WeWork’s recent struggles has Chicken Littles sounding the alarm and serving as a ‘voice of doom’ but hold off on writing that obituary for the flexible workspace industry as it’s actually stronger than ever before, according to experts.
Despite being a pioneer in the coworking industry, WeWork’s approach of a one-size-fits-all for building owners wasn’t sustainable and ignored market research and market conditions. With that faulty logic in addition to signing long-term leases of up to 15 years with building landlords, and the “not so few” management issues led to the company’s demise.
No two businesses are the same, and the same principle applies to the flexible workspace industry. In an interview with Allwork Space, the founder of HEWN workspace agency, Will Kinnear, echoed this sentiment while defending the industry.
“The crucial thing to note is that if a WeWork hasn’t worked in a particular location, it doesn’t mean that flexible workspaces don’t work there at all. It’s all about matching the right space with the right operator.”
Enter the importance of flex office consulting firms.
Consulting firms recognize the importance of crafting tailored strategies that align with a building owner’s goals, strengths, and challenges. They collaborate closely with owners to develop a business model that caters to specific niches, demographic preferences, and geographical factors. This personalized approach enhances the owner’s competitiveness and differentiation within the market.
The business landscape is characterized by its constant evolution, and the flexible workspace industry is no exception. Economic downturns, regulatory changes, and unforeseen global events can significantly impact the industry’s dynamics. Consulting firms act as strategic partners, helping workspace providers adapt to change by developing contingency plans, diversifying revenue streams, and fostering resilience.
Agencies such as Workspace Strategies bring a wealth of market insights and research to the table that help owners make informed decisions. They examine the market dynamics, workforce preferences, demands, and economic trends. This approach leads to untapped opportunities and for workspaces to tailor their offerings to meet the evolving needs of their base as opposed to recklessly trying to force a square peg into a round hole for the sake of branding.
The flexible workspace industry saw the demand of the workforce and seized the opportunity. In recent years, the industry has experienced a remarkable evolution, emerging as a dynamic and indispensable solution for modern professionals in a post COVID world. As the modern work model continues to evolve, so too does the concept of the workplace.
Nowhere is this put-on display more than the ongoing (and ugly) battle of remote/hybrid work versus a return to the office mandate by their employer while their employees are refusing to backdown. According to Kastle Systems’ Back to Work Barometer (and to the fret of commercial real estate agents) occupancy of company buildings is less than 48 percent.
Adaptability to changing work patterns is why the industry sees an annual average of 23-30 percent growth and a 27 percent increase in demand from 2021-2022 and unsurprisingly, 72 percent of shared workspaces become profitable within two years of opening.
Stanford economist Nick Bloom’s research shows 60 percent of employees work fully in-person, thirty percent work in-person part of the week, and 10 percent work fully remotely. Bloom’s research led to him predicting 40 percent of jobs will be in-person and 50 percent will be remote in some capacity. The data makes a clear case that flexible workspaces are the perfect compromise for the two sides with the hybrid model.
Traditional office setups can be financially burdensome due to high overhead costs. The flexible workspace industry addresses this concern by providing a cost-efficient alternative. Renting office spaces on a flexible basis eliminates the need for long-term leases, upfront capital investment, and ongoing maintenance expenses. This allows professionals to allocate resources more effectively, directing funds toward business growth and development rather than fixed infrastructure costs. So, although a lot of traditionalists and RTO ideologues want the world to go back to 2019, at the end of the day, money talks and flexible workspaces are showing they’re cost efficient while also reducing overhead.
One of the most significant advantages of the flexible workspace industry is its inherent adaptability to the changing work patterns of the modern era. Traditional 9-to-5 routines are being dismissed in favor of flexible schedules, and remote work is becoming increasingly prevalent. Flexible workspaces cater to this shift seamlessly. In an era where companies are competing with each other to acquire talent, providing professionals with a better work-life balance and the freedom to choose when, where, and how they work is very attractive and a versatile environment tailored to individual preferences with amenities is quite the selling point.
As the industry continues to evolve as everything does, and with new players entering the market, the need for strategic guidance becomes increasingly apparent. Shared workspace industry experts like Workspace Strategies have its hand on the pulse of the industry and posses an understanding of market trends and its competition.
Their expertise streamlines operations, optimizes resources, and enhances the overall workspace member experience. By implementing best practices and industry benchmarks, flex industry consulting firms enable workspaces to deliver a seamless and efficient environment for their clients. It’s not about the firm’s brand. It’s about YOUR brand.
“Where WeWork failed, others have thrived,” said Workspace Strategies President Karen Condi. “Navigating the complexities of the flexible workspace industry requires expertise, foresight, and planning. The exceptional growth of flex workspaces is a testament to the industry’s ability to innovate and meet the desires of both building owners looking to maximize their profitability on their investment, and the workforce who seeks comfort, flexibility, and convenience.”
