COVID-19 Pushes Flexible Office Industry Back To Its Roots

The virtual office formed the original building blocks of the flexible space industry more than 40 years ago and, interestingly, with millions of professionals now working from home, virtual offices are once again receiving fresh interest.
  • With the world on lockdown, supply chains paralysed and economies grinding to a halt, the outbreak of COVID-19 has hit the brakes on life as we know it.
  • Coworking spaces have responded to the crisis by focusing on non-core offerings, such as virtual office addresses and mail forwarding services. 
  • The virtual office formed the original building blocks of the flexible space industry more than 40 years ago and, interestingly, with millions of professionals now working from home, virtual offices are once again receiving fresh interest.

With the world on lockdown, supply chains paralysed and economies grinding to a halt, the outbreak of COVID-19 has hit the brakes on life as we know it.

Now more than ever, businesses need flexibility, cost-efficiency, and collaborative support to keep going — all of which would normally drive companies into coworking and flexible spaces. But with workplaces temporarily closed or restricting access, operators’ hands are tied.

So what now?

Some spaces are diversifying by focusing on non-core offerings, such as virtual office addresses and mail forwarding services. Other spaces have been offering these services for some time and have maintained a steady revenue stream from this side of their business — even when faced with a sudden drop in demand for coworking or serviced space.

But virtual office services aren’t new, nor are they necessarily a sideline offering.

In fact the virtual office formed the original building blocks of the flexible space industry more than 40 years ago — and some operators have been specialising in this side of the business ever since.

What’s Old is New Again

Virtual offices are made up of a number of elements — most commonly a business address, a mail forwarding service, and a live receptionist service. Access to onsite meeting rooms and cloud-based phone systems may be included too.

The earliest form of virtual offices emerged in the 1970s, and were known as ‘off site tenant programs’ for semi-retired professionals who wanted to continue using a commercial address without any commitment to physical office space.

Interestingly, with millions of professionals now working from home, virtual offices are once again receiving fresh interest.

“We’ve seen a massive increase in small businesses with existing office space, of one or two people, requesting pricing for virtual office addresses this week,” said Jonathan Ratcliffe from workspace brokerage, Offices.co.uk.

Part of the reason is cost. Companies are facing extreme uncertainty and while they want to maintain a marketable presence in their target market, they need a lower-cost alternative to a full-time office.

Above all it enables companies to show that they’re open for business without physically renting a desk or an office.

“People still want to portray a professional image, hence the demand in virtual downsizing,” added Ratcliffe.

Coworking Goes Virtual

The virtual office isn’t as well known as other members of the flexible office family. But even at its most basic, a virtual office provides a business address and mail forwarding for a monthly fee, which is something that every workspace can offer.

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Suggested Reading: Should Coworking Spaces Offer Virtual Office Memberships?


And now, workspaces that have been forced to close are launching these services in a bid to help clients maintain a presence in their target market — while also generating essential revenue for their workspace.

Spaces that do this become an outpost of their national postal service, which in some cases classifies them as ‘essential businesses’ and means they have the option to stay open — even during lockdown.


Suggested Reading: Why Some Workspaces May Be Classed ‘Essential Business’ And Should Remain Open


Other ‘virtual’ services, such as remote call answering and virtual assistant services, are gaining fresh traction too.

Again, these services have been around for decades. Now, the current situation is forcing entrepreneurs to rethink their business strategies and in some cases, outsource their frontline customer service support to remote providers to cut costs and increase flexibility.

This has the additional benefit of freeing up resources and enabling employees to divert their time and skills to other essential tasks.

Home Distractions are Sending Workers Back to the Office

And in another nod to our industry’s early beginnings, workspaces that remain open are seeing more demand for private serviced offices rather than shared space, due to the need for workers to socially distance themselves from others.

Not only that, some people are finding the pressures of working from home with children, family members, pets, and other distractions too much.

Servcorp, one of the earliest adopters of virtual and serviced offices, has noted a surge in demand for these offerings. In an interview with Commercial Real Estate, global chief executive Alf Moufarrige said that virtual office customers are requesting flexible access to physical office space for sole use.

“They want to come in, but not on a regular all-day basis. A lot are working from home and when they think they’ll go nuts, are coming and spending a couple of hours in the office. Demand for that kind of arrangement has jumped across the globe, and in Australia, by 30 per cent.”

Post-COVID Change is Coming

As an early adopter of the flexible space model in 1978, Servcorp has always offered virtual and serviced offices.

But what’s interesting is that the health crisis is driving more workspaces and coworking operators to add traditional services in a bid to diversify and remain operational. And once the infrastructure is in place, even when members come back to the office, many will continue to offer virtual services.

In many ways the sector is coming full circle, back to its roots, and offering lessons from 40+ years of experience along the way.

In our post-COVID world, the flexible space industry will bounce back. Those workspaces that find ways to continue moving forwards are already building strong foundations for the future. And when they come back to full operation, armed with additional services and extra revenue streams, they have the opportunity to be stronger than ever.

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