The changing demand for office space
COVID-19 has fundamentally challenged and changed the way we, as a global workforce, interact, socialize, and collaborate. Flexible working practices, including working from home, have been readily adopted as the coronavirus pandemic has forced a trial run of remote working for industries, businesses, and individuals across the world. As a result, sentiments towards office space, its value, role, and contribution to the operation of daily work tasks are now being re-evaluated by employees and employers. While the pandemic has accelerated the shift towards integrating flexible workspaces into corporate real estate portfolios, the fear that the office will lose its relevance is not realistic; rather than becoming obsolete, it will become an increasingly valuable asset in facilitating collaboration and driving business growth.
As one of the first cities to shift to a working from home model to curb the spread of COVID-19, Hong Kong is no stranger to the needs of adopting flexible working practices as many in the workforce today have experienced epidemics such as the SARS of 2003. However, as COVID-19 has struck the world internationally, this time the dynamics of work have changed for even larger multinational corporates, and established traditional businesses have been challenged.
Flexible working and the workplace
Many tasks can be accomplished remotely without a significant drop in productivity or quality. While virtual conferencing and teleconferences can provide an intermediate solution to in-person interactions and meetings, over time, face-to-face interaction is required to facilitate collaboration, build relationships, solve complex challenges, and generate ideas.
Most employees, especially those with long commute times, or those that intrinsically travel a lot for their field of work, appreciate having the flexibility and autonomy of having the choice of where and when to work.
On the flip side, many workers have discovered that continuous remote work extends the workday, diffuses work-life boundaries, and can ultimately impact mental wellbeing, working relationships, and motivation.
In fact, from leadership and human resources standpoint, many questions have been raised about a fall in morale for employees and issues of loneliness that arise from long periods of working from home. Moreover, it is easier for employees to collaborate on projects when they have access to better facilities, robust IT infrastructure, responsive admin support, and a highly productive working environment that boosts concentration and minimizes distractions. Conversely, prolonged lack of access to these elements may result in inefficiencies and frustration; as many people that have been working from home discovered, in an environment that is not optimized for ergonomics and productivity, such as a busy café, or a dimly lit bedroom turned make-shift office, productivity is negatively affected.
Companies are now reassessing their real estate needs
While many companies still want the collaborative atmosphere that the physical office provides, they also desire the advantages that flexible practices offer to support remote working for their employees and clients. That being said, the purpose of an office as a space where people can meet, collaborate, share ideas, and nurture innovation is still vital for many businesses. As companies reassess their real estate needs, the function and role of office space is changing; shifting away from a productivity-based model, the office role is evolving to focus on the people – its values comes as a hub to facilitate meetings and gatherings. And this shift isn’t industry-specific. From ‘traditional industries’ such as finance or law, to more creative industries like art & design, communications, advertising, or media, all are rethinking how the office can positively impact their business. With this changing function of the office space, traditional leases with long rental periods are coming into question, and companies are turning to lease agreements that provide more flexibility as a solution to supplement their traditional real estate portfolios.
What to expect in 2021?
To meet the changing demand for office space requirements, a hybrid model is likely to emerge where businesses will take up flexible working practices and flexible workspace solutions to enhance their pre-existing company work culture to balance the efficiencies gained by remote work.
A “hub and spoke” model or “flex-and-core” strategy may become a commonplace approach for businesses of all sizes and industries in the future.
By combining traditional and flexible real estate in a company’s portfolio, employees can benefit from the opportunity and freedom to spend a mix of time in the office and at home – thereby increasing agility, mobility, and flexibility of the workforce. What is more, companies may change the way they take up space; many adopt this flex-and-core strategy to minimize risk when expanding their local and global footprint as we move into a “new normal”. The advantage of this being that flexible workspaces can provide shorter lease terms that can be tailored and negotiated according to headcount and actual space required without having to lock into a long-term inflexible contract.
Industry based shifts
Already we can see examples of MNC clients dividing up their teams into small groups and assigning them across different flexible workspaces to ensure employee safety and to minimize costs. Businesses have shifted away from traditional office models and taken up or incorporated flexible solutions; these industries, such as Information Technology, Financial Services & Banking, Consulting, Real Estate & Property Management, Education, Legal Services, Biotech, and Medical, are all leaning on the flexible model to help future-proof their business. These sectors primarily deal with knowledge-based work, and for their daily operations, a vast majority of their work can be done remotely as long robust infrastructure, connectivity and administrative support are available to link collaborators together.
The rise of virtual offices
Finally, in evidence of the changing sentiments and evolving role of the office space, we have seen a significant increase in the demand for Virtual Offices post-June 2020. This growth has stemmed mainly from smaller companies that have given up their office space and decided to work-from-home long term, and from new companies that have opened during the pandemic and are operating remotely. Virtual Offices provide businesses experiencing uncertainty with a cost-efficient method to establish their professional presence with a business address or “shop front”.
With 2021 approaching rapidly, and the impact of coronavirus and uncertainties seemingly set to continue, businesses will be seeking to reinforce their company, workforce, and portfolios with more flexible solutions to adapt to external changes rapidly. Despite all of these uncertainties, one thing for sure is that the basic social need to collaborate and interact in person will persist regardless of what the future has in store for the evolution and changing demand of the office space.
On the flip side, many workers have discovered that continuous remote work extends the workday, diffuses work-life boundaries, and can ultimately impact mental wellbeing, working relationships, and motivation