While many forward-thinking companies embraced flexible scheduling years ago, others resisted, concerned it would hurt their company culture or productivity. Now, with the undeniable impact of the coronavirus pandemic, organizations recognize flexible office space may be the best and most economical way to meet the needs of their workforce.
Here’s what you need to know about flexible office space and how to use it to your advantage.
For years, employees have been asking for more flexible work arrangements — like the ability to work from home or modify their schedules around things like childcare and rush hour. Before the pandemic, 80% of employees wanted the option to work remotely at least some of the time, according to a 2019 survey by Owl Labs, with a quarter of respondents willing to take a 10% pay cut for the perk.
For the past few decades, business leaders have wrestled with the concept of remote work and whether it’s beneficial to their bottom line. Some worried employees would be less productive, while others worried about wasting all the prime office space occupying a massive chunk of their budgets.
Others blamed remote work for declining sales, assuming the only way to right a sinking ship was 100% in-person collaboration. For example, in 2013, former Yahoo CEO Marissa Mayer made headlines when she abruptly ended the company’s remote work policy, demanding all employees return to the office.
“The problem with these policies is they do not take into account how [remote working has] emerged as a top driver for employee satisfaction in the last ten years or so,” says Cord Himelstein, VP of Marketing for Michael C. Fina Recognition, in an article for SHRM. “They also make the fatal mistake of simply delaying the inevitable. Younger generations confidently know they can be anywhere virtually. The telework genie is out of the bottle, and in a lot of ways, there's no putting it back."
But even in cases where businesses embraced and supported remote work, one question remained: how could organizations provide space for much-needed face-time without wasting money on unused office real estate?
For many, the answer was coworking spaces.
In the U.S., the number of coworking spaces exploded from 300 in 2010 to 4,000 in 2017, according to data published by Statista. They became the model for the flexible office space movement, with trendy, open workspaces and a laundry list of amenities, like complimentary snacks, espresso bars, and fitness centers.
Other flexible office space solutions included hot desking, where all workspaces were unassigned and available on a first-come, first served basis. While the concept had good intentions, it was met with resistance from employees who complained about having a hard time finding an available place to work each day or frequently getting stuck with the least-desirable spaces.
It also made it difficult for workplace leaders to gain insight into office space utilization because there was no record of how many desks were actually being used each day.
Office hoteling was a more controlled alternative that required employees to reserve workspaces in advance. While this helped solve the planning problem, it gave employees less flexibility, making it more difficult for them to reserve spaces at a moment’s notice.
The truth is, we were already headed toward a future of flexible work arrangements and flexible office space — the pandemic simply sped up the transition.
After several weeks of working from home, 69% of corporate real estate pros said their company would require less real estate, according to a survey from CoreNet Global conducted in late April 2020.
This data echoes survey results from Gartner, in which 74% of CFOs said they planned to reduce office occupancy.
In May, Twitter announced its employees have the option to work remotely as long as they wanted, while Facebook and Alphabet said they don’t expect workers to return until at least 2021. What happens in Silicon Valley is often reflected across other global organizations later. So what does this mean for the future of office space after the pandemic ends?
“We need to make real estate decisions long in advance, two to three years, and are in the speculative conversation now if we have 30%, 40% fewer desks,” said Slack CEO Stewart Butterfield in an interview with MarketWatch. “We may make the office more of a hotel.”
Like Butterfield, many companies are considering desk hoteling, a hybrid model that gives employees access to flexible office space while making it easier for real estate leaders to plan ahead.
Desk hoteling allows employees to reserve workspaces in advance or on-demand. It offers the best of hot desking and office hoteling, giving employees flexibility while allowing workplace leaders to plan ahead.
Before the pandemic sent everyone into quarantine, many organizations used desk hoteling to ensure that mostly remote employees had a place to work when they needed it — without spending money on space that often went unused.
Some projections have the majority of non-essential workers re-entering offices near the end of 2020, but a second (or third) wave of increased COVID-19 cases could delay returns even longer. Many companies are adjusting their floor plans for physical distancing, while others wonder if they should scale back on real estate permanently.
JLL’s most recent real estate report notes while the flexible space sector has fallen flat in the past few months due to the coronavirus outbreak, in the near-to-long-term, “demand for flex space will continue to be an important feature.” This is because many real estate leaders are reluctant to commit to big investments or long-term leases with so much uncertainty.
Experts have warned against making quick decisions in light of so many unknowns. The pandemic is still unfolding and we're still learning what the outcomes will be. There are many operational issues to consider and many changing variables to consider, such as timing, duration, severity, and location. Still, companies want to do more than wait and see.
Although the timeline remains uncertain, one thing is for sure: flexible work and flexible office space are here to stay. Here are a few ways you can make flexible arrangements work for you and your teams.
Here’s the hard truth: if you don’t offer your employees the option to continue working remotely, they might leave your organization for an employer who will. Employees are overwhelmed with a mix of anxiety and scarred by the disruption of their lives. Some will continue needing to work remotely for their personal health or family circumstances.
Remote work will be an important element of your future workplace, so you need to embrace it. That might mean updating your remote work policy and adopting technology that makes it easy for employees to collaborate anywhere. Set clear expectations (for example, setting hours when employees are required to be available) and focus on performance rather than micromanaging.
There’s never been a better time to embrace desk hoteling, provided you have the right technology in place. Employees should be able to book desks from anywhere, whether they’re in the office or planning their week. Ideally, they should be able to do this from a mobile app.
This is especially helpful for employees who work remotely, travel often, and may only need a workspace for client meetings, or when their home office becomes too distracting.
If the majority of your workforce prefers to continue working remotely, it can be tempting to consider closing your office space altogether. However, this arrangement isn’t ideal for everyone. Employees with roommates, small children, or those who live in small apartments without a comfortable home office set-up may be finding it challenging to focus. And, many people perform better when they have the opportunity to collaborate face-to-face.
“People will always need, and will be looking for, a place to connect, find community, and to find a purpose,” says Amy Nelson, founder and CEO of coworking company The Riveter, in an article for CNBC. “That’s what brought people to coworking spaces in the first place.”
Coworking can be a good solution for companies who need additional space but are reluctant to commit to a long-term lease. Pinterest used this model as it entered new markets, which allowed the company to grow quickly without large upfront capital investments.
As a new normal sets in, more companies are rushing to adopt technology, flexibility, and opportunities to connect than ever before. Even companies who once resisted flexible work arrangements have a new appreciation for its efficacy.
These flexible office space solutions can give your workplace the best of both worlds—offering greater autonomy for your workforce while reducing capital expenses.
When you begin the difficult work of reopening the office, start by giving employees the ability to personalize, control, and safely engage with their immediate environment. A safer and richer experience will go a long way towards emerging stronger after this crisis.
Learn more about how modern enterprises are rethinking their approach to real estate in our latest whitepaper.
Ann DiPietro is an enterprise sales executive at iOFFICE.