Co-working to pro-working: Striking the right balance between substance and style
Around 90% of Morgan Stanley’s 60,000 employees were working from home during the COVID-19 pandemic. “Lesson learned,” says the investment bank’s CEO James Gorman. “We’ve proven we can operate with effectively no office footprint”.(1)
Gorman’s sentiment is echoed by several other organizations: Twitter and Slack made headlines recently after announcing permanent work-from-home policies. Facebook expects half of its workforce to operate remotely in the next five to ten years. It seems as though organizations’ long-standing skepticism over the feasibility of remote working is finally abating. Nearly three months of unplanned, out-and-out experimentation with remote working has resulted in evidence-based research to support the trend, in the post-COVID world. According to a reliable report by Global Workplace Analytics, 68% of respondents are successfully working from home, while 70% managers are reporting performance satisfaction, globally(2).
These findings have broad implications, especially for an ailing asset class like CRE, whose dwindling demand could be further aggravated by possible client churn. The negative impact is more pronounced in the sub-markets such as co-working spaces. Social-distancing guidelines and the risks associated with high-density, multi-organizational shared workspaces have discouraged existing customers, let alone prospective ones.
But there is a catch: The same report from Global Workplace Analytics reveals that 23% respondents think their productivity has dropped after working from home. Top-level executives understand that productivity cannot be compromised during economic uncertainties. On the contrary, recession-driven business challenges necessitate special efforts from employees. Since social cohesion and collegial atmosphere at workplaces have well-established correlation with productivity levels, organizations are not quite done with offices yet. This conundrum finds a viable solution in pro-working, which, to put it bluntly, is the less famous, but more mature cousin of co-working.
What is pro-working?
By definition, pro-working is nothing but co-working with added layers of professionalism and sophistication, including privacy and security. It aims to bridge the gaps between traditional offices and co-working spaces, offering an optimal environment for serious business professionals. Within the context of the pandemic-induced “new normal”, pro-working offices offer fewer communal spaces. The result is better privacy and decorum, akin to traditional offices. At the same time, on-demand services, without lengthy procurement processes, hefty down payments and long-term lease agreements, continue to be on offer.
Fewer community-wide activities and lower footfall could entice larger organizations, who are scaling remote capabilities but also wish to avail part-time professional offices. Pro-working models often have dedicated on-site staff and concierge services, akin to a 5-star hotel, reflecting the polished image that large organizations aim to portray.
Since productivity is currently the major talking point, even small businesses, who cannot afford the distractions of traditional co-working spaces, could be incentivized to embrace pro-working spaces. In fact, many small businesses have completely pivoted to remote working during the lockdown, renouncing their private offices and co-working spaces. Some of them might re-enter the market, seeking a productive office setting for part-time use. For such companies, pro-working offers as a value-added upgrade. So, what happens to the vacant commercial offices and co-working spaces?
Adapting to the new normal
During uncertain economic cycles, flexibility is highly desirable. This is offered by both pro-working and co-working models, except the latter does not align with the new normal. There is a renewed focus on productivity, privacy and professionalism in the post-COVID world. Therefore, it is an opportune time to repurpose traditional office and co-working spaces.
In one such case study, Brockton Capital, a leading CRE investor, partnered with Prophet, a digital consultancy, to differentiate its offerings in a crowded market. They adopted a “members-club approach” to design a pro-working office set-up. The idea was to supplement their offering with premium hotel-style hospitality, destination restaurant, lobby bar, yoga studios and tech-enabled boardrooms. The project is now championing the premium, professional office experience across London.
Such an undertaking is also actionable in CRE markets like Dubai, which boast a strong appetite for premium developments. Dubai’s favourable regulatory framework and innovation-driven construction practices are positives as well, in this context. In fact, a recent initiative in Dubai has strong parallels with pro-working. The Dubai Land Department (DLD) recently ratified fractional ownership of holiday homes in Dubai, thereby democratizing premium hospitality and homeownership. Likewise, pro-working aims to democratize the premium office segment – modeled around hospitality services, along with key benefits of the sharing economy.
In essence, pro-working is an attempt to fix the skewed dynamic between style and substance, which ails many co-working arrangements. With post COVID requirements exerting an influence of their own, this is an innovation that manages to tick most, if not all, boxes.