Over the last two years many workers have had a drastically less-expensive commute, or no commute, with many completely or largely cutting commuting costs from their monthly budget. This experience of having to spend less to get to work and earn a living has forever changed how employees view their overall compensation and work-life balance. Future employment negotiations will undoubtedly include office-commute requirements into the overall compensation package considerations directly alongside medical benefits and salary.
Inflation and the Economy
With any economic uncertainty or scare of inflation, workers and companies have become much more cognizant of every dollar spent. For companies, many are ditching their large offices to save on gargantuan capital, leasing and overhead expenses. In fact, even large corporations are starting to get into coworking. Some tech giants—such as Microsoft, IBM and Verizon—are testing the use of coworking spaces for employees so they can be close to and easily interact with innovative startups.
For employees, many are now reluctant to agree to return to an office full-time and incurring the additional costs that go along with that daily commute, although a local coworking space might make much more sense for them. In addition, with costs going up employees may be more inclined to seek higher earning potential elsewhere, which may be one of the determining factors leading to the “mass resignation” we are currently experiencing in the U.S. At a time when the less (money) you have going out and the more you have coming in is at the top of every individual’s mind, then yes, every dollar counts. Saving on toll fees, vehicle maintenance, and even lowering the gas-station bill by just a slight margin can make or break many family budgets nationwide. There are also some tax savings or benefits to operating a home-based business or working from home that can help curb some of the increased housing costs.
Taking a New Look at Product Portfolios and Customer Interactions
Fewer people are commuting to cities, spending cash on train tickets, buses, taxis, parking, and lunches, which has an impact on the financials of city/state/county transport operations, food trucks, lunch shops, and other retail businesses. Less customers undoubtedly leads to less revenue and has definitely impacted a variety of business operations. However, a positive side effect of this has provided these same entities the opportunity to take another look at how they support and interact with their customers.
Becoming more fiscally responsible and offering a more diverse product portfolio is something I would argue was long overdue for a lot of businesses.
How Does Remote Work Benefit the Economy?
There are more than 500,000 new businesses being created every month in America. Most new businesses don’t know where they are going to be in a year, let alone five to 10 years, so I just don’t see many going back to signing long-term leases. Coworking spaces, like Venture X, give companies the much-needed workplace flexibility and agility to spend their financial resources toward where it is most needed: growing their business.
I think one of the largest benefits was shifting some of the power back to employees who have more flexibility than ever before in regard to where and how they want to work. Workplace and employment flexibility leads to happier employees which in turn, tend to drive more creative innovation.
In addition, businesses are no longer geographically tethered to their employee base. Imagine the positive impact on your favorite brand’s products and services as they begin focusing on hiring the best talent anywhere in the world, not just those within close proximity to their corporate headquarters.
Remote Workers Focused on Value of Time, Flexibility for Work-Life Balance
Independent contractors and gig-based workers often quantify the value of their services on an hourly basis. This creates a mindset focused on optimizing time management. Taking an hour out of their commute can lead to an extra hour of paid work daily, increasing their earning potential over extended periods of time.
Working parents know firsthand how expensive childcare costs can be and, so, savings in this area alone have encouraged a lot of parents to push for more home-based or hybrid working arrangements. With all the expense-saving benefits of not having to commute long distances to an office every day, workers have “seen the light” as to how those incremental gas bills, toll fees, designer lattes, and daily lunch outings are eating away at their monthly budgets.
I believe that employees are going to weigh workplace flexibility more strongly into their overall compensation packages for new employment opportunities.
oworking—A New Generation of Community-Based Workspaces Emerge
Traditional coworking space site selection has historically leaned more heavily on central business district (CBD or “downtown”) office markets. Yet a partial shift over the past two years is driving more demand in suburban markets because employees have a stronger desire to work near home with a 15-minute or less daily commute. This consumer demand shift has led to recent explosion in suburban and community-based coworking operations that shows no sign of slowing down anytime soon.
The commercial real estate industry in general has lagged behind others in regard to innovation. In fact, the last two years have forever changed the way we view and consume commercial office real estate. Coworking spaces are a disrupter to the trillion-dollar office real estate industry and landlords are going to have to quickly adapt to changes in demand or they will continue to see their tenant vacancies increase.
Some are adapting, converting unused office space into coworking facilities. Commercial landlords are beginning to realize that service- and amenity-infused flexible term office spaces, such as Venture X, are here to stay. In fact, converting office building units to coworking spaces may well be the next big investment opportunity in commercial real estate.