The COVID-19 pandemic spurred a massive work-from-home experiment in the United States. But what happens once the pandemic is behind us? Will companies force employees to return to centralized offices? Or will they explore other more flexible workplace models?
Wayne Berger is betting on the latter. And he should know: He’s chief executive officer for North America and Latin America for IWG, a global provider of flexible workspaces. Berger, then, understands the office sector and the market for flexible workspaces.
He expects a shift in the office world after the pandemic, with a growing number of companies offering their employees the flexibility to work from home, a centralized office or a network of smaller satellite offices, depending on the tasks these workers have to complete each day.
Berger and his fellow IWG officials, then, are expecting a bright future for the office market and flexible workspaces. This is reflected in IWG’s move in early February to sign its first U.S. franchising deal to open Regus co-working locations throughout the Detroit area. The first center of the seven-center deal will open at the end of the first quarter of this year.
Berger recently spoke to Midwest Real Estate News about the future of the office sector and the growing demand for flexible workspaces.
Here is some of what he had to say.
Why did IWG decide on Detroit for a franchise deal with Regus?
Wayne Berger: Detroit is an exciting place right now. It has gone through a remarkable resurgence during the last 10 years. We wanted to be part of this. Good things are happening in Detroit, not just from an economic standpoint but from a cultural perspective, too.
There’s been a return by workers and companies to Detroit and the greater Detroit area. There is a great need for flex space and co-working solutions in Detroit. We think our new centers will help fill this need.
That need for flexible workspace, do you think it will continue to grow after the pandemic?
Berger: During the last year, we have all been participating in the world’s largest work-from-home bubble. Right now, in the short-term, we are seeing a move away from the traditional office in a central financial district toward a geographic distribution of workers that is more spread out.
We are seeing this interesting growth in flex space within the suburban market but also within cities like Detroit. The trend now is pretty clear: Companies are realizing that it doesn’t always make sense for all their employees to always be working in the same space at the same time.
Flexibility is already becoming the norm. Right now, we are seeing more employees who can work from home if they want, go to a corporate headquarters when the need presents itself or go to some other office space in the middle of those two options.
That third space is so important. People want the ability to leave their home and walk, bike or drive a short distance to a flexible office space that has all the amenities they need.
There are so many benefits to this type of work arrangement. It’s such a positive for workers. It gives them the ability to secure a great job with a company in traditional markets like San Francisco and Manhattan but to actually do their work and live in a great city like Detroit.
This trend is getting a lot of attention today. But the demand for flexible work arrangements has been growing long before the COVID-19 pandemic, right?
Berger: More than 50 percent of the global workforce before the pandemic was working from somewhere other than a traditional corporate headquarters at least part of the week. This trend has been in place for a number of years and was accelerating before the pandemic. The pandemic, though, put a spotlight on working from home and working remotely.
Some companies have long embraced this, but others have been more traditional in their approach. They’ve wanted their employees to come in every day to a central office. But what is happening now? The world has been participating in this work-from-home experiment. Companies now see that this flexible work model can work. We can be very productive even when we’re not working every day in a central office. We can be very engaged.
Flexible work improves people’s lives. They gain more time back when you eliminate those long commutes. They can invest in other areas of their lives while investing the same if not more time in their jobs. There are some great benefits companies and employees receive when workers have the flexibility to work in whatever space is best for them.
I know this was a trend before the pandemic, but many companies still didn’t like the idea of their employees working off site for a good chunk of the week, did they?
Berger: Companies had to see that people can be effective and productive when they’re working remotely. They don’t have to travel every single day to one defined location. We are already seeing more companies every day starting to define and deploy a post-pandemic strategy that includes a permanent shift to giving their employees the opportunity to work from anywhere.
Just look at Salesforce and Dropbox. They’ve said that moving forward their people can work from wherever they need to work as long as they are getting the job done. They can work from home. They can work from flex space or they can work from a company office. As long as they are achieving their goals, they don’ care where these employees work.
This is not going to be rare. You are going to need a hybrid working philosophy to attract the best workers. I already know that I am not going to be able to go back to a traditional work setting after the pandemic. At the same time, I don’t want to work from home all the time. I love working from home when it makes sense. And I like going into my office depending on what is on my plate for the day. I also want the flexibility to work from other offices that might be closer to me. I’m not alone in this. This is a multi-generational trend. It’s not only something that the younger workforce wants.
Is there a benefit to so-called second- or third-tier cities from this trend?
Berger: As workers start to shift to working in flexible space, you will see a greater investment in the local economies of these other cities. If people are working in flex offices in suburban locations, for example, they are going to need more of those traditional services that they would access in a downtown market. You’ll see more restaurants, shops and services in these markets to serve the workers there. That’s a nice economic benefit.
At the same time, workers will continue to work in downtown offices. The downtown cores will continue to grow and flourish. The traditional corporate headquarter will shift and change. It will shift toward the destination you want to travel to, not the one you have to travel to every day. Now it will become a place that is more focused on amenities and on collaboration. You’ll see more common areas and more meeting space. It will be the place you go for a corporate retreat or a town hall setting, an opportunity to get together with the boss on a collaborative session.
Can you give an example of how employees might rely on different workspaces in a post-pandemic world?
Berger: If I have a day where I am jammed in meetings, where I will be constantly on my phone or Zoom, that’s a day where I might just work from home. Or I might choose to work at a flexible workspace that is close to my home, one where I can walk, bike or drive there in five minutes. That flexible space might become my main go-to office.
There might be times where I have to meet with clients. I might choose to meet them at a location that makes more sense for those clients versus having everyone always travel to one central location.
When the pandemic started, many people were thrilled to work from home. Have you seen that start to wear off now?
Berger: Working from home is a dream for people who have the right situation. If you have a lot of space and you have the opportunity to change your workspace throughout the day, working from home is ideal. If you have really good broadband and Wi-Fi and you have access to a quiet space, it can be a great situation. The reality is, not everyone has that perfect scenario. We are seeing that people are getting work-from-home fatigue.
What we have seen from people is that they want working from home to be a part of their future. But they are also looking for choice. They want to work from home when it makes sense and work from an office when it makes sense. They also want something in the middle. They want to leave their house, stop at a local café and get their coffee and then work a short distance from their home. It’s about choice. We have seen the brilliance and benefits of working from home. But we also see the importance of working in other spaces.