The Covid-19 virus hit co-working and flexible office operators hard, but Mike Smithing of New Work Offices says the shock has produced new opportunities.
The co-working and flexible office space trend is being put to the test by the Covid-19 pandemic on multiple levels. The most urgent concern for all businesses will be cash flow, since it was always going to be difficult for shared office spaces that stress flexibility above to collect all the rent theyâd contracted. For those who survive, however, the novel coronavirus outbreak could be a game-changer following a once-in-a-lifetime occasion in which every single office worker around the world who could work from home did so. Thereâs no way the worldâs corporations wonât be evaluating this experience to decide what worked and what didnât. Long-term changes in the way they organize work and use office space appear unavoidable.
But there are numerous short-term opportunities for this new type of office space, says Michael Smithing, Chief Development Officer at New Work Offices, which has been building a network of multiple office locations in CEE capitals like Budapest, Prague and Warsaw. â âI think that as soon as things open up again we will be hit with a storm of demand,â he predicts, explaining that as managers realize they canât fit everyone into their exisiting offices under the new norms of social distancing.
âAre you going to want to take out another five-year lease on a couple thousand square meters extra? Probably not. Because you donât know yet when you can redensify, or even if you will ever be able to redensify, so you have to play it by ear.â This is the dilemma that will result in a search for solutions. âMaybe theyâll choose to have a rotation, where people work at home for two or three days per week,â he says.
But while weâve all learned that itâs possible to work from home, weâve also learned about the realistic pitfalls and distractions it brings with it. The answer for some managers will be to look for temporary spillover space. âYouâre never going to be able to get rid of offices completely because people want a place to be together,â says Smithing. âThat needs to be maintained because itâs the grease that makes a lot of companies work. Culture doesnât come from the manual they give you when you join — it comes from the water cooler.â The idea is to figure out who needs to be in the office, or how much each person needs to be there, and then to decide where the person will work when theyâre not in the office. Many companies are thinking in terms of core, and flex personnel. âA company like Deloitte have a certain amount of people that need to come to work every day,â he continues. âThey have another set of people that really only need to come to the office maybe one day a week, if that, and some will be working from clientsâ offices except for two months per year. Do those people need a permanent desk?â New Work wants to offer more than one location in each city so that companies with employees who spend most of their time in meetings can have the flexibility to choose where to work, or to hold meetings from.
But Smithing admits the pandemic has caused significant short-term problems for the company, since just 15-20 percent of their usual customers were coming in during the lock-down. A lot of tenants asked for rent reductions, or to be released from their contracts, which the company dealt with on a case-by-case basis. More seriously, New Work decided to close its Bucharest office, opened as recently as last fall, as well as its space in Ukraine, where the landlord took on New Workâs staff.
