The impact of the Coronavirus pandemic on the flexible workspace industry has been huge. As people slowly plan their return to the workplace, we know that there are likely to be some immediate changes, as well as other ongoing ones, to the industry.
What changes do you see happening in the flexible workspace market?
D: It goes without saying that in the very short-term there will be a huge focus on social distancing. Operators will need to take responsibility to make sure their teams and members are safe in the office, by implementing measures to ensure proper social distancing.
There will almost certainly be reduced hot desking as a result of people deciding to work from home more.
E: There will be challenges for coworking providers in how to get their members back into spaces safely, and give them the confidence to return. This has been our priority, and all of our spaces are now set up with full social distancing measures.
I’ve been hearing different views on how long these distancing measures are likely to last. Our focus has been on applying flexible measures so that when the government changes their distancing guidelines, we won’t require a full rework. We can only work on what we see and right now and the transition back to the office has been slow from our members. We’re expecting to see that change over the coming weeks, especially with non-essential retail just opening, which should give people some confidence.
What about long-term? Will things change again?
D: I am really positive for our sector. We are expecting to see more and more businesses move into coworking from traditional space as they look to reduce their square footage and engage with more agile ways of working for their teams.
E: In think that demand for flex workspace in the medium and long run is more difficult to predict. What we can see is that sales over the last couple of weeks are picking up, and people are starting to consider what post-COVID might look like for them. My view is that for every business moving away from flex, there will be those that move to flex workspace for other reasons. We have seen walk-ins taking offices as they can’t work productively from home, and others who were working internationally, and whose travelling schedules have all but cleared now.
Many businesses looking at pure WFH remote working models haven’t fully considered what this means. While no doubt remote working can work and many have shown they can work effectively in the short run, this will be a mistake for many businesses not set up correctly with the right management processes. I can see lots of businesses realising this doesn’t work for them 6 months down the line and moving back to an office model for their teams.
I’m optimistic in the medium to long run that people will come back to the office; maybe not in the same form, but they’ll be back, and the demand for flex will increase.
How might the functionality and design of coworking spaces change?
D: We certainly expect to see big changes around usage, driven by social distancing. As Elliot mentioned, we’re taking steps to ensure proper social distancing in our workspaces; including replacing hot desking with dedicated desking, installing sanitiser stations around our spaces, and providing the live occupancy status of each of our spaces online.
We expect to see coworking become key to providing collaboration space for businesses, so there will potentially be a need for more meeting spaces. We are also expecting to be required to deliver video conferencing facilities, as more businesses operate agile working arrangements and have a more dispersed team.
In future, I don’t see juristic changes in coworking design as they are designed around collaboration. For those businesses that look to work in a more agile way, they will require space that allows them to do that on an ad hoc basis.
E: I think the office of the future will need to attract people more than ever before to come to the office to do things they can’t do at home. Coworking spaces will need to keep upping their game in terms of workspace design and the end-to-end experience for members to exceed expectations.
It’s no longer enough for employers to assume that their teams will show up at 8.30am on a Monday. With the WFH stigma fully broken down, the choice will often be in employee’s hands of where and how they work.
Great coworking spaces will provide the range of environments and working formats that the home simply can’t.
Will there be any new needs that coworking providers will have to meet?
D: For now, (until we have a vaccine) there will undoubtedly be a heightened focus on safety.
Moving forward, we will need to enable businesses to work in a more agile way. That means offering video conferencing facilities so people can connect with their teams effectively, and offering more flexible memberships than ever before.
One of the major benefits of coworking has always been flexibility – 1 month terms (vs minimal 2/3 year terms in traditional office leases), plus the benefit of no fit-out costs, or costs for extra amenities. This will become even more crucial to businesses in the coming months as they look for workspace options with the most flexibility.
E: Many businesses will look to their employees to understand what they want to do and whether to return to the offices.
Everyone will have different risk preferences and attitudes to returning to the offices. People will look to coworking to provide the safety standards of course, but also flexibility. As David mentioned, we’ll need to provide more flexible memberships, like timeshares or the ability to choose which days to take a private office.
And for those businesses who make the decision that they don’t need an office at all and that their teams can work remotely, they’ll need – more than ever – spaces for their teams to come together to collaborate in locations convenient for them.
Our Flex membership and meeting room packages offer businesses just this; the ability to take a bundle of hours that their teams can use as and when they need.
Will there be a shift in the types of companies occupying coworking spaces?
D: I predict that we’ll see continued demand from SME’s. Given unemployment as a result of COVID you would expect to see (although there will be a lag) more freelancers and SME’s in the market.
Additionally, we’re expecting to see larger businesses who want to work in a more agile way, looking for project space, satellite offices or just smaller, more agile, HQ’s – as well as businesses who have already fully adopted agile working and need collaboration/meeting space on a regular basis.
Before this, the traditional ‘office space’ was already changing with a greater focus on amenity in buildings. So, I don’t expect to see the buildings landlords deliver change as a result, but the occupiers’ use of space change.
COVID will speed up the trend that was already happening around agile working, and I expect to see more business looking to reduce their footprint and their space take, in favour of smaller offices designed around collaboration with more of the team working in an agile way. This saves businesses money as they don’t need to provide a desk for each employee.
E: Freelancers will continue to need spaces to work outside the home, perhaps even more so than pre-COVID. The social interaction and community benefits coworking spaces provide are more relevant than ever. Many of these freelancers will look to local spaces to reduce commute times. We have had a taste of what a commute-free life feels like and, for many, it will be too attractive to reverse back to old patterns.
Bigger businesses too will be reconsidering their real estate strategies. Corporates are likely to reduce satellite offices and secondary locations, instead offering employees a WFH option. But, where there are business priorities that require teams to work in particular locations, these businesses will turn to flex space, with less commitment and no hassle.