The rapid rise of the gig economy and an ever-increasing range of disruptive technologies have led to a shift in the way companies think about their office space. The days of committing to long leases in out of town office parks are coming to an end. With many companies opting to take more a flexible approach instead.
This shift has led to the rapid rise of flexible workspace providers such as WeWork who offer fully equipped workspaces without having to commit to a lengthy lease. The concept has proved so popular that WeWork now offers workspace solutions in 110 cities and 29 countries around the world.
But is flexible office space right for your business? Jonathan Ratcliffe from Offices.co.uk takes a closer look at the serviced office market in the UK. Exploring how the market has evolved, identify the big players, and reviewing the pros and cons of this type of office space. This should help you make the right decision about how to optimise your space to suit your business goals.The rapid rise of the gig economy and an ever-increasing range of disruptive technologies have led to a shift in the way companies think about their office space Click To Tweet
The Workplace Revolution
Much of the early growth in the serviced office market was driven by the rise of the gig economy. The first providers pioneered flexible office space which allowed freelancers to move out of the coffee shop and work on projects in a more professional environment.
But the advent of cloud services, which allowed secure access to business-critical data from any location, allowed more conventional companies to rethink their working environment. To accommodate the change, serviced offices evolved from supporting 1-2 man teams to providing space for 100 or more on a single floor plate.
Some providers have expanded this concept further by developing the space as a service model.
The Move Towards Space as a Service
Just as the rapid take-up of cloud platforms brought about new services such as software as a service (SaaS). The serviced office market has evolved to provide more customer-centric services in addition to the standard deskspace model.
Today’s flexible office spaces are equipped with state-of-the-art telecommunication systems, high-speed internet access and virtual conference suites to better serve the needs of tech-savvy occupiers.
Some centers also provide a range of value-added services such as administrative support, IT support and mentorship programs which companies can tap into when they need it.
And much like cloud services, the space as a service model allows companies to scale and contract their space needs quickly. This is useful, not just for fast-growing start-ups, but also multinationals seeking to establish a presence in new markets quickly, or companies with a need to employ temporary project teams.The space as a service model allows companies to scale and contract quickly. This is useful, not just for fast-growing start-ups, but also multinationals seeking to establish a presence in new markets quickly Click To Tweet
How Companies Benefit from Flexible Workspaces
Flexible office space has proved popular with companies of all sizes. Here is a look at how different companies can benefit from the concept:
The flexibility of the space as a service model has allowed companies to rethink what is normal. Previously companies seeking to establish an office in a new territory would have to commit to lengthy leases and spend tens of thousands fitting out space. This process is not only costly, but it also doesn’t provide any flexibility and it’s time-intensive.
By partnering with a flexible office provider, companies only pay for the space they need, when they need it. They also don’t have to spend money on office fit-outs or networking equipment because these are all provided by the landlord. And should the office headcount grow quickly, the company can expand quickly to accommodate new staff.
Small to Midsize Companies
Small to midsize companies often complain that they are not able to compete with larger companies due to the cost of implementing enterprise-grade software and communications systems. Software as a Service (SaaS) has made some business software more accessible but the problem of network provision and security still exists.
By using the space as a service model, SME’s can make use of the enterprise-grade networking and communication solutions provided by flexible office space providers. This should help level the playing field by giving them access to technologies such as telepresence, superfast broadband, high-speed WiFi and secure network access at a fraction of the cost.
Start-ups and flexible office spaces are natural bedfellows. Start-ups require low-cost operations, fast deployment and flexibility. While office providers can benefit from increased space requirements as the company grows.
Previously, start-ups would have to make do with low-cost accommodation until the business grew enough to support a dedicated office. Think about how many of today’s most popular companies started life in a garage? Hewlett Packard, Harley Davidson and Ikea to name but a few.
But today’s start-ups don’t need to struggle in the basement or garage. They can move straight into a fabulous well-equipped office from day one. This not only allows them to portray a more professional image, but it also gives them the freedom to grow quickly without having to worry about space.
Some flexible office space providers have tapped into this market by providing a range of value-added services such as business support, mentorship programs, marketing advice, and business growth workshops.Some flexible office space providers have tapped into this market by providing a range of value-added services such as business support, mentorship programs, marketing advice, and business growth workshops Click To Tweet
New Ideas Create New Solutions
Innovation in the flexible office market is not limited to space providers either. Previously, companies seeking new office space would contact their local real estate agent. But this is not the best solution for finding flexible space. The easiest and most cost-effective way to find local serviced office space is to use a specialist website such as Offices.co.uk.
Websites such as ours allow you to search for facilities based on location, office size and services provided. Once you have found a shortlist of suitable properties you simply complete the contact form to arrange a viewing. This approach saves a lot of time compared to using a traditional agent while dramatically reducing fees.
Who are the Big Players and Innovators?
If you are seeking to benefit from serviced office space, it may help to know who the big players are in the market.
WeWork – one of the largest and fastest-growing flexible office space providers, WeWork now has facilities in 110 cities and 29 countries around the world. WeWork offices are often located in prime locations and come well equipped with the latest technology.
Spaces – as part of IWG, which includes serviced office giant Regus, Spaces offer flexible office space coworking space and meeting rooms in most major cities around the world. Spaces offices are best suited to global corporations seeking to develop new territories quickly.
The Office Group – provides a range of office space, coworking spaces and meeting rooms in key locations around the UK. They don’t currently have the reach of larger brands such as WeWork but are looking to expand rapidly following the 2018 buyout by Blackstone Group, the world’s largest real estate fund manager.
Bruntwood – based in the North West, Bruntwood have developed coworking and serviced office spaces in key cities including; Manchester, Birmingham, Leeds and Liverpool. They offer a range of workspace sizes from hotdesking to entire floor plates capable of housing 100 or more employees.Innovation in the flexible office market is not limited to space providers either. Previously, companies seeking new office space would contact their local real estate agent. But this is not the best solution Click To Tweet
What’s Included and What’s Not
Most facilities provide a basic range of services as standard. These can vary depending on the location, but generally speaking the following facilities are included as part of the monthly rental fee:
Fully equipped kitchen
IT and telecoms equipment
Access to meeting rooms
Utilities; electricity, water, heating
Business rates (most centers include business rates, but this can vary so always check with the center before committing to space.)
Staffed reception desk
Some facilities also offer a range of pay-as-you-go services. These cost extra but they typically provide good value because the cost is spread across multiple tenants.
Typical Pay-as-you-go Services Include:
Presentation and conference space
The Pros of Flexible Workspace
1. Great networking opportunities: Working in a coworking space presents a great opportunity for entrepreneurs and freelancers to build new relationships and work on projects together.
2. Fully furnished office space: You don’t have to commit to spending thousands fitting out your office. Most centers are fitted out to a high standard which is great for both your employees and customers.
3. Access to the latest technology: Most flexible working spaces are equipped with the latest communications and network technology. Occupants benefit from access to superfast WiFi, high-speed broadband and telepresence technologies. The security of the network is also looked after by the skilled onsite IT staff.
4. Business support services: Some centers provide business support services including; administrative support, technical support, and even business growth support. Check with your local center to see what’s available.
5. Ability to grow quickly: The key benefit of flexible office space is the freedom to rightsize your space quickly. Fast-growing companies can increase space at short notice, while companies seeking to downsize can reduce space without any financial penalty.
The Cons of Flexible Workspace:
1. Lack of privacy: Working in a coworking space means sharing the space with other people, some of whom may be competitors. While you will have your own dedicated space, privacy can still be an issue.
2. Can get crowded: Coworking spaces in popular locations can get crowded during peak office hours. If you need peace to work effectively, we suggest choosing an office which is a little out of the way. This will also mean you benefit from lower rates.
3. Lack of branding: Most flexible office providers restrict branding for individual companies. The amount of branding allowed varies depending on the facility and the amount of space taken. So it’s a good idea to check what is possible before committing to space.
The serviced office market has changed significantly since the concept was launched in the 1960s. Today the market represents just 1.5% of available office space in major European capitals. But that number is expected to rise to around 10% over the coming years as larger companies start to realize the benefits of flexible office space.Companies operating in fast-moving or cyclical industries such as the service, tech or creative sectors, will benefit from moving real estate off the balance sheet and housing staff in more flexible office space Click To Tweet
Despite the rapid growth rate, the flexible approach is not right for all companies. A law firm, for example, may prefer the privacy of its own office while some financial institutions may also prefer the stability that comes with occupying their own building.
But companies operating in fast-moving or cyclical industries such as the service, tech or creative sectors, will benefit from moving real estate off the balance sheet and housing staff in more flexible office space. Get in touch through Offices.co.uk to review the options for your business.