Companies

The Future of the Office

Mark Dixon

We speak with International Workplace Group CEO & Founder Mark Dixon about the trends shaping office spaces today and what the future of the office looks like.

What’s the biggest trend shaping office spaces today? 

The long-term shift towards hybrid working is one of the biggest mega trends of our time. The research by leading academics such as Professor Nicholas Bloom, a senior fellow at the Stanford Institute for Economic Policy Research and acknowledged as the world’s leading authority on the hybrid model, has shown that about 40% of white-collar employees now work in this model and will continue to do so in the future.

This move towards hybrid is having a big impact on the real estate sector and how companies of all sizes and their employees use office spaces. First, companies are downsizing in city centers, replacing long, restrictive and expensive leases with flexible space with operators like IWG. Second, they are taking on flexible workspaces in local neighborhoods, closer to where their people live and want to be.

The reasoning for the transition towards hybrid working is clear and compelling for companies and their employees with positive impacts on productivity, lower costs, increased flexibility and above all significantly enhancing worker happiness.

According to IWG’s CFO study, half of the financial leaders surveyed have already opted for some form of hybrid working solutions. 

How does the future of the office look like?

The reality is the office is far from dead; it has just moved to a much more convenient place in the heart of local communities where people actually live. We will continue to see a shift towards more localized working in the coming months and years.

Global businesses are increasingly changing to a hub and spoke model, with smaller central offices, more regional hubs and growing numbers of local satellite offices. The concept of the 15-minute city — the idea that any place you’d need to go will be within a 15-minute walk or bike ride of one’s home — is growing in popularity for a reason. In addition to being environmentally friendly, the 15-minute city saves time, is good for individuals' health and fosters community. It’s also a win for employers because a happier workforce is a more productive workforce.

What’s the biggest challenge facing office space management? 

The biggest challenge is for companies that are already stuck in long conventional leases. As we have seen over the last four years or so is that companies are exiting these agreements as soon as they are able and moving to a much more cost effective and productive model for the business and one that offers employees an improved work-life balance and greater happiness.

Which specific trends in your industry are you most excited about?

Today, the remarkable advances in cloud technology and video conferencing software are both vital to enabling effective hybrid working, meaning workers no longer need to travel long distances on a daily basis. As a result, we are seeing a fundamental shift in the geography of work with the center of gravity moving towards local communities. Tech changes will continue to advance in years to come and will radically underline and advance the flexibility of location.

The emergence of new technologies will continue to enhance the hybrid experience and Microsoft Teams and Zoom have already rolled out a number of significant improvements in the last year alone. This year and beyond, we expect to see AI increasingly powering hybrid solutions in a range of clever ways, from office space optimization to automatic translation and gesture recognition in virtual meetings. 

We’ll also see more of the so-called ‘Enterprise Metaverse,’ pioneered by the likes of Accenture, allowing hybrid and office-based workers alike to meet and collaborate in a virtual world. 

Do you have any unique predictions on the outlook of your industry?

The flexspace industry will grow rapidly over the coming years. From about 5% of the overall office market today, it is estimated to expand to around 30% by 2030 (JLL). 

IWG’s network is already growing at pace. Last year, we signed well over 850 locations including 370 in the U.S. and this will further accelerate in the coming months and years.

The future of work has always been shaped by technology as we saw, for example, with the advent of email. Firms that failed to embrace the technology didn’t stay around much longer and it will be similar for companies with white collar workers that fail to embrace hybrid working.

This interview originally appeared in our TradeTalks newsletter. Sign up here to access exclusive market analysis by a new industry expert each week. We also spotlight must-see TradeTalks videos from the past week.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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