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Flexible Space by WeWork, the Future of Poland?

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The Rekruter editorial team first spoke to WeWork in July 2018, just after the firm had announced its plans to open its first office in Central and Eastern Europe, in Warsaw. Back then, Mikhail Konoplev, VP & General Manager CEE at WeWork shared how there was ‘flexibility to move between WeWork offices on a global scale.’ Today, the company is embracing the future and its flexible office space solutions. The pandemic has meant that the flexible office space has reached a new level of significance.

For many, ‘flexible space’ is still more of a concept than a reality; similarly to using a good recruitment partner or choosing a trusted business coach. The options of using a more flexible approach to your office space is one of the next opportunities created by ‘digitalisation’ for firms to embrace.

Once the sole realm of start-ups, Google campuses and start-up accelerator programmes opened the concept of flexible office space to tech entrepreneurs. Today, any and all companies can use the benefits of coworking offices across the whole world, the CEE region, and Poland.

Social Workplaces published an analysis of Europe’s coworking space, listing the UK as the clear #1 market for coworking. The study also shows that Italy and Poland have lower amounts of national coworking brands within their borders.

The report does not convey the whole story though. Poland may not be as far ahead as the UK or France in the coworking space, but it has a very different offering for entrepreneurs and businesses. The Polish office market is characterised by a number of office hubs, a JLL article concludes that Warsaw ranks as the 11th most competitive location in the world in terms of occupancy costs for premium office buildings.

Poland has all the arguments in its favour to confirm its dominant position among the world’s elite destinations in the business services sector,” says Mateusz Bonca, CEO of JLL Poland. “Importantly, business is now won to a much greater extent through innovation, high quality output and the specialization of processes conducted in Polish centres.”

One thing is for sure; Poland does not lack innovative ideas. For instance, in 2017 Polish Idea Bank trialled the idea of turning carriages on intercity trains into coworking spaces. They haven’t thought of that in London, have they?

The Polish office market has a great chance to be a flourishing industry in the new era of office decentralisation, and WeWork can take a leading role.

‘Flexible Space’ in the era of office decentralisation

Over the last 18 months the pressure to digitalise has been immense, no matter the industry. A story on the World Economic Forum’s website from October shouts the now famous headline: “go digital, or go bust.”

A by-product of the pandemic and this vast digitalisation is that more and more jobs can be completed remotely. During the pandemic, for instance, accounting, payroll, and a host of other ‘support functions’ were delivered from people’s homes for the first time. In fact, remote working has changed the way we look at our office space forever – it has opened the door to office decentralisation.

Office decentralisation refers to the phenomenon that more and more employees would opt to work from home even after the pandemic and are reluctant to return to the office. Companies face great pressure to take a stand on the issue. Goldman Sachs CEO David Solomon is perhaps the most well-known figure criticizing this idea and arguing heavily in favour of the return to the pre-pandemic status quo.

Many employees who have saved a lot of time these past months by not having to commute long hours might not be so eager about the idea of returning to the office. On that note, Deloitte has announced that its employees can choose to work from home permanently.

Though various companies and employers will likely choose different attitudes regarding the office question, a JLL report published last July can help us understand what to expect from the future of the office space market. The most important takeaway from the report is that the future of real estate is a spectrum of flexible spaces.

For those who might be a bit confused about what this exactly means, let’s take a closer look. Home office, one of the most frequently used terms during the past year, is often thought of as the contrary of the classic office-based role. These two, however, only represent their respective corners of the workspace flexibility spectrum; home office is the most flexible solution, long-term traditional office space the most rigid. Along the spectrum are also, from less to more flexible solutions, short-term spaces for 2 or less years, ad hoc single coworking locations, and on-demand individual desks or meeting rooms by the hour or week.

Needless to say that the flexible space market has been hit exceptionally hard by the coronavirus outbreak. In Q1 2020, flexible space leasing was down 84% year-over-year in New York, 83% in Central London, 52% in Paris, 44% in Hong Kong, and 20% in Warsaw.

The fact that freelancers and startups opted to work from home, significantly contributed to the fall in demand for flexible office spaces. Government regulations negatively impacted the sector, too. 2 metre social distancing rules, for instance, have considerably reduced the seating capacity within a given property. This, in turn, drove away much of the revenue of space leasing firms profiting from high density of space and rental arbitrage.

However, the report by JLL predicts that when the pandemic comes to an end, the flexible space market can expect a strong rebound, so much so that 30% of all office space will be consumed flexibly by 2030.

Last year, we could see a lot of fluctuation in the flex segment, which translated into significant changes in rates per workstation. Currently, we are seeing a stabilization in prices and we can assume that the worst is behind us”, explains Adam Lis, Flexible Office Solutions Manager at JLL. “Currently, the occupancy of flexible offices in the central office zones of Warsaw remains at a fairly high level.”

The demand for flexible space post-Covid could likely be driven by the same factors that caused its initial boom prior to the pandemic, such as real estate portfolios becoming more agile, reductions in lease duration, and prioritising health and well-being in the office.

The report also predicts that there will be an increase in workplace mobility programs after the pandemic, emphasizing remote-working and creating a reduction in density in both traditional and flexible offices.

In a revived post-pandemic market where flexibility is high on the corporate agenda and the purpose of the office is centred around collaboration, flexible space should emerge stronger than ever and growth could quickly return to its impressive pre-COVID rates. The need for an agile portfolio with a spectrum of flexible options has only increased due to the COVID-19 pandemic” the JLL report concludes.

WeWork, not your everyday flexible coworking space

Just like on the global scale, flexible space is an aspect of the real estate market that has been slowly appearing on the radar of companies for decades, in Poland, too. Real estate is one of the most traditional and longstanding markets, and up until recently there hasn’t been any significant pressure on the system to change.

Consumers on the real estate market, looking for an office solution to their company, were usually ‘stuck’. They often had to take the space that was being sold/offered and that was the right size for their workforce. These solutions rarely took into account how teams actually worked – or how they worked efficiently, for that matter – and therefore how the office should support their unique work culture.

wework

source: WeWork

WeWork has aimed to break out of this antiquated market solution and take the office experience to the next level, not only providing new real estate alternatives but also focusing on the customer. The team at WeWork carefully designs its spaces to be the right mix of focus, creative, formal, and brainstorming areas, to support all workstyles and networking.

Well-designed workspaces must carefully balance the proportion of focused work, interactive areas, and social spaces, and this is where easily configurable spaces have an advantage,” shares Julia Gebala, Area Director at WeWork Poland. “At WeWork, we work out how much space is taken up by each area individually with our member companies based on their feedback on the working styles of their teams.

WeWork has a principle that is kept in mind in all its branches around the world: it only chooses class A locations in key business districts or up-and-coming areas where talent lives or likes travelling to. This principle is reflected in Warsaw, too. Three of the five WeWork locations in the city are located in the rapidly advancing Wola District. The biggest one, in Mennica Tower, provides over 2,500 desks.

Mennica Legacy Tower

source: WeWork – Mennica Legacy Tower

Different from open-plan, café-type coworking spaces, WeWork offers various types of office space and respective memberships:

The majority of the space in WeWork buildings consist of Private Offices, secluded with glass partitions. These are most often rented by companies for their teams, who can use these offices exclusively, on top of all the open-plan community floors with pantries, lounge areas, barista stations, and terraces. These private offices range from one person offices to entire floors, or even buildings.

Members can rent their Dedicated Desks, with a locker, in a lockable private office shared with other members. Here, they can leave their monitors and personal belongings overnight. This option is popular among freelancers, consultants, as well as graphic designers.

WeWork’s most flexible option is Hot Desking. With this option, our members can simply choose a free desk in the common areas of their preferred WeWork location. During the pandemic, WeWork has advanced this product to account for the increased flexibility demanded by many workers. Instead ‘hotdesking’ at one location and having to pay extra when using other locations, WeWork introduced All Access, so members can use all 770 locations in 38 countries at no additional cost, simply by reserving a desk via the WeWork app.

On Demand is WeWork’s pay-as-you-go model. The development of this feature has also been accelerated due to the increased need for flexibility during these unprecedented times. This product is currently being rolled out internationally, and is not yet available in Poland.

Besides the office infrastructure, WeWork members also benefit from a wide range of free events, from yoga classes to language courses, networking events or mentoring. Currently most of these take place online, but are offered almost every day. WeWork has a community team, too, the members of which have a background in the hospitality sector. The role of this community team is to get to know all the members personally in order to support them where possible.

WeWork also has a digital feedback and ticketing system that is carefully monitored, so that the company can make adjustments to the space and services as needed, hereby constantly improving the customer experience. Executing this innovative idea on a large scale, WeWork has introduced a new way of thinking about the office and work in general.

WeWork’s time to shine

Despite how hard the hit, that the flexible space sector has taken from the pandemic and government guidelines, WeWork has not only survived this past couple of months but is looking forward to a revival.

The company recorded its strongest sales months in Q2 2021, both globally and in Warsaw, since the beginning of the pandemic. This is because the pandemic has put resource efficiency, realistic planning horizons, and employee well-being in the spotlight, Julia Gebala thinks.

Perhaps one of the main consequences of the pandemic is a change in our values, both personal and professional. Flexibility, trust and safety have become critical factors that not only affect the well-being of employees but also increase business performance in the long term and help attract talent. We see that flexibility will play a decisive role in the formation of new organizational formats, which will be based on the needs and interests of employees. Trust and autonomy from employers and colleagues are some of the most important factors for happiness at work and, as a result, productivity. Through the ‘home office experiment’ of the last 18 months, a new level of trust has been formed between employers and employees: One of the main factors influencing this feeling is the ability to choose when and where to work.”

Many start-ups ‘growing out’ of Warsaw and aiming to expand internationally choose WeWork’s one-stop-shop solution. This allows them to test the waters in new markets without having to spend resources on setting up an office in those markets. With WeWork, they can scale their desks up or down monthly, hence only paying for as many desks and months as they actually need, while being able to solely focus on their business.

Concurrently, big companies show an increasing interest for the Hub & Spoke Model. This refers to corporations that have their own headquarters, with long-term fix contracts, now aiming to reduce this space to a core team or for core meetings. They would instead add flexible ‘satellite offices around town’ to their portfolio, which can be used by their teams more flexibly tailored to their needs.

This strategy reduces the cost-heavy fixed square metre space needed and, in turn, rent commitment for the company. Simultaneously, it also reduces commuting times for the employees and gives them more flexibility, leading to increased productivity, motivation, and loyalty to the firm. It is a win-win solution.

With 500,000+ members around the world, WeWork has established itself as a leader in the flexible office market space. This diverse customer base has provided it with unparalleled expertise on how to support setting up large businesses. Thanks to this reputation, many enterprises and companies in Warsaw turn to WeWork as a partner when it comes to navigating in the new world of work.

Combining the forces of the expanding Polish office market, the push for office decentralisation, and the increased attention on employee well-being, it is certain that the story of WeWork will continue to evolve in Warsaw, and hopefully in other parts of Poland and across Central Eastern Europe, too.

Read more about wework: https://www.magazynrekruter.pl/duze-korporacje-szukaja-alternatyw-jedna-z-nich-jest-coworking/

Author: Benjamin Jenei

#OfficeDecentralization #SpaceAsAService #StartUps #FlexibleSpace #CoWorking