With the year coming to a close, I would like to take this opportunity to say thank you to all our clients, space operators and colleagues for your tremendous support. Without you, Upflex wouldn’t be where it is now.
In 2019, Upflex experienced exceptional development, expansion and growth. We launched an updated version of our platform, making booking even easier for clients, expanded our network to over 4,000 locations worldwide and we’re on track to reach 10,000 locations in 2020. We also planted 10,000 trees in Africa, thanks to our first 100 clients, and we are committed more than ever to making the world more sustainable.
I take this opportunity to salute the amazing work performed by the The New Zealand parliament who passed landmark legislation that enshrines the country’s commitment to the Paris Agreement into law, and will see the country achieve zero net carbon dioxide emissions by 2050. This is a historic moment and I truly hope the first nation of many to choose that path for our future generations. (blog cover photo of New Zealand prime minister Jacinda Ardern)
Upflex remains at the forefront of the continuing move away from traditional office leases towards the use of flexible workspace by businesses. Based on our observations and conversations with enterprise-clients and space operators, here are five trends that we expect will be sure to continue into the next year:
Companies Continue to Reduce Long-term Lease Commitments
New accounting standards allowing businesses to report coworking as a service expense instead of long-term liability on their balance sheet has already had an important impact. This will continue to grow in 2020 in a massive way. It is even more important for large corporations that have extensive local operations, such branch locations, sales offices and local offices and for companies with a large international market presence, where real estate costs are the second most important business expense on the books. Reviewing and reducing existing lease commitments is a way to cut costs and eliminate long, costly financial obligations. There have been many instances where leases were signed with little regard on the impact on employees, resulting in longer commutes, forced remote work and lack of owned office space. If actual space usage is around 60%, then the flexible work portfolio has to be around 40%, if not more, to cater to all business needs and all types of workforces.
Companies are Implementing Hot Desking, Touchdown or Hoteling Strategies
A large percentage of the workforce only use their workspace about 50% to 60% of the time. As a result,companies are implementing hot desking, and employees are getting used to not having dedicated desks to work from. Some companies even have a booking system for the hot desks. The purpose of this strategy is to seek office space efficiency, and reduce waste and costs. However, hot desking programs are never accurate and never really deliver on efficiency, as choices are limited to existing leased space. Since implementing hot desking is not strictly about a better office environment, remote work employees impacted by this feel more like an expandable part of the business, and the lack of belonging affects loyalty and job satisfaction.
Both Startups and Enterprise Companies are Scaling Back Work from Home
For years, companies have been implementing a work from home workforce/workplace strategy for two reasons: employees usually prefer to spend more time at home while carrying out their responsibilities, at the same time, companies realized that this would be a good way to reduce real estate and facilities costs, with some of the savings directed into investments in technology that would enable employees to work remotely. Research has shown that working from home has its pitfalls as employees are less engaged, less creative and less productive. Ultimately, this has an impact on company productivity and overall company output.
More Companies allow Employees to Work Remotely at Least One Day a Week
There is some logic to this as employees feel more empowered and tend to achieve more in four days at the office compared to five days there. The prospect of a shorter week and being away generates more engagement and cuts the routine. A day away from the office allows employees to catch up on their work with less distraction, and to value the change of location. Many companies have already begun implementing this program. The question is which day of the week has the best impact.
Companies will Truly Embrace Environmentally Sustainable Workspaces
As New Zealand passes historic zero carbon bill and Goldman Sachs pledging $750 billion for ‘large opportunities’ in sustainable financing, the world enters age of sustainability. Adopting sustainable workspaces already became a top priority for companies of all sizes across the globe and this trend is only getting started. The number of sustainable coworking spaces is also growing fast; green boutique coworking spaces and networks of sustainable workspaces are popping up around the world. Upflex is happy to count many of these spaces as a part of our sustainable network.
As flexible workspaces and remote work rapidly change the way individuals and companies approach business, we will continue to strive to ensure access to high-quality spaces, improved service and innovation, and we are confident we will have a positive impact on communities, individuals and our planet.
Have a restful and happy holiday season with your family and friends. I look forward to working with you all in the New Year and wish you a successful and prosperous 2020.