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Here’s what you need to know today:
- The Future Is Uncertain For Small Coworking Firms
- IWG Teams Up With Leonardo Hotels
- Employee Benefits Need A Revamp
- Value Of Manhattan Office Towers Plummets
- Surveillance Software Leads To Growth In Presenteeism
- Hulu’s WeWork Documentary Highlights Neumann’s Manipulation
The Future Is Uncertain For Small Coworking Firms
While major coworking players are expected to play a role in shaping the industry’s post-pandemic reality, small operators have an uncertain future as they lack the financial cushion of their larger counterparts.
“Us mom-and-pops have worked so hard to have the small piece that we had, and we’re giving back a much larger piece of what we’ve had now,” said Lisa Skye, cofounder and CEO of Primary. “For the larger operators, it’s a less significant impact.”
Primary is just one example of an operator who had to give back a big portion of its portfolio as it goes through the bankruptcy process.
So far, small operators in Manhattan gave back 180,000 square feet in the year ending March 2021. With this, more established operators have been slowly taking over abandoned space in hopes of staying afloat amidst the uncertainty.
Others have closed all together. For instance, The Assemblage closed all three of its Manhattan locations last June.
According to a report from Upsuite, 20% of all coworking spaces had closed, and operators within just one market made up 46.4% of those closures.
Large operators were also forced to give back a huge portion of space, but these firms have had the ability to restructure other leases and their overall business model to become sustainable in the future.
“The WeWork, the Knotels, the IWGs, those guys are like 20% of the market,” said Liz Elam, founder and executive producer of Global Coworking Unconference Community. “The other 80% is small-to-medium-sized business operators.”
IWG Teams Up With Leonardo Hotels
IWG has partnered with hospitality brand Leonardo in order to offer a flexible workspace within one of its hotels.
This “hybrid hospitality” concept has transformed 2,000 square meters of hotel space into a flexible office, which will be managed by Regus, IWG’s flexspace brand.
“The hotel industry was already looking at offering a working environment within its venues, and we were already shifting towards the feel of a hospitality brand,” said Annelou de Groot, Development Director of IWG in the Netherlands.
The partnership was inspired by growing demand for flexibility in the workplace and focuses on transforming hotel rooms into office spaces.
“We have combined our business models in a place where the customer can work in a professional and functional manner, with the atmosphere, ambiance and hospitality services that a hotel has to offer,” said Alexander Kluit, managing director of Apollo and Leonardo Hotels Benelux. “A ‘customer’ becomes a ‘guest’ and we turn a workplace into a pleasant environment, where working and meeting are combined.”
Employee Benefits Need A Revamp
One of the biggest lessons from the pandemic is that the mental healthcare infrastructure within workplaces is insufficient.
Now, real change seems to be occurring as burnout becomes a real risk to both the health of employees and operations of the workplace.
Companies have come to the realization that supporting the employee experience is essential for a healthy company in terms of community, culture and productivity.
The transition to remote working was initially lauded by many, but working parents (especially mothers) found themselves having to choose between their careers and childcare.
Of course, the choice was simple. However, this led to almost 3 million women, particularly women of color, to leave the workforce over the past year.
This loss is detrimental to a company’s bottom line, so business leaders are trying to adopt new strategies and structures that better support their employees throughout this time.
According to a Care.com “The Future of Benefits” report, 98% of leaders said they plan to offer or expand at least one employee benefit, particularly essential ones like child and senior care and flexible working.
Some organizations are addressing the need for more flexibility by adopting hybrid work models, allowing employees to work in-office and remotely throughout the work week.
Providing this fluid option is not only necessary for workers who want a healthy work-life balance, but it is necessary for companies trying to attract and retain working parents.
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Value Of Manhattan Office Towers Plummets
The New York Times has reported that the market value for Manhattan office towers has dropped by 25% over the past year, contributing around a $1 billion plummet in property tax revenue.
This is largely due to big companies like JPMorgan Chase and Target letting go of office space not only in New York, but across the country.
For instance, United Airlines gave up over 150,000 square feet of space in Chicago’s Willis Tower.
According to Jamie Dimon, CEO of JPMorgan, remote work has been the leading cause for the company to decrease its office footprint.
In the meantime, property owners who have relied on long-term leases throughout the pandemic could struggle to fill in those spaces once the leases have expired.
At the moment, 17.3% of Manhattan office space is up for lease, which is the highest in decades. Asking rents have also fallen from $82 per square foot in early 2020, to $74 today.
However, some landlords are banking on employees who do want to return to the office needing more space to physically distance in accordance with pandemic-related guidelines.
Surveillance Software Leads To Growth In Presenteeism
A survey from cybersecurity firm Kaspersky revealed that employers’ lack of trust in their workers correlates with the spike in surveillance software usage.
However, the implementation of this technology has actually hurt employee morale as they feel the need to work longer hours to seem visible to their higher-ups.
The survey of 2,000 full-time UK workers revealed that, while 80% of managers said they trust their employees to work from home, presenteeism is forcing them to feel like they must work longer hours and be available all times of the day.
Additionally, 25% admit they have been working even harder from home for fear of being perceived as lazy. Even more, this number jumps to 40% for those who have monitoring software on their devices.
While surveilling employees is working for companies looking to meet specific quotas, there is a high risk of businesses losing their workers.
Some respondents even admitted to using their personal phones to text colleagues to avoid being monitored by senior management.
“Businesses need to realise that excessive employee surveillance is leading to unhealthy employee behaviours, with people feeling the need to work longer hours, and experiencing increased stress levels in their bid to keep up appearances,” said David Emm, principal security researcher at Kaspersky. “It also creates issues from a security perspective, as employees using non-sanctioned personal devices for work tasks increases the vulnerability of corporate data and assets to hackers.”
Hulu’s WeWork Documentary Highlights Neumann’s Manipulation
Hulu’s documentary titled “WeWork: Or the Making and Breaking of a $47 Billion Unicorn” delves into the history of the coworking company, how it managed to raise billions and what led to its tumultuous attempt to go public.
WeWork, founded in 2010 by Adam Neumann and Miguel McKelvey, set out to become the go-to hub for innovators and entrepreneurs. In 2019, after investors became skeptical of the company’s business model and realized it was burning through cash, the firm withdrew its IPO and Neumann was soon ousted as chief executive.
One of the main focuses of the documentary was Neumann’s enticing, yet manipulative disposition. He used impassioned speeches, limitless visions of the future and misrepresentation of facts to drive his team, which ultimately led to the business’ downfall.
Many former employees expressed losing their sense of purpose in the shadow of WeWork’s unraveling. On the other hand, some employees discussed how booze-riddled company retreats were mandatory and staff would be tracked by company-issued bracelets.
“They would address the crowd talking about whatever the word of the day was like authenticity,” said one former employee in the documentary. “And as I’m sitting there, I’m thinking you forced me to come to this summer camp and sit in the mud. Nothing about this seems authentic.”Share this article