Risk managers have a new weapon in their arsenals – real estate. The use of property strategy as a tool for risk management is a relatively new trend, writes Joe Sullivan, but it’s one that’s expected to see significant growth as more businesses understand the new workspace strategies being made available to them.
We’re entering a workspace revolution powered by digitisation and increased connectivity. IWG, the parent business of workspace companies such as Regus and Spaces, recently surveyed over 18,000 business leaders from around the world to determine the largest insight yet on how far down the road to the flexible workspace revolution we really are. The results are astonishing. 89% of those who took part in the survey said that flexible working helps business leaders to grow their business. 87% stated that flexible working allows companies to stay competitive, while 89% asserted that such working permits business leaders to optimise costs.
Perhaps most interestingly for risk managers, almost three-quarters (73%) of respondents observed that flexible working assists them when it comes to mitigating risk. How? Perhaps some of the other results may provide some insight. For instance, 91% of respondents suggested that flexible workspaces enable employees in their company to be more productive while on the move. 80% stated that enabling their company’s employees to work from anywhere helped them to both recruit and retain top talent.
In addition, 78% explained that an increasing proportion of companies are choosing flexible office space to respond to employee demand for drop-in locations, while 72% of respondents asserted that providing access to a huge network of flexible workspaces helps them to attract more talent.
This revolution means that businesses are increasingly studying how flexible working could help them to grow as an organisation. As part of that, those same businesses are discovering precisely how it can help them to manage different types of risk.
Managing different types of risk
First, let’s consider financial risk. It’s estimated that, by 2030, 30% of corporate real estate will be flexible in nature. Why are companies using flexible workspace? One big reason is cost. Companies can save significant costs on real estate that they outsource, sometimes as much as 50% or more, in fact. Clearly, reducing long leases, capital expenditure and overall costs provides a financial boost that helps financial risk.
The incoming International Financial Reporting Standard 16 – which is designed to put leased assets on to a business’ balance sheet – will, we believe, be a trigger for more businesses to recognise this and look to benefit from the broader advantages of flexible workspaces.
Second – and very much linked to this – is strategic risk. Global businesses need to expand and move into new territories. They do this to be closer to their customers, employees and suppliers. To do this successfully, though, often demands a good deal of commitment, and in the real world it can be challenging to understand what level of commitment is required. Do you want to sign a long lease on an office space only to discover that the opportunity didn’t materialise, and then find yourself tied to that office, with the attendant overheads it requires, while you identify a fresh opportunity in another market?
Again, a flexible workspace strategy negates this risk. A truly global partner can provide you with what you require, when and where you require it.
Agility to seize opportunities
Flexible working isn’t simply about personal employee productivity (although this is a key advantage). It’s also about ensuring that businesses of all sizes have the agility to seize an opportunity. Complementing this, the survey results showed that 82% of respondents believe flexible working allows businesses to create a presence in new markets.
Third, look at HR and talent retention. In a connected and extremely competitive world, business success can be determined by talent. It’s clear that the expectations and demands of employees are changing, so too the demands of top talent are altering. A study conducted last September by Timewise found that 87% of workers would like the option to work flexibly. By that, they don’t mean working from home one day each week. Rather, they mean the chance to work on the move, explore new offices and fit their work commitments around their life commitments. If you can deliver that as a business, your appeal as an employer will rocket.
A flexible workspace strategy offers talented staff a package that they know will enable them to be at their most productive, without compromising their work-life balance unnecessarily. It also assists a business to retain that talent and, importantly, at all levels of the company. This is a key factor in ensuring that ambitious, global businesses retain one of their most important differentiators: their people.
Finally, flexible workspace strategies can afford risk managers peace of mind that they have a plan in place for those unforeseen events that can play havoc with business continuity from a physical and digital perspective. Having a flexible workspace provider as your recovery partner means that you’re not tied down to any one location and can adopt a location recovery strategy at any time.
Best of all, perhaps, you can test the business when and where you want to because workspace providers like nothing better than showing people their great workspaces. This also has benefits in terms of network security. If your network is compromised, you can use a workspace supplier’s network instead. A properly networked flexible workspace partner can deliver on this.
The workspace revolution
The workspace revolution has transformed how individuals view office life. Now, business leaders are recognising the specific strategic and financial benefits that it will bring to organisations of all sizes. Central to that is how it will help them mitigate threats and seize opportunities.
That’s why the smartest risk managers are now paying very close attention to their business’ property portfolios.
Joe Sullivan is Managing Director of Regus Workplace Recovery