For many businesses, moving office is a stressful disruption. But the community interest company What Works Wellbeing has done it six times in eight years.
Never signing long leases, the company, which gathers and analyses evidence on how to improve wellbeing in the workplace, pays to use a shared space for its headquarters in London three days a week. For monthly “team days”, it temporarily expands by renting meeting rooms in the building and colonising adjoining desks.
“We have an agreement with the teams [of other organisations] next to us that we flow into each other’s spaces,” said Nancy Hey, executive director.
Hey is a pioneer of what is becoming known as the flexible office. Just as the co-working sector’s longtime leader WeWork has fallen into bankruptcy after years of mismanagement, the model it popularised continues, recast as “flex space”.
The concept overlaps with co-working, but has a broader variety of subcategories: various types of shared serviced offices including executive suites and incubators, office “timeshares” and desks by the hour. Whereas co-working was targeted mostly at individuals and start-ups, flexible offices can also appeal to larger, established companies. They look well suited to the post-pandemic juncture in working life: companies ditching fixed workspace as remote work takes off.
The changes in how people work have already prompted a meltdown in commercial real estate.
Vacancy rates for office space in the UK and US remain around record highs, reports the research company CoStar. Certain collapses in value have been spectacular: St Louis’s largest office building, the former AT&T Tower, which sold for $205mn in 2006, will soon be auctioned with bids starting at $2.5mn.
Some redundant offices will be converted into housing, but in many cases, restrictive zoning laws or unsuitable building structures make that impossible. So they will need to become offices for our times.
Most companies still want office space; few bosses approve of full-time remote work. However, tenants find themselves in a buyers’ market, and are reluctant to sign the five- or 10-year leases that used to be common. Companies are seeking a new flexibility, often through “shorter lease terms and more latitude to expand or contract their total space”, reports the real estate advisers CBRE. Tenants’ freedom to leave an office at short notice also puts continuous pressure on landlords to provide attractive workspaces, sometimes equipped with gyms or even childcare.
For the first time, many workers can choose an office whose location and culture suit them, instead of commuting to one their company happened to have leased years earlier.
For now, flexible offices remain a rarity — just 1.7 per cent of total US office inventory, according to CBRE.
But multiple types are emerging. With many employees coming into the office only two or three days a week, some companies are adopting the “timeshare model”: sharing space with a company that works different days.
Then there are the “flex spaces” popping up in neighbourhoods in suburbs and small towns to accommodate the newly remote workers who have stopped commuting. Notionally, these people now work from home, but much of their work is not actually done from home. Some remote workers need to find a third space because of cramped housing, uncooperative spouses or noisy children. Employers often help them rent a desk near their home. Spotify, for instance, offered staff “a co-working space membership if they want to work from an office”.
Hey said the model had allowed What Works Wellbeing the freedom to move easily when its needs for space changed, or, in one case, when a property manager did not pay the rent and staff showed up one morning to find the office closed.
It has always shared office space with other organisations and this has led to valuable partnerships.
Ideally, office cohabitees would share interests and agendas, allowing spontaneous exchanges of ideas around the coffee machine, said Hey. Her team still collaborates with a research group they happened to sit next to years ago.
“In eight years we’ve had at least six different offices. What we think is very useful is collocating with people that are similar to you,” she said.
IWG, which was WeWork’s largest co-working rival, said it had “launched a major programme of expansion, and will add 1,000 locations to its global network over the next year, with the majority in suburban and rural locations, and often in small towns”.
The company plans to open “flex spaces” in places such as Destin, Florida, (population 14,000) and in Britain’s traditional railway hub of Crewe (55,000). Already in Henley-on-Thames, the wealthy river town west of London, demand for flexible space had doubled, said IWG and the consultancy Arup.
These small-town “flex spaces” have the potential to become hubs of local communities — places where people get to know each other.
Some tenants of flexible space will be start-ups. Flexibility allows them to begin with minimal office costs, then scale up fast if they grow. Other small companies might choose to share flexible offices with peers.
“If there are not many of you in the office, it’s safer and more interesting to be around people,” Hey explained. A woman working late in an empty office could feel unsafe, she added.
Most of Hey’s colleagues live far from the company’s base in London, some abroad. One of her distant employees who has benefited from flexible offices is Joanne Smithson. Living in north-eastern England, she began working for What Works Wellbeing from a free desk seated among the public health team of a local council. Smithson provided her cohabitees with wellbeing expertise “on tap”, while she took in their “day-to-day experiences of frontline workers”. She believes that hearing from people in different jobs reduces the risk of groupthink.
She found that spontaneous collaborations, while making tea together or eating lunch, could be more productive than formal meetings. Once, while listening to a council worker talking to urban planners about a new housing development, Smithson grasped the local specificity of such negotiations. She learnt: “There wasn’t a single policy that would work best in every area. I think I went from a definitive way of doing things to providing a framework.”
It is ironic that WeWork has gone bankrupt just as the shared, flexible office spaces it pioneered seem to be taking off. The company’s co-founder, Adam Neumann, may have had a point when he remarked this month: “WeWork has failed to take advantage of a product that is more relevant today than ever before.”
