There’s no shortage of theories and research studies contemplating the future of work. After all, the workplace is big business. The ability to leap forward a decade or two and build a workplace of mass appeal is an opportunity too good to miss.
In lieu of time travel and crystal balls, however, we have good old fashioned data-driven research.
One of the latest research reports discussing the future workplace is of particular interest: it directly impacts the flexible workspace industry and further correlates the already entwining worlds of traditional commercial property and flexible space.
Here we delve into the report, ‘Five Predictions for the Future of Work’, commissioned by flexible workspace operator Convene and produced by Ryan Simonetti and Hilary Braseth, with one main question in mind: what does this mean for the flexible workspace sector?
Millennials are driving change
Firstly it’s important to understand who is driving and shaping the future workplace.
It is of course, Millennials.
This is their era. They already account for close to 50% of the workforce and by 2030 they will occupy close to 70%. Much as it’s tempting to dismiss generational trends, half of your workplace is occupied by Millennials and soon, they will become the majority.
So what do they want? According to a PwC study, above all else, Millennials “value choice, flexibility, and experience in the places they work”:
“As work-life balance is replaced by work-life integration, flexible workplace environments will increasingly be regarded by CEOs, workplace strategists, HR leaders, and real estate executives as the best “talent” solution, thus becoming the new industry standard.”
In practice, according to Convene’s research, this boils down to a number of key indicators that will shape the way we design and build workplaces in the future. Here are 3 of them:
- Every workspace environment, including those operated by commercial landlords, will be under increasing pressure to transition to human-focused flexible space.
On the whole, work/life balance is something of a myth. What’s much more attainable is work/life integration, and since many business owners and employees are already living this experience, it’s logical to expect more of the same.
As such, companies are seeking amenity-rich, experience-driven office environments with flexibility as standard. Many flexible space operators are already ticking these boxes — now the commercial sector is seeking to emulate those USPs to keep up with demand.
But it’s not all about coworking:
“Established brands like Regus and WeWork have proven the value of flexibility and paved the way for a new type of real estate consumption model. However, coworking is just the first step towards a much larger macro shift in the industry.”
Convene ascertains that integration is the key, resulting in an environment that seamlessly incorporates physical space, services, and technology to create an enhanced user experience.
“Most importantly, it needs to become part of a larger ecosystem — one that coalesces into the entire office building or corporate campus.”
In the immediate future, this could entail greater demand for hybrid business centre hubs with multiple environments such as private serviced offices and corporate managed space, coworking spaces and meeting rooms under the same roof.
In short, it looks a lot like a traditional business centre. Yet Millennials will expect a seamless, tech-savvy experience with greater focus on design, connectivity and amenities.
- Work/life integration will take place under one roof, and community will become part of our lifestyle fabric.
Taking integration a step further, Convene suggests that the arrival of smart technology will lead to greater community within the buildings we utilise for work and/or lifestyle:
“The commercial office building of tomorrow will be a self-sufficient ecosystem that’s comprised of offices and retail, but also dedicated residential, medical, hospitality, and social community spaces that are seamlessly integrated with each other.”
These will be powered by sensory technologies that have the ability to connect devices, including inanimate objects (IoT style), as part of a smart infrastructure.
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According to Deloitte, by 2020, nearly 50 billion connected devices will have the capability of plugging into an office building.
This will require the development of “a technology platform and standardized infrastructure” with centralised communications, which aggregates data and allows its users to control their environments with “fingertip” technology.
“In the next-generation city, office buildings will not only need to become smarter, but also more accessible to support the changing demands of work and the world’s growing nomadic workforce.”
In much the same way as we tailor our home devices through platforms such as the App Store, so buildings will harness a “services store” to “provide building residents access to a marketplace of digital services that transform the workday experience.”
- The workplace pendulum will swing away from long-term commercial property towards flexible space, which will become the norm for Fortune 500 companies.
Convene suggests we could see more “hub and spoke” business models that will drive greater corporate demand for flexible workspace.
Take the new “Apple Park” as an example. It may look and act like a corporate HQ, but Apple deliberately shies away from such antiquated language. Its vast workplace is the central hub that brings its people and operations together, while the “spokes” are various branch locations — including flexible spaces — that enable teams to collaborate outside of their primary market.
By outsourcing on-demand workplace requirements to operators, which is already happening with the likes of WeWork, Regus, and Convene, traditional long-term property lease agreements will be slashed.
The transition is staggering:
“By 2030, we predict the pendulum will swing dramatically, and 80 percent of a Fortune 500 companies’ real estate requirements will be outsourced and consumed on-demand while only 20 percent will be executed via traditional long-term lease obligations.”
Organisations are already seeking greater utilisation of gig workers and flexible contractors. Already, more than 55 million Americans are freelancers. They already make up 35% of U.S. workers and this figure is projected to comprise 40% of the workforce by 2030.
As Convene puts it, “the nimbler the workforce, the more creative (and connected) the headquarters will need to be.”
Where does this leave us?
One of the overriding conclusions throughout this study is that long-term leases will continue to tumble and corporations will seek to become more agile, which will be reflected in their workplaces and workforces.
Another factor contributing to greater demand for workplace flexibility is the diminishing age of organisations.
According to Convene’s research, the average life expectancy of a company from birth to death is just 7.3 years.
It’s shocking, yet it shouldn’t be. After all, we live in an entrepreneurial world where startups “fail fast and fail often”. Mature companies are apt to consolidate, merge, and enter into joint ventures. Just look at Regus. Acquisition has been, and still is, its primary growth strategy.
“Industries that can’t adapt are dead or dying, and this applies to the commercial real estate industry now more than ever. Commercial landlords have no choice but to evolve their offerings to meet the rapidly changing requirements of their clients whose businesses are experiencing unprecedented disruption.
“We’re starting to see a massive shift towards shorter duration commercial leases in 2017. Combine this with the rapid growth of coworking and the shift toward on-demand consumption, and we predict the average lease terms for commercial office space will reach one year by 2030.
“We also expect to see even more lease fragmentation options offered by next-generation landlords and flexible workspace providers — micro-office consumption by the month, day, and the hour — becoming the accepted norm.”
All of this research points to an agile, fluid future of greater workplace flexibility, which bodes well for the flexible space sector. Our greatest challenge now is complacency. More than ever, flexible workspace operators must play to their strengths and deliver a workplace that is tuned to the dynamic needs of its occupiers, both now and in the future.
Download Convene’s full report here.