Flexible workspace is the future, but it faces challenges
Questioning how workplaces operate is remapping everything we thought we knew. In this fluid landscape, some will thrive and others will fail. This is the way markets function, but it is essential that both as an industry and as a government, there is an environment which supports and promotes workplaces and the customers they serve.
When the BCA was launched it was into a world which was all about the corporates with a tiny space carved out for non-conventional operators. Fax machines were still used everywhere, and phone calls and letters rather than email was the way to communicate.
Twenty years on and advances in technology have transformed the way in which we can, and do, work. The revolution in flexible workspace gives rise to innovations such as Hubud in Bali, a co-working space in paradise, fully connected and working with the rest of the world.
Flexible workspace culture is promoting a lifestyle, not just a place to do business
Where technology is often criticised for breaking down personal relationships, working environments are coming full circle with new generations of employees and companies pushing back against the traditional office in favour of community-focused offerings which also have wellbeing at the heart.
Alongside this is the emergence of disruptors promoting lifestyles not simply offices; brand is now as important for operators as it is for their business customers.
As recent CBRE research shows, there is a widespread acceptance that the flexible revolution is here to stay. Even the FTSEs are getting on board with communal staircases and breakout spaces across HQs, focusing on wellness and encouraging a more familial and collaborative approach to work.
But, when it comes to operating their own flexible workspace, do they know how to manage and maximise the opportunities? Not until traditional companies finally start calling tenants customers, will we know that they fully understand the new world in which they are working.
Current business rates unfairly penalise the flexible workspace sector
These changes are undoubtedly significant contributors to the rise in the number of fast-growing small businesses in the UK and the collaborative, international approach of many new businesses. However, the pace of change has left many far behind, not least legislators, and this risks undermining what is a fantastically strong part of the UK economy.
For one thing it is not all about the next new thing in office space. In the North East and North West there has been significant growth in the demand for “easy in, easy out” light industrial space, driving supply chain economics and supporting regional economies and industries. The value of this in terms of the UK economy, particularly in the context of Brexit, cannot be overstated. This is something which must be nurtured and encouraged to continue to grow. Empty rates and complex tax treatments on leases does not support this position.
Outside the global challenges which need to be navigated as best we can, the biggest challenge comes from the lack of understanding of our own policymakers; the current system of business rates unfairly penalises the flexible workspace sector and particularly co-working.
In some cases, rates have increased by 500 per cent; overall, in London the business rates bill for the 340 open workspaces in the Greater London Authority database has almost doubled from £5.58 million to £10.59 million.
These are costs which act as a brake on the economy, risking bringing growth to a shuddering halt as space providers and small businesses alike are pushed out. Government has so far been woeful in its recognition and motivation to address this issue. The workplace is dead, long live the workplace.