We are steadily moving into a post-COVID world. The novel corona virus is not only new for its material make-up, but also for the broad social changes which are steadily becoming custom. Changes such as the standardization of social distancing, the regulation of gatherings of groups of people, and the expectation of limited physical contact which have all but eradicated the handshake have been swift and practically ubiquitous. But what has become widely known as the ‘new-normal’ has not only changed the way we live, it has also radically changed the way we work, both in terms of our day-to-day routines, and also in the context of what an office space can and should bring to a business.
What Happens to the Office Space after COVID?
The way we work has already undergone significant transformations. From an assembly-line set up popular with the Fordism and Taylorism of the last decades to an increase in from-home working through the growth of the gig economy and the workspace revolution which coworking brought with its focus on community. Now that communities need to adapt to the new normal, how will the day-to-day workspace routines be effected?
Outside of establishing new social norms in light of the coronavirus, such as the importance of keeping a safe distance from others, wiping down any surfaces you utilize as often as possible, and a move to the preference of online meetings, it’s likely that much of our work activities will remain pretty stable, albeit with a need for focus on business continuity, consolidation and revenue generation. The administrative burden to keep the office space as safe as possible, however, will be significant. Standards have already been established and are constantly being improved upon through measures such as headcounts within certain spaces is capped, temperatures are being checked at entry, and even contact tracing through access cards should any colleague call in sick. All of this extra administration comes at an extra cost at a time when cutting costs and improving liquidity are fundamental to business survival, creating a conflict between the mitigation of health risks and business risk. Whilst health risks should undoubtedly take precedence, casting more visibility on the future of the business and making it more capable of handling the blows which economic uncertainty surely brings must not be neglected.
Flexible Workspace as Office Space that Works for You
The benefits of flexible workspace agreements have been sung by coworking centres for a long time. They have also been the source of scrutiny in terms of the viability of the flexible workspace market, due to the risks being taken on by such centres in their members stead by holding long-term leasing agreements to properties and offering short-term agreements to members, thereby alleviating their risk-burden. In the early days of the post-COVID world, coworking and flexible workspaces will take a significant hit as their many members look to achieve the risk mitigation mentioned above. However, in truth, it seems that the flexibility and alleviation of risk which flexible workspace provides could not be more needed. Long-term leases have been the hardest cost to reduce for SME’s, and whilst there are certainly many landlords who have provided breathing space with rent deferrals or temporary discounts, it is also certain that they will be very unwilling to cancel the long-term contract. Flexible workspace not only makes this possible but builds a USP around this very capability.
Furthermore, serviced offices, or managed office spaces, nullify the burden of the back office work which falls upon the same company administration whose workload has increased due to new COVID-19 measures. This not only allows such companies to focus on their core competencies, but also providing a single point of contact for office space queries, a streamline of suppliers, increased general efficiency, significantly decreased cost, and increased visibility. They also shift the burden of establishing post-COVID world standards and health compliance monitoring onto the management of the serviced office space.
Serviced and flexible office space solutions are often cited as ideal for a start-up looking to test our their concept, but in the current economic climate, with uncertainty turning many established businesses into relapsed-startups, the value of flexibility cannot be understated. Therefore flexible office space has become appealing to a broader section of the economy.
What is a
A Flexible Workspace is an office space that offers flexible arrangements to tenants. As opposed to more traditional office space leasing, such agreements allow for short-term leases and flexibility on scaling up or down in size. Such arrangements are generally beneficial to startups looking to lower their risk and exposure whilst maintaining focus on their business.
How Can Serviced Office Space Mitigate Risk and Lower Costs?
The irony of any long-lease predicament in which companies find themselves today is that the solution and potential mitigation of the risk that comes with such long-term commitments were available pre-COVID, and has been available for a relatively long time. What’s more, is that this solution is available at a lower overall cost.
Today businesses are forced to recognize the fact that they need to be as flexible as possible for their success. The value of a flexible agreement is now blatantly obvious, but the overall cost-effectiveness of this flexibility is often still to be recognized.
Because of the flexibility of agreements and profiles of members, serviced offices often have a significant amount of space vacant for immediate use. As these offices are readily furnished and offer a sort of plug-and-play usage and connectivity, companies can move-in and get straight to business within the same day, meaning that the overall operational downtime is practically zero. This flexibility also allows companies to add to or reduce space at short notice in accordance with business needs, whether that’s for a day a week or a month. It also allows businesses to scale down, permanently or temporarily, so as to improve their risk mitigation.
2. Cost Benefits through Shared Office Space and Services
Perhaps most tangibly, the monthly charge out for serviced offices is often inclusive of rent, rates, utilities, cleaning, maintenance & security, IT, and use of several services and amenities, the cost of which is shared between community members. Whilst some such spaces offer add-ons which may raise the overall monthly cost, agreements with a stable and non-variable cost are also available. This gives predictability which lowers uncertainty and therefore also lowers risks. Furthermore, cash flow can be improved given the monthly payments as opposed to the more traditional quarterly payments for commercial rental properties.
Serviced and shared office providers also often allow members to share into the meeting spaces, meaning that the cost of the equipment and other resources is distributed amongst several individuals, rather than centralized onto one business which scarcely makes use of the facilities sporadically.
3. Focus on what your business needs
When the management of office space is centralized onto one administrative team, the focus on core business and activities which members of the community can achieve is a tangible cost-saving. At a time when the fluidity of the economy brings with it the need for an ‘all hands on deck’ approach towards business development, whether through business model or product and service innovations. The bottom line is that no business should focus on office administration and management unless they’re in the business of doing so.
Flexible Workspace and Serviced Offices Help Mitigate Risk
Running an office space is a very expensive affair. From the numerous costs to consider, including procurement, services and service provider management, IT infrastructure, office furniture, equipment, etc., the capital expense and running costs can be a significant hit to the businesses’ bottom line. More importantly, all of these are noise when compared to the primary aim of running a sustainable and successful business. With a flexible workspace agreement, these responsibilities are taken care of with assurances of furnishings, facilities, and security, freeing businesses up to continue their important work on business development, product innovation, or business continuity.
The implementation of change, whether brought about through abrupt market changes or otherwise, can in itself be a highly risky, expensive, and resource-intensive activity. Time and money get spent on doing things that are necessary, but unproductive towards what the business actually needs. Whilst downscaling an office space may be fundamental to consolidating the business and its future, the burden it brings need not have to be such a cost in itself.
Serviced and shared offices are enablers of such change, facilitating a seamless move from the previous office spaces towards a new flexible workspace. They provide a tangible opportunity for risk mitigation, as well as access to invaluable knowledge and local networks. The serviced office and flexible workspace sector has evolved into a fast-growing sector because of the value which the offering brings to the global commercial property market. This same value is likely to make such workspaces fundamental to our adapting to the new normal.