For the most part, the worst has come to pass regarding the recent pandemic, and businesses that survived its abrupt onset have learned many new things about adapting to large-scale crises. Post-lockdown recovery takes priority to get organisations fully back on their feet, and downsizing on office real estate can prove to be a solid contribution to these efforts.
With remote working and hybrid working gradually becoming the norm in the post-COVID world, companies will generally not need as much office space today and in the future as they did back in pre-COVID times. Thus, business owners are now scrutinising their property portfolio: underutilised office capacity brings unnecessary costs, and other factors such as property taxes, insurance, utilities, security, and general maintenance bring additional fees.
All things considered, the fact remains that flexibility is more of a priority than ever for employees and, now, business owners going forward. For the latter, this means being able to quickly change their staff’s working arrangements gives them better odds of surviving the many potential world crises that could follow.
And so, the case for retaining large office spaces is becoming weaker for the following reasons;
1. Cost efficiency is essential to post-COVID recovery and long-term survival
As global recession remains imminent, businesses are experiencing an abrupt shift from improving their bottom line to cutting every unnecessary cost in their operations. For companies in Singapore, office rent is among the largest expenses in their budget. Reports of Q3 office rents nearing a 14-year high and still trending upwards, according to JLL, only exacerbate the problem. Thus, organisations that successfully shifted to remote working amid the pandemic will miss out on a significant cost-saving opportunity if they revert to their previous office setup.
However, reducing office space is not just about costs, as empty desks and wide-open spaces can also dampen morale as the business looks in decline despite having the majority of the workforce busy off-site. Moreover, echoing spaces impede collaboration. Thomas Allen’s famous study relates to this as it found colleague proximity essential – peers out of sight tend to be out of your mind. Employees are four times more likely to regularly communicate with their coworkers if they are just an arm’s reach away as opposed to being farther out, like in an entirely different place, such as on separate floors or buildings or somewhere else remote.
2. Employees now demand flexible working schedules
It is no secret that the sudden shift to remote working ultimately helped restore the work-life balance of millions of employees, and now they wish to retain it moving forward. Studies show a link between higher job satisfaction, organisational commitment, and lower stress levels with work decentralisation. Additionally, flexible working arrangements have only boosted productivity levels, according to many surveys and studies centred on the current millennial workforce. While some employees see the work-from-home (WFH) experience in a negative light, the majority prefer to have options and greater control over their work.
3. Alternative workspaces are now a viable option
One of the many lessons learned from the pandemic is that in a globalised world, more drastic market changes are likely to happen again. This is why businesses must always be ready to adapt quickly, and long-term office leases largely prevent that. As various industries search for more agile ways of conducting operations, the flexible terms of alternative workspaces like coworking spaces are far superior compared to traditional office leases. Thus, coworking spaces will likely become more popular over time as employers provide alternative options to their remote or hybrid teams.
4. The transition to 4-day work week and its impact on office rental
Amid the improvements in the COVID-19 pandemic situation, more and more employers are seemingly welcoming the hybrid working model, where employees work four days in the office and one at home. While this transition to the 4-day work week is beneficial for some companies, it might not be as worth it to pay a high amount of office rental for their traditional large office spaces. Instead, they could take this opportunity to reduce office rental costs seeing as companies would need less office space to accommodate employees working fewer days per week. Therefore, a viable solution would be to use flexible office solutions like coworking spaces.
Coworking spaces can be a great option for companies looking to implement a 4-day workweek, as they often offer flexible leasing options that allow companies to only pay for the space they need. In addition, many coworking spaces offer a variety of different types of workspaces, like private offices, dedicated desks, and hot desks, which can be used to accommodate different needs and team sizes. This flexibility can allow companies to adjust their office space needs as they transition to a 4-day workweek. Furthermore, coworking spaces are often equipped with all the necessary amenities, including meeting rooms and office equipment, eliminating the need for companies to invest in and maintain their own office infrastructure. As such, coworking spaces can be a cost-effective and flexible solution for companies who are implementing a 4-day workweek and reduce their office rental costs.
Conclusion
Although it is highly unlikely for businesses to abandon office work altogether, it should be expected that working arrangements will change dramatically in today’s post-COVID world. No matter how organisations choose to move forward, they must adapt while doing so and maintain a higher level of agility to ensure business continuity.
To get started on more flexible office spaces for your team, don’t hesitate to contact us at GreenHub Singapore today! Our modern and fully-furnished coworking office spaces for lease are ready for use whenever you need them. Apart from modern interior design philosophy, they also feature green, biophilic elements conducive to mental wellness and productivity, as proven by various research findings. Contact us today to experience our spaces for yourself!