexible space will return as occupiers incorporate core and flex models into their business operations.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)