How To Deal With Change In The Workplace: Traditional vs Flexible Space

Published on November 21, 2019 - By Cecilia Amador de San José

• New research by the Instant Group provides advice on traditional vs flexible space, and how to implement change management in the workplace.
• With large companies increasingly embracing flexible workspace solutions, the Instant Group predicts that by 2023, 35% of office space will be flexible.
• However, companies need a better approach to determining which office space solution works best for them, as many struggle to make informed decisions.

The Instant Group recently published its latest research “The Growth of Choice: Evaluating Traditional Space vs Flexible Alternatives”. The research provides a step-by-step guide on how companies can evaluate flexible workspaces compared to traditional real estate, and how companies can implement change management in the workplace. 

The research, which provides a case study as an example, provides a strong argument on why companies can greatly benefit from using flexible space options. According to the Instant Group, “having a flexible approach to real estate can hedge risk and boost business agility when expanding into new markets, creating project space or consolidating your portfolio.”

With large companies increasingly embracing flexible workspace solutions, the Instant Group predicts that by 2023, 35% of office space will be flexible space. However, in order for that number to be met, companies need a better approach to determining which office space solution works best for them. As it currently stands, companies are struggling with making an informed decision. 

Why Change in the Workplace Is Taking Place

A driving force behind workplace change is employee demographics. The newer workforce generations have different requirements and expectations, and companies seeking to retain talent have started to change their workplace strategy. 

“The amenities race has infiltrated office environments, so much so that it’s now commonplace to see offices with perks ranging from refrigerated rooms for grocery delivery and hot-tubs, to onsite childcare facilities.”

But it’s not just changing demographics powering this change, it’s also important to note evolving work models. Working hours and locations have become flexible; professionals are no longer required to be in any specific place and time in order to work. This means that a company’s office needs and requirements need to change and evolve along with modern work models. 

Flexibility Is Key

To attract and retain the best talent, flexibility is key. But flexibility is also key in order to keep a company agile and resilient. Flexible workspaces are making corporate real estate portfolios agile; to a certain extent, it’s these types of workspaces that are enabling change in the business world. 

Flexible workspaces are enabling companies to move fast, to keep up with emerging needs and trends. More importantly, they’re doing this while at the same time representing cost savings for companies. Instant has found that “agile working can save a company on average a third of their total CRE costs.”

Change, and the ability to embrace and adapt to it quickly, can lead to growth. 

“The need to grow quickly and to change on demand, whether downsizing, moving locations or opening in a new market, will be hindered if CEOs do not embrace workspace flexibility.”

And while many companies see the benefit of moving into a flexible workspace when they don’t have a dedicated real estate team (companies can save countless hours and budget by letting flexible workspace operators secure their furniture and take care of the layout), flexible workspace solutions can also benefit companies with dedicated real estate teams and extensive portfolios. 

Evaluating Flexible Workspaces vs Traditional Offices

The Instant Group presented a case study in which a company was able to reduce both capital expenses and ongoing operations expenses by switching 30-40% of its portfolio to flexible space. 

There are 3 key steps to take when making a decision to stick with traditional office space or make a move to flexible alternatives. 

1. The first step in evaluating a workplace move is to detail the company’s needs. It helps to be as specific as possible, so take into consideration the current size of the workforce and how that number is expected to change in the short and long term. It’s also important to take into consideration any specific requirements, like technology and security. 

For example, the company in the case study was growing from 90 to 250 desks over five years. The company also needed two private offices, an archive room, and a dedicated server room, as well as access control in most rooms, security cameras, and wired ethernet. 

These types of details and specifications should be made at the beginning in order to accurately  evaluate all options and take into consideration any additional expenses that might come up later in the process. 

2. The second step is to carry out an internal cost audit comparing total occupancy costs followed. This is a crucial step in comparing both choices as “there are significant differences in costs and considerations in traditional and flexible office environments.”

Companies need to take into consideration costs like reception, facilities management and maintenance, property taxes, any services charges, cleaning fees, set up fees, parking costs, utilities, office consumables, kitchen consumables, telephony, furniture costs, etc. 

When auditing flexible workspace costs, companies need to take into account what services and amenities are included in their membership. While some spaces offer printing and scanning services, others offer them at an additional cost; the same goes for coffee/tea and snacks, pens, paper, access to meeting rooms, and so on.

3. The third step is to compare the costs. It’s important to note that “square footage will be much lower in the flexible option because operators will provide the square footage for private space without accounting for all the common spaces such as phone booths, conference rooms, and kitchens.” Therefore, the cost per square foot is not comparable. 

Another important thing to note is that in flexible workspaces, “capex expenses are avoided altogether.” According to the Instant Group, the flexible workspace solution is much more cost effective once companies amortize the costs per month, including capex expenses. 

Other than costs, companies also need to take into consideration cultural needs, worker productivity, and employee loyalty, among others. 

Companies that have moved into flexible workspaces have employees that are more productive and engaged; some companies have also found new clients in their flexible workspace neighbors.