Outlook For Co-Working Space And Trends To Drive In 2021
As entire workplaces shifted to remote working, the change in dynamics was of a scale we’d never witnessed before. And with them came new challenges - providing for digital infrastructure at home, managing whiteboard discussions virtually, doubling of efforts on employee engagement, tech fatigue, mental health implications, and more.
What do these changing dynamics mean for commercial real estate and more so for co-working office spaces?
I believe the answer lies in some fairly interesting, and optimistic trends in the rapidly evolving co-working space over the next 6 months.
The Upturn in the Commercial Real Estate Sector
As the work-from-home setup was adopted at a mass scale, it seemed to work surprisingly well in its initial stages. However, over time, its inherent challenges have come to the fore, driven by multiple factors including, but not limited to, navigating the home environment, tech fatigue, mental health, and the need for community.
The Home Challenge
For many employees, particularly those living with families in smaller apartments and still dealing with an 8-10 hour workday demand, the remote work situation has not been easy. Juggling between household chores, parenting, etc. while also managing to create an office environment at home has proven to be a far more challenging task compared to the conventional work setup that used to demarcate time and space so effectively.
The Human Need to Connect
Another factor here is the human need to physically connect for collaboration, whiteboard discussions, brainstorming, teamwork elements, etc. Employees seem to be spending about twice the amount of time trying to collaborate virtually. Reports have been attempting to quantify the productivity loss - with some estimating the loss of productivity to be up to 50% during remote work. Clearly, there appears to be a ‘productivity tax’ when it comes to working from home for the long-term.
Tech Fatigue
Closely related to this issue is tech fatigue. The substantially increased screen time has led to an increase in doctor consults. For instance, an eye doctor has reported a 30% increase in Lasik procedures. Not only has eye strain and decreased blink rate become a problem, but a whole range of other health problems are also being caused due to sedentary lifestyles.
But this isn’t all - mental health driven by anxiety and loneliness, particularly for those staying alone - more so during the lockdown phase - has become a major concern. Tech fatigue also seems to have taken its toll on mental health. With terms such as ‘Zoom fatigue’ and ‘Zoom gloom’ coming up, virtual calls alone seem to be taking their toll on employees. A recent finding by TELLUS International shows that 80% of professionals would quit their current position for a job that focuses on mental health.
Those are alarmingly high numbers.
Clearly, there is a need for community and office social life that cannot be met with digital communication.
It seems then, that the case for the office space is quite strong. The decline in demand, therefore, only seems to be temporary. A report by Knight Frank predicts that overall demand for office space could remain strong in 2021, particularly with cities like Bengaluru expected to witness a rise owing to low vacancies.
A Strong Comeback of Co-working Spaces
Recent trends appear to indicate a very strong comeback of the co-working space. Reports suggest the number of professionals in coworking could increase 2.5x by 2025.
The co-working space has once again gained popularity owing to the unparalleled advantages it offers - such as pay and use or flexible cost structures. With an average lock-in period of 12 months vs a 6 year tenure in traditional spaces , not only do they offer a lower lock-in period, coworking spaces also prove to be extremely cost-efficient. With lower infrastructure costs, they are easy to support ramp ups (or ramp downs) with zero fixed costs. Moreover, companies get to save a lot on fixed infrastructure costs such as ISP cost, printing costs, gaming zones, food and beverage services, vending machines, security and safety costs and the list goes on.
The demand for flexibility
Large enterprises are now looking for flexible options more than they ever did for their employees to come in certain days of the week or on alternate days. Flexibility remains one of the most important demands as enterprises learn to adapt to a new normal. The need for social distancing necessitates the freedom to adjust work timings and even distribute the workload between the office and home.
Now, more than ever, large corporations are experiencing a distinct need for this flexible office space - a need that coworking and managed workspace providers are ideally placed to fill.
According to a JLL report, the market is expected to cross 50 million square feet by 2023.
Conclusion
It’s been evident for a while that entirely shifting to remote work is unsustainable in the long run. Unsurprisingly, a survey has revealed that 77% of Indian respondents found remote work less enjoyable while 49% were missing the office social life.
A hybrid workspace as the future seems to be the consensus at this point . And the road ahead involves a redesign, restructuring, and a redemption of sorts besides, a shift towards more wellness offerings.
