Why Startups And Large Companies Will Choose To Move More Towards Flexible Workspaces
Corporates are looking for a fresh and more inclusive working model to appeal to the evolved workforce
Over the last two years, the work from home culture has become a defining moment in the corporate world. However, as more enterprises choose to prioritize the safety of their workforce, the usage of headquarters for large-scale enterprises and offices for startups is anticipated to remain minimized for the foreseeable future. While many find remote working a boon, others have started recognizing its challenges, especially on the productivity front.
Corporates are looking for a fresh and more inclusive working model to appeal to the evolved workforce by creating a suitable work environment that boosts employee engagement while maintaining a constant work-life balance. Keeping the economic burden of running physical offices in mind, the current predicament faced by most employers is to continue maintaining productivity while reducing operational costs. This can be achieved by downsizing company headquarters and moving to managed workspaces in cities with the maximum employee density. Corroborating the increased interest in flex spaces, a recent study deduced that co-working space leasing activity showed a tremendous increase by 42 per cent YoY in 2021, with co-working offices reckoning for 15 per cent of all India office spaces by year-end.
2021 witnessed gross absorption of around 175,000 seats across India and projections for 2022 are for approximately 250,000 seats. The study also revealed that at a compounded annual growth rate (CAGR) of 29 per cent since 2017, shared workspaces in India could cross 3,000 co-working centers with a million workstations by the end of 2022.
Here are some critical factors encouraging enterprises in India to move towards flexible and managed workspaces:
Risk alleviation: While getting into a sizable workspace, businesses face multiple challenges—going back and forth to close the agreement and choose the most beneficial price, determining the best-suited design elements and furniture, dealing with hidden fees, plus the hefty setup expenses. Additionally, nowadays, expenditures of a robust sanitization infrastructure amongst other preventative measures also have to be accounted for. Every one of these factors triggers challenges when closing real estate deals. Unlike traditional workspaces, flexible workspaces come with very minimal lock-in periods. The co-working ecosystem is thus cost optimizing, which results in increased productivity and helps in retaining natural talent that promotes the organization's growth.
Better efficacy: The has been tremendous growth in startups and small ventures in 2019-2021, and it is expected to explode in 2022 further. For small ventures and startups and even for established organizations, it has become more important than ever to make a healthy working environment for employees. To establish a cordial relationship among the employees, creating an ecosystem that caters to them and their evolving requirements is imperative. The necessity to attract and retain top talent helps their company scale up quicker for large enterprises. Flex spaces offer unparalleled possibilities to bring free-thinking, like-minded people to collaborate and add value to their particular work. The naturally collaborative environment of managed workspaces encourages engagement, innovation, creativity, and networking between members.
Flexibility: Today, the millennial workforce looks for a non-traditional working environment that does not follow traditional protocols and focuses on enhancing their creativity and providing flexibility. For organizations, on the other hand, lease relaxation is one the most essential and benefitting factors of moving to a managed workspace. Organizations can partner with workspace providers depending on the need for much shorter durations rather than signing up for a multiple-year lease. In addition, to ease administrative responsibilities, the office space provider takes up most of the tasks traditionally taken on by the occupier. These generally include the design, facility management, and supply of amenities.
Optimum use of capital: Coworking spaces undoubtedly have the upper hand in capital expenditure. The riskiest phase that startups and small enterprises face is the hefty capital expenditures while creating a workspace. That's when coworking space becomes a more rational and profitable option. The capital expenditure is minimal in the coworking space. The available finances can create a better work environment and incentivize a workforce that will eventually lead to a more productive and profitable business.
The growth of coworking spaces has been tremendous in a very short period in India. Hence it can be stated that the coworking culture has the potential which can help any startup or established organization grow at optimum CAPEX.