Flexible spaces: why it’s cool to co-work
Glenn Baker, editor of NZBusiness, December 2019
Shared workspaces have been accelerating exponentially across New Zealand’s towns and cities in recent years, so NZBusiness sat down with providers and users to better understand the benefits, the issues, and the realities.
In the process of researching business stories I’ve visited a number of Auckland’s shared workspaces, and although each has a unique environment and configuration, I’ve noticed they all share a common vibe of quiet productivity; they ooze style and shout professionalism.
For business owners and entrepreneurs they offer a whole new level of collaboration.
While every co-working space is different, one user summed up his experience as “being amongst a community of like-minded, interesting people and businesses, which makes for a much more dynamic environment, and provides strong opportunities for networking and collaboration”.
Why have shared workspaces proliferated around the country in such a relatively short time? For some answers NZBusiness caught up with Pierre Ferrandon, country manager of IWG, the flexible workspace multinational behind 16 locations in New Zealand, including two Auckland BizDojo locations, as well as the Regus brand and Spaces – a design-led concept which has close to 300 facilities worldwide and is opening its first New Zealand offering on Auckland’s K’ Road on November 18th.
Ferrandon explains that New Zealand is finally catching up with overseas markets, and it’s all happening very fast. In Auckland Regus specifically targets the corporate and mobile user – businesses looking to enable their staff to work productively anywhere they need to. Its flexible workspaces play an important role in reducing overheads for businesses.
Flexibility is one key word driving all the shared workspaces we researched for this story – and that’s in keeping with another worldwide trend sweeping the world – that of flexible working.
“In Belgium, for example, 98 percent of workers will favour a company that has flexible working policies over [one that offers] a higher salary,” says Ferrandon.
In the Albert Street Regus space the mix is 70 to 75 percent private office, with the balance an open, shared environment. Naturally the office rental prices are based on location, type, size and term (and there is a premium offering, also located in Auckland’s CBD). Office space can be increased or reduced according to staff movements, therefore reducing the underutilised portion of space and its associated costs.
“With traditional workspace being used at only 55 percent capacity there is a 45 percent saving potential for companies who embrace the flexible workspace revolution,” says Ferrandon.
“From a business owner’s perspective, it makes it a lot easier to sleep at night since you are not signing for years of lease commitments.”
For people who travel a lot to meet their clients, Regus provides a membership option which gives access to a shared lounge space or private office anywhere within its network.
Regus also offers Virtual Office, a product that enables businesses to create a presence in any of the 900 cities Regus operates in.
Flexibility also applies to Generator, a shared workspace operator that’s been in the Auckland market since 2010 and currently has a total of 13,500 square metres of office space under its management.
“Being wholly owned by Precinct Properties since February 2019, the growth potential for our members is huge,” says Generator’s GM John Moffett. “If they grow too large for a site, or decide they want their own space away from Generator – whatever change they need to deal with in their business – we have the means to help them evolve.”
He says their newest option is a managed suite where Generator looks after the fit-out and operations, including all aspects of IT.
A number of members use this option because of its flexibility, where long term leases are a thing of the past, he adds. “An example is a multinational corporate who started with two people and now has their own managed suite for up to 65 people within one of our Generator sites.”
“Today it’s about being agile and efficient because what you don’t spend on an office you can spend on your people.” - Pierre Ferrandon.
Moffett says events management and hospitality make up a large part of their offering, differentiating Generator from its competitors and other global providers. Their largest space can cater for up to 299 people – anything from a two-to-20 person meeting to a larger conference, cocktail event or private dinner.
“Each of our sites also has an onsite bar/lounge, which is managed by baristas in the mornings, turned bartenders in the afternoons and evenings.”
Before you make the decision
There are a number of questions to ask yourself when considering a shared workspace for your business. If you have staff, determine how they prefer to work now and into the future. Do they even want to work flexibly? Do you require multiple locations?
Consider how your needs will change over the next, say, three years? Owning or leasing large, ‘flashy’ premises no longer make sense in 2019, says Ferrandon. “Today it’s about being agile and efficient because what you don’t spend on an office you can spend on your people.”
Managers also need to rethink the way their people work. “It’s about managing your people on their output, rather than hours spent in the office,” he says.
There are more practical questions to ask as well. Noise is a key factor, so consider the quality of the partitioning. Test the Internet connection. Is it high-speed? Is the bandwidth symmetrical (upload and download speeds match) and is there unlimited data?
Smaller businesses or sole traders will want to know if there is a strong community focus – for example, does the provider hold regular networking events? BizDojo, for example, has an ‘Each One Teach One’ program, where every member has a responsibility to teach someone else.
Also, consider what’s included for your monthly fee – it might be everything but consumables, for instance. Check the level of flexibility in your agreement, specifically the option to upgrade or downgrade – what is the minimum term and what is the price on renewal?
Making a shared workspace work
Once you’ve settled on a location, the key to making it all work is, in Ferrandon’s words, “simply a case of being a good human” – being conscious of others. If you have a salesperson, for example, constantly on the phone – you may want to allocate him or her a separate cubicle, or organise a private office.
“Make full use of your [office] commitment,” adds Ferrandon. “You don’t want to be stuck with paying for something you don’t need.” Longer terms attracts discounts, he advises, so consider that for your bare minimum staffing needs. For any needs above that, look for flexibility. So if you suddenly no longer require a staff member you can easily drop that space with no penalty.
Moffett says by spending time making sure you’re all on the same page before the move, your first day will be a breeze.
“Let our crew on the ground know what you need. This could be help from IT with getting your computers set up, or having our events team organise a morning tea to celebrate your new business home.”
Moffett says they work hard to make their spaces business-friendly. “Business becomes more fun, success comes quicker and you’ll be enabled to do more, better.”
“It also takes some of the risk out of growth. If you need more desks, it’s easy. No need to go buy a heap of office infrastructure.”
The shared future
With a global recession looming, cash will be harder to obtain, and there will be some consolidation amongst the companies that lease or manage shared workspaces. That’s the prediction of IWG’s Ferrandon.
“Many landlords will look into [converting to shared spaces] as they realise it’s getting harder to secure long-term leases at a good return. The alternative is to convert to a flexible workspace and enhance the value of their building. – either managing it themselves or turning to companies like us to manage it for them for a higher return.”
Co-working space franchises will also become more prevalent going forward, he says, as the incumbent market players seek to grow faster through partnerships. Franchise partners are attracted by the higher yields and relatively low-risk nature of the outsourced workspace market.
There’s no doubt the shared workspace market is growing fast across New Zealand. Looking at Auckland specifically, John Moffett believes the city is still in catch-up mode with other major cities, but the statistics reveal a rapid incline, with more traditional corporates looking for shared workspace. “It’s the shorter lease term flexibility that they’re drawn to and the ease this brings to cashflow management, especially in uncertain economic times”.
“Technology plays a huge role in the future of business, so we put a heap of effort into enabling even our smallest members have access to the best technologies available,” he says.
“Another good reason to be part of our community is that you’re rubbing shoulders with incredible businesses like Facebook, Amazon Web Services, Google, Getty Images, Salesforce, Spark and many more. Many great technologies are being launched and utilised right in the midst of our communities.”
Although technology will continue to advance, the human interaction factor is still really important for Generator,” says Moffett.
“We won’t get to the point where a robot will greet you at reception.”
When space meets needs
Ben Grant and Josh Kempton have experienced co-working spaces in both Sydney and Auckland, and say the most important factor is ensuring the space meets your functional needs. With customers and suppliers worldwide, the co-founders of eco-packaging company Grounded Packaging say they spend a lot of time on voice and video calls, so readily accessible private spaces and good meeting facilities are vital. “In both cities we started off in spaces that were beautifully designed and worked well for more creative-type businesses, but weren’t the best for us,” says Ben. “You must be clear on what you need.”
He believes the benefits of shared workspaces boil down to a couple of factors:
Access to top-class amenities, meeting rooms, quiet spaces, kitchen, printing, Internet and videoconferencing. “It makes it so easy to just walk into an office space with everything you need already set up and professionally maintained and serviced.”
Mixing with a community of like-minded, interesting people and businesses makes for a much more dynamic environment, and provides strong opportunities for networking and collaboration.
Location, location, diversity
In 2018 start-up business Emergency Q won the inaugural Race for Space competition at the distinctive, purpose-built B:HIVE co-working facility, located at Takapuna’s Smales Farm. The Dragon’s Den-style contest was for a one-year rental and marketing package and was perfectly timed to help the business scale to the next level.
Emergency Q targets New Zealand’s hospital emergency departments with its digital app designed to help reduce crowding and bottlenecks.
Morris Pita, Emergency Q’s founder and CEO explains how their software safely empowers people with non-acute ailments to consider starting their journey in primary care.
In just over two years more than 20 thousand people have chosen to use Emergency Q and been redirected from emergency departments to GPs and urgent care clinics. While it’s still early days in terms of hospital buy-in, the scale-up potential is enormous.
Morris says they had already been scouting around the city looking for the most suitable co-working space – but winning the B:HIVE space was exciting because it’s a place with ‘X-factor’. It has high-impact and lends credibility to the businesses based there.
“First impressions count, and when prospective stakeholders or customers meet you here, you only have to see the look on their faces.”
Primarily a business is as good and agile as its people, Morris believes, so you must find a shared work environment that is easy to recruit talent into.
“The B:HIVE ticks that box – and then some.”
He says the close proximity to the Northern Busway makes attending an Auckland CBD meeting a 15 minute breeze. “People also want to come to us, because they want to experience the B:HIVE for themselves.”
Morris also loves the fact that they’re sharing office space with other high-achievers. “It’s very rich professionally as well as socially. You just can’t put a price on an environment where you’re surrounded by clever and interesting people.
“Here you have both human and professional diversity and richness. It’s an awesome place – and it has a vibe and energy quite different from a standard corporate environment.”
Having such a wide diversity of professions and companies housed under the one roof also means there is almost always a person with the right skills available for you to call on. And it leads to a cross pollination of ideas.
“Over time, your networks – that you would not have otherwise formed had you been staying in your lane – bring you all kinds of opportunities,” explains Morris.
He makes another good point too: with such a diversity of companies, any business experiencing a downwards mood swing at any given time is offset by others going through an upwards mood swing. Overall the mood remains consistently positive. That’s not always the case if you operated from your own building.
Morris says when the time came to renew their contract with B:HIVE after the complimentary 12 months expired, it was a “no brainer” to stay on. “The benefits are simply too big to ignore.”
The appeal of community
For Blue Sky Recruitment’s Kathryn Sandford, choosing to set up base in a shared working space was a no-brainer. “A commercial real estate agent introduced us to Generator in Britomart Place. We did the virtual tour before it opened and liked the concept. We felt that because we are a small recruitment company being in our own office was too isolating, so the idea of Generator really appealed.”
Kathryn says the “engaged” Generator staff encourage members in a positive way to be part of a community. She points to the acknowledgment of birthdays and organising the monthly social calendar as examples. “You could say we’ve been able to outsource our culture and really focus on our business.
“Shared workspace works really well when you get a group of people who enjoy being in a space where they can engage with each other and enjoy each other's company both on a professional and personal level,” she says. “This sense of community brings people together and makes work far more enjoyable.
NZBusiness, Magazine Issue: NZBusiness November 2019