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Martin Hinge, Managing Director, Project & Development Services, JLL Asia Pacific, speaks to Korea's Economic Review about why coworking isn't just for trendy tech firms.
As the real estate market evolves and demand from companies and individuals is increasing for varied and tailored spaces, JLL's Martin Hinge describes the need for businesses and landlords to provide flexible work settings and places that support core business activities and creative ideas which contribute to the bottom line.
"Activity based working" is a real estate industry term which refers to arranging an office space based on activities or business settings rather than on departments – this adds to office space efficiency and negates the need to allocate the workforce to fixed desks. There are actual cases where, through "activity based working", organisations have experienced reductions in cost and space, while increa sing employee productivity," says Hinge.
"Many people focus on cost reduction; however, it may be more beneficial to record increase in productivity," says Hinge, "both can have a positive impact on the bottom line."
A financial firm in Australia achieved a positive outcome through changing to "activity based working". Typically, in the finance sector, subject matter experts work together to create new financial products for clients; significant time and energy is spent sourcing information from different parts of the business. JLL recommended a workspace that would allow for quick shifts between individual and group activities and a workplace that would better support high value activities. Even simple changes, such as bringing flexible meeting spaces closer to the desk areas, resulted in considerable improvement in collaborative performance – manager review processes were reduced by 30%, and the time taken to source internal product information was reduced by 85%.
Beyond "activity based working", Hinge highlights coworking as the next global work trend. He sees the formation of the coworking environment as part of office evolution and that "the concept of coworking, a trend led initially by entrepreneurs and startup firms, is relevant for any organisation - even traditional ones such as ship manufacturing – it works in any workplace where new ideas need to be brought to life."
JLL's Head of Consulting and workplace expert, Grant Morrison, wrote recently of four core models which can be applied by organisations seeking to maximise the benefits of coworking.
The "internal collaboration" model provides internal coworking spaces for employees, while the "coworking membership" provides external coworking memberships for employees – a quicker, cheaper, simpler model to deploy tasks.
"External coworking" spaces provide collaboration space for employees shared with external organisations or individuals in an external environment, which expands the opportunities for external collaboration and is Morrison's recommended option for maximising value. The fourth option is an "internal coworking" space, preferred by most corporations which offers an internal secure space, open to external organisations but has risks around confidentiality and cultural differences.
Hinge highlights the need for tailoring the coworking environment to satisfy organisations' functions and business outcomes but agrees with Morrison that the third model, "the external coworking space", provides the greatest value for companies looking to drive business growth.
So why has the coworking culture become so popular? IT firms such as Google and IBM acknowledge coworking environments as contributing factors in the growth of their organisations. "With advancements in internet technology and increasingly horizontal corporate cultures, collaborative coworking spaces are driving innovation. Organisations are further developing the coworking environment to attract and engage highly-skilled post-millennial employees," says Hinge.
"There are obvious benefits for landlords as well – by operating a designated portion of the office as a coworking space, landlords are able to provide flexibility for their existing and future tenants as well as increasing their awareness of how the building is used, hence, enabling them to respond to the ever-changing needs of their tenants".
"The business environment is fast-paced and always changing. Years ago, a start-up might have taken three years to establish and succeed, now it can achieve the same outcome in a few months. As a result, many organisations are requesting flexibility from their landlords – they want to be able to rent their space on a monthly or even a weekly basis."
Coworking can also provide opportunities for innovation and increased employee productivity. A recent survey published by JLL Singapore revealed that although employees reported that their typical work day mostly comprised emails, phone calls and meetings, greater benefits were derived from coworking spaces. Employees reported that shared workspaces assisted them to access and share information and market trends with their colleagues, and they experienced a reduction in the time it takes to solve problems.
Operators in the property market are focusing significant investment in the co-working concept. For example, Great Eagle Holdings opened a space in NeueHouse, New York attracting a young, hip clientele. WeWork, another company exploiting the shared-office model, opened its first branch in Korea last month. "Korea is one of the world's fastest advancing countries. With the high distribution rate of Wi-Fi, Korea is well-positioned to provide a virtual workplace anywhere in the country," Hinge says. "I think if WeWork can build its brand in the market by utilising the shared space concept – where technology and ideas can be shared and synergies achieved – it will be successful."
This article has been adapted from the original published in Korea's Economic Review.