Tip of the Month for July 2018

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End of the Traditional Office: Fact or Fiction?

End of the Traditional Office: Fact or Fiction?Brick and mortar versus the virtual office. It’s a dynamic that’s been ongoing for a couple of decades. But you might be wondering: how much has the traditional office really changed?

Some Facts to Consider

For perspective, consider data gathered by the International Workplace Group (IWG). IWG’s study, which included more than 18,000 professionals across 96 companies, found that 70 percent of employees worked at least one day a week somewhere other than the office. (While they didn’t specify, one could guess that this might be home or a “third destination” like Starbucks or a bookstore.) The study also revealed that more than half of the people surveyed worked remotely for half of the week or more, while 11 percent worked somewhere other than their company’s main office location five days a week, which could be a smaller, satellite office.

In addition to flexible work schedules, which presumably made employees more productive and happier, the study highlighted several tangible benefits:

  • Business growth (89 percent; up from 67 percent in 2016)
  • Competitiveness (87 percent; up from 59 percent in 2014)
  • Productivity (82 percent; up from 75 percent in 2013)
  • Attracting and retaining top talent (80 percent; up from 64 percent in 2016)
  • Profit maximization (83 percent)

As you can see, the effects of working outside a traditional office can be beneficial both physically (to the employee), as well as fiscally (to the company).

But in addition to the obvious technologies like conference calls and video conferencing, which have influenced work styles for some time now, what else is going on that’s causing this shift? In a word: millennials.

Millennials: What They Want

According to the U.S. Census, millennials (born between 1982 and 2000) make up one-third of the workforce and outnumber baby boomers. Millennials place a premium on happiness and a good work-life balance. They believe the more comfortable and satisfied they are, the higher their productivity will be. In fact, these employees who were born in the last decades of the 20th century were pivotal in contributing to the advent of a brand-new work configuration: shared office space.

The Rise of Shared Office Space

If you don’t know what this is, here’s another way to explain it: it’s an independent, satellite co-working space that allows for many different individuals and companies to carry on their daily job tasks. These spaces may include perks like a gym, for which they can pay a monthly fee, along with access to resources such as meeting rooms or special equipment. Not a bad setup.

This phenomenon is not just the flavor du jour. According to Forbes, it is projected that 26,000 new spaces will host 3.8 million workers by 2020. So, what’s the attraction? These shared, open venues allow for more businesses to collaborate, which is attractive to these young professionals, many of whom are entrepreneurs. Here are a few other reasons shared offices spaces are all the rage:

  • Lower costs. They don’t have to clean them and keep them maintained.
  • Less commitment. They don’t have to be shackled to a lease.
  • Start-up friendly. With the small budgets of start-ups and the low rent of shared places, it’s the perfect combination for this entrepreneurial demographic.
  • Urban-centric locales. According to Nielsen, 62 percent of millennials like cities. They want to be where the action is, such as trendy restaurants, grocery stores and theaters.
  • Reject traditional offices. Yes, they are rebels; they are very much into individual expression.

However, this is not to say traditional offices are becoming obsolete. The buildings that pierce the sky in most major cities aren’t going anywhere and chances are good we’ll still see plenty of new construction. It’s just that these work places might not be as fully occupied. In terms of long-term growth potential, that’s a positive.

Sources

Global Banking & Finance Review: The End of the Traditional 9-5? IWG New Study Finds 70 Per Cent of Us Skip the Office to Work Elsewhere

The Odyssey - The End To Traditional Office Spaces

US Census Bureau - Millennials Outnumber Baby Boomers and Are Far More Diverse, Census Bureau Reports

Forges - Why More Millennials Are Flocking To Shared Office Spaces

Small Business Labs - Coworking Forecast - 26,000 Spaces and 3.8 Million Members by 2020

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