Within two years the millennials will make up half of the labour force. The way in which this generation looks at work is changing the office paradigm. And as with other aspects of their lives, flexibility is a word that is worth millions.
They are the generation born in the eighties. The music they heard in their youth went from the grunge of Seattle to the rap of the Bronx. The world did not end in 1999 and, just when their careers were starting to take off one of the largest financial crises in living memory took place.
At that time they understood (if they had not understood before) that the future depended on them. And that work, as they had known it until then, had to change. The economic crisis has not affected just the millennials. All sections of society sought disruptive forms of reversing the crisis. And the office market was no different. With a generation of new entrepreneurs working in cafés or at home, it became necessary to rethink the office model. It would have to be… flexible.
Flexible offices became an integral part of the great metropolises. Regardless of their size, which can go from a desk to thousands of workplaces, they are spaces that can be rented for a short periods of time (e.g. hours, days or months). A number of expressions are in use such as co-working space, incubator and accelerator, which all have different goals and services. But the recipe appears to be a mixture of all of them. A hybrid that has the advantage of uniting the features of each model in order to adapt better to tenants and the needs of the owners. In other words, supply and demand.
What has changed?
Essentially three things: an unprecedented technological revolution, an economy that needs new ideas to make it sustainable, and a willingness to change the future, reflected in the millennials’ attitude.
The world has never been so portable. Since it is, we can work at anywhere. The great advantage is that if the commercial rep of a transport company in Cyprus needs to come to Lisbon, they can make appointments, have a conference call with the head office and get home before the Asian market closes. All thanks to their membership and the co-working app that they used to book a space to work at a temporary branch in a city over 5,000 km away. In the same way that our commercial rep booked a day at the nearest co-working space, some 1.7 million people will do the same thing in 2018, according to the 2018 Global Coworking Survey undertaken by Deskmag. If this type of supply did not exist, millions of people would have to resort to the wifi of a bar in downtown Lisbon to close a contract. On the other hand, the response to the economic crisis marked a radical change in companies. Across the board there was growth in SMEs. For example, in France the number of SMEs has grown by 16% since 2015. While in the Netherlands the increase has been an incredible 40%. Flexible offices have become more attractive with their short-term low rents, while offering, at the same time, the convenience of an office in a large company.
But the main reason for the success of flexible offices was the life choices of the millennials. According to CBRE’s report Live Work Play, 78% believe the place of work is as important as the employer and 69% would exchange more traditional benefits for a better working environment.
Focus on the user experience
Today there are high expectations that the work space will be an experience. The CBRE study EMEA Occupier Survey 2018 identifies three pillars that absolutely determine whether a real estate strategy will be successful: technology, flexibility and well-being. In this sense, and according to the research conducted among finance, technology and science companies and others, we find that 80% of flexible spaces have well-being programs or plan to have them. Equally, 56% believe that the focus of technology should be on the user experience and 46% believe that flexible offices are the key to retaining talent.
Today companies focus on retaining and attracting talent and promoting innovation. André Almada, Senior Director, Advisory and Transaction Services, Offices, CBRE Portugal says: “The value of flexible spaces in office buildings is on the rise to the extent that they are in-line with the new working philosophies and, for the occupiers, they can be financially interesting, to the extent that they only use the space they need”.
The CBRE study The Flex Revolution states that 84% of owners feel this change is here to stay. For Cristina Arouca, Director, Research, CBRE Portugal “The sense to share in the younger generations is so profound that it extends into their work habits. Flexible spaces permit people from different professional and sectoral backgrounds to come together, many of them new to being entrepreneurs, that benefit from idea and knowledge sharing. This is one of the main reasons why large corporations have also adopted these kinds of work spaces to develop new projects: besides the flexibility of the space (there a lower cost associated to it), it’s usually closer to a younger community, which most of time is their target, which enjoys an environment that is more creative and facilitates de fruition of new ideas”.