While in March and April it was still too early to draw conclusions on whether remote work methods could substitute for a traditional setup, by June, many companies have now figured out the pros and cons of both working styles. Using an office in full continues to be troublesome, dangerous, and unnecessary. On the other hand, giving up on space lease completely is not a great solution either. Therefore, tenants are looking for a hybrid solution, which would allow for maximum flexibility in space arrangements, employees’ safety and efficiency, and cost optimization at the same time.

Long term leases have become even more challenging for tenants. Headcount became very volatile and quarantine restrictions might be reinforced periodically over the coming years. On top of that, new IFRS accounting rules require treating leases as costs rather than expenses. Reporting a multiyear lease liability on balance sheet effect company’s access to capital. Therefore, flexibility in lease terms and space size are relevant as never before.

New Approach to Workplace: Physical Component

For decades, an office was seen as a default workspace for white collar staff. However, new rhythms of workers’ lives and health constrains suggest that employees’ face to face communication can happen in other places. Instead of renting a single office in CBD, a more accommodating and cost efficient option could be a distributed workplace solution – a network of physical places, connected by a digital collaboration tool.

The physical components of this workplace solution could include: 

• a net of co-working spaces across residential areas, so that the majority of employees could reach it by walking;
• a large open air space for a corporate event, rented on demand;
• a cinema hall could be a perfect place for holding a training session;
• a smaller size headquarters in CBD might be still the best venue for shareholder meetings;
• bars, restaurants, or hotel lounges might accommodate an informal meeting. Such venues could build up into a “space partners network” and accept bookings on demand through an integrated workplace digital tool. For example, a project team generates a request: 2 hour meeting on Monday or Tuesday for 5 people. The digital tool analyzes everyone’s schedules and locations on those days, checks availability across all “space partners”, and makes suggestions. Once confirmed by all participants, a booking request is sent to the venue, and the event is saved in everyone’s calendars.

As a result, a company is no longer an office space tenant, but a real estate customer, looking for a holistic spatial solution. Ideally, space rent should become a variable cost rather than a fixed one. In fact, rent does not have to be a separate line in company’s budget and balance sheet, but might rather be treated as a function/department/event related expense.

The above workplace trends are already starting to unfold, and should become the key consideration for tech companies and startups in their endeavors to come up with new proptech ideas.

Digital Component’s Functions

Every company, adopting a distributed workplace solution, would have different geographical requirements and space type preferences. Such extreme fragmentation creates a demand for a digital solution, which would enable employees to seamlessly integrate their remote and on-site work into a smooth and frictionless process.

Space safety concerns are currently on the forefront and, certainly, need to be addressed and supported by the digital solution. Such supporting functions could include:

• control over density in an office building and other spaces;
• generating an elevator use schedule in order to avoid queues;  
• help to avoid using public transport in peak hours, when arranging employees’ meetings schedules

However, scientific evidence on COVID-19 risk factors and workplace safety recommendations change on a weekly basis. Therefore, all components of such spatial solution should be designed in a way, allowing for quick adjustments.

The most important add-value functions of a tech solution are about generating insights on how different space use patterns affect employees’ productivity and general well-being. It is doubtful, however, that one single product might satisfy this need in full. In order to generate information, which  would be meaningful and useful for companies’ management, tech players would need to achieve integration among software of different types – from collaboration tools to IoT solutions. Data sets, generated from multiple sources, would require recalibration before any analytical and visualization tools can be applied.

The next step on this path would be developing solutions to perform cost/benefit analyses of different spatial strategies. The purpose of such analysis is to find correlations between costs of rent, transportation, payroll, talent acquisition and retention, etc, and increase of revenue due to employees’ higher productivity, satisfaction, loyalty and wellness in general. Developing such algorithms seems to be a more complex task, than the preceding discovery of correlation between a workplace and productivity. However, defining relations between physical and digital world is the critical leap here, which can become a ground for developing multiple add-on solutions.

Photo by Alejandro Escamilla on Unsplash