The majority of the world’s population is affected directly or indirectly by the use of office space.
Every individual works for or knows someone that works for an office-based business, or they use goods or services that have been created by an entity that occupies office space.
The global Covid-19 pandemic also affected every member of the population.
Many office-based businesses found that, during lockdown periods, they could continue to survive, and many found that they could thrive, without the use of an office.
For this reason, the collective business world is now re-evaluating its usage of physical office space.
Office space is amongst the top 3 costs to most businesses, along with payroll and IT, and it is imperative to a business’s success to get all 3 correct.
Businesses are looking to recoup losses experienced during the pandemic and to create revised future-proof operations models.
And many employees are demanding increased levels of flexible working within their contracts, through full remote work roles or hybrid working.
Payroll, IT and office space are interconnected and there is now an opportunity to add more flexibility to working practices – in the forms of remote and flexible working, and in the strategic use of office space – through hybrid working.
Remote work and hybrid working are by no means new – models were first conceived in the 1970s, although the technology was not available, at the time, to fully support them.
It was trialled by many businesses in the 1990s, however, it was still not fully practical – a 1-hour video call cost the same as a high-end laptop today (£1,500/$2,000), for instance.
As IT developed, remote work was increasingly trialled by businesses with varying levels of success and adoption – however, even in the run-up to 2020, it was still seen as somewhat of an employee perk.
And a survey in 2018 found that only around 3% of American employees worked from home more than half of the time.
The enforced lockdowns brought on by the pandemic pressure-tested remote working practices as well as the IT available to businesses in the 2020s.
Now, video conferencing is practically free, file-sharing and email is now in the cloud, most employees have a home pc, tablet or smartphone, and domestic broadband is the fastest it has ever been.
Businesses are looking to capitalise on the findings of this enforced homeworking experiment, create efficiencies, improve employee well-being, and remain competitive.
Traditionally rented office space can be difficult to experiment with – the average lease length is 6 years in the UK, for instance.
Businesses are now looking to the flexible office space market for workspaces with which they can trial new operations models.
The flex space market has been building for the last 40 years, seeing a great acceleration in the decade following the Great Recession.
The flexible office space offered by this market offers ready-to-go solutions that act as testing beds for new working models, so the pandemic has created a further catalyst in its growth and adoption.
It is difficult to recall a time when the office space industry received so much mainstream media press – many headlines, during lockdowns, proclaimed that ‘the office is dead’.
It is certainly not dead, but it is changing, and it is becoming more flexible.
Why We Have Created This Course?
Getting the office space and the workplace operations of a business correct is critical to its success. As the business world goes through a process of re-evaluating how it uses physical office space, there are a growing number of considerations.
The pandemic reminded us that elements of certain businesses can be run remotely, and businesses are now looking at how much of their operations can continue to be run in this way in post-pandemic times.
The technological advances over the past 30 years have made remote working and hybrid working less of an idealistic possibility but now an undeniable reality if a business wishes to use them.
The socioeconomic responsibilities of businesses, of all sizes, are becoming increasingly important and visible. Including how environmentally friendly a business is as well as how it looks after the mental health and wellbeing of its people.
Businesses are now juggling how to balance elements of flexible working, remote working and in-office work, and how this aligns with their long term commercial real estate strategies.
Flexible office space options are being increasingly utilised by companies of all sizes as testing grounds for new operations models.
With the growing number of workspace options available to a business, as well as the increasingly large grey area between traditionally leased office space to rent and flexible office space options, it is important to understand the nuances between the formats.
As a flexible office space agency, it has always been important to us to be one that is regulated by the Royal Institution of Chartered Surveyors (RICS). We were the first flexible space broker to be regulated by the body and remain the only one that is.
It was important because even when we were founded, in 2009, there could be a lack of clarity about how rented office space differed from flexible space options.
It was important that we could help companies efficiently and accurately understand the differences between the two formats and appreciate the differences in the pricing structure, entry procedure, ongoing property management requirements, the obligations of all parties, exit protocols and other elements.
The flexible workspace industry has seen exponential growth over the last decade following the Great Recession, and this trajectory shows no signs of blunting. The events created by the Covid-19 pandemic further increased appetite for flexibility.
The increasing number of office space options available to businesses is a major positive, however, there is an increasing number of crossover points between different methods of occupation, creating a grey area that is growing in size.
Businesses increasingly see space that is advertised somewhat ambiguously as ‘flexible office space for rent’, ‘flexible workspace for lease’, ‘office space rented on flexible contract terms’, ‘flexibly leased offices‘ and other variations. These phrases can be somewhat confusing because, as we explain in this course, flexible office space is not ‘rented’, in the true definition of the term.
There is also a growing number of online platforms that offer direct access to flexible office space options. These are often highly efficient but don’t always provide commercial real estate consultancy services that allow a business to make a fully informed decision about one of the most important elements within an entity’s business model canvas.
Whilst this course in no way constitutes commercial property advice, it does provide an overview of the office space solutions available to a business, how they work and how they differ.
It has been created as a starting point in learning about the office space market and the increasing number of options, and nuances, within it.
What You Will Learn on This Course:
- How traditional leased office space works.
- We will examine what flexible office space is.
- We will define serviced offices.
- We will define managed offices.
- And we will define coworking spaces.
- We will discuss the fundamental differences between leased offices and flexible office space.
- We will discuss how flexible office space is priced.
- We will examine hybrid working and hybrid workplace models.
- We will discuss the importance of seeking professional advice from brokers and solicitors or lawyers during the office space acquisition process.
And it will signpost further resources and information that will aid further learning about this growing industry.