Every industry faced significant changes in job availability, work models, demand, and more. Now that the dust is starting to settle, people are becoming accustomed to a new normal that involves greater flexibility and less rigidity common in the pre-COVID, 9-5 office work model.
Companies are now hiring across the state and country lines to make up for labor shortages or to simply infuse new perspectives in their organizations. And, local employees are adopting flex work models wherein they work from home either completely or occasionally.
The reality is, businesses don’t need the same office space that they needed for the last few decades. Times are changing, and with it, budgets, processes, and strategies should change as well.
So are you wondering, “how much office space do I need in this new era wherein remote and distributed teams are becoming the norm?”
Here we’ll cover the common challenges businesses faced post-COVID, why the long-term office lease isn’t the answer, as well as the benefits of short-term office coworking rentals.
How Much Office Space Do I Need (and Want to Pay for)?
COVID threw a wrench in a lot of business plans, forcing business owners to ask themselves how much office space do they really need? Businesses are finding their footing again, but it’s far from easy.
Many employers struggle to maintain company culture under the new model with distributed teams, while others haven’t established an updated, consistent way of operation. Here are some of the challenges stemming from the new normal in the post-pandemic world that businesses are facing:
- COVID Safety Protocols
- The Great Resignation
- Fast Demand for Flexible Work
Let’s take a deeper look at what these business challenges look like.
COVID Safety Protocols
Companies returning to the office must follow the COVID safety guidelines from their respective states. For example, many states adopted state-wide mask mandates, while others adopted a vaccine passport system.
Employers also had to make their employees feel comfortable enough to come back to work amidst the labor shortages (which we’ll get to later).
Social distancing was one safety protocol that businesses and companies using offices had to adopt. This posed some issues with layout and scheduling as it wasn’t possible for entire teams to be present simultaneously in the shared office spaces. Paired with mask mandates and, in some cases, mandatory vaccinations, COVID safety protocols cost businesses extra time and money.
If COVID-19 protocols weren’t enough of a challenge, businesses also have to deal with a large influx of resigning employees.
The Great Resignation
The Great Resignation refers to a mass of resignations across the country. Just in July 2021, 4 million Americans quit their jobs. The healthcare, hospitality, and tech industries saw the most of these resignations, as did mid-career employees between the age of 30 and 45.
Reasons vary by individual, but some common themes amongst people’s motivations to quit included pent-up frustration with increased workloads and burnout, as well as leverage in the form of more job openings for mid-career candidates. Experts also assert that the Great Resignation includes people that wanted to quit a year earlier but delayed their decision due to the uncertainty of the pandemic. COVID encouraged many to reprioritize their wants and needs for their personal and work life.
How much office space do I need? First, worry about retaining your existing employees! Businesses were often left with job vacancies that they couldn’t fill, forcing them to either lose money or put extra pressure on existing employees to pick up the slack. To retain employees, businesses are forced to appeal to their employees with better benefits and compensation, or flexible work arrangements – which brings us to our next challenge.
Employee Preference for Flexible Work Arrangements
After over a year of working from home, many people are reluctant to return to the office every day. How can we blame them when they save money and time in commuting and feel just as productive at home as they do at work? Many states also experienced an overlap of businesses returning to the offices while schools were closed. Where did that leave parents that still had children studying remotely?
Remember those 4 million Americans that quit in July 2021? About a third of them cited a desire for more flexible work arrangements as a reason for quitting. Flex work includes flexible scheduling, unlimited time off, or remote work.
A whopping 80% of workers asserted that more flexible work options would make them loyal to their employers. And the desire for flexibility is so great that 25 percent of workers would accept a 10-20 percent pay cut in exchange for flexible work arrangements.
The argument for flex work is compelling: studies show employees are more engaged, loyal, and productive with flexible work arrangements. Companies have a better chance at retaining and attracting talent if they offer flex work. An added bonus? Happy, engaged employees will loudly share their positive experiences with their employers to their networks, acting as free marketing for your brand.
Big Offices Are Waning
After a year of remote work, some companies jumped the gun on signing long office leases in the hopes of returning to in-person work. Many didn’t expect the resistance that came from millions of workers who demanded more flexible work.
How much office space do I need? These days, not a lot. If you’re thinking about signing a long-term office lease for your business, we urge you to reconsider. With the current business challenges stemming from the aftermath of the COVID pandemic, a long-term lease just doesn’t fit into the future of work.
Why a Long-Term Lease Isn’t the Answer
Office building management companies charge a pretty penny for office rentals. And, many of them insist on long-term contracts pinning businesses down for exorbitant rent for months or years at a time.
If the shift is toward a work-from-home or hybrid model, why pay for a regular office space for the long term? The average rent for office space in Austin cost businesses an average of $42 per square ft in 2020, making the average 500-sq-ft office $2,100 per month. The average 1000-sq-ft office? $4,200 per month. That’s a lot of money to fork out every month if your business shifts and you no longer need the space.
Software company SoundCommerce compares the cost of their old office to the salary of two new employees. Executive Best cites increased engineering capacity as a greater asset than office space, which is why they chose not to renew their lease. Other companies are following suit, either allowing their lease agreements to expire or subletting their space until the lease does expire.
Even if your team meets once a week or wants to have a dedicated space for a month or so for a big project, why sign and pay for a long-term lease? There are plenty of short-term office space rentals that can accommodate unique needs for any business in layout, capacity, amenities, and more. The savings you can experience from staying away from a long-term lease can be used on more profit-generating expenses. Some companies plan to use office rental funds on technology instead to enhance remote work operations or hire more employees.
Why else isn’t a long-term lease the answer? Because long contracts don’t offer enough flexibility to match the instability of the current times. During times of economic instability, the real estate market could fluctuate significantly.
Let’s say a business signs a lease for $1,000 a month for three years. Even if the market crashes and rent drops significantly for other spaces, that business is still stuck paying that high price even though the space isn’t worth that amount anymore. Moreover, unstable times might call for a business to downsize or expand their operation, which a long lease can’t accommodate.
So, the question remains: how much office space do I need? You need just enough office space for what your work situation looks like right here and right now. Short-term and flexible office arrangements are the way to move forward.
Benefits of Short-Term Coworking Spaces and Private Offices
Short-term office rentals let you rent out the office space you need, even if that need changes over time. Flexibility is king in today’s work setting, and short-term office rentals offer you the whole kingdom. Here are some tangible benefits of short-term coworking spaces and private offices:
1. Cost Savings
Short-term offices don’t lock you into the long, drawn-out contracts most traditional office management companies require. Even if the monthly cost is slightly higher, the flexibility to end it faster saves you money in the end.
How much office space do I need? You might mean to ask, how flexible should my office space be instead! Flexibility is vital for businesses in this day and age. Short-term rentals offer flexibility to help your business downsize or expand, depending on their needs. Your short-term office space can evolve with your needs without locking you into any particular price, length of time, or dynamic.
3. Low Maintenance
Traditional property management companies for office buildings don’t take care of watering your office plants, making sure your internet is reliable, or ensuring your fridge is stocked with snacks. Stroll into your coworking session stress-free, knowing that you don’t have to spend much time maintaining a short-term coworking space.
Now, let’s take a look at what you should be looking for when deciding on a coworking venue.
What to Look for in Coworking Venues
Not all coworking venues are built the same – some are better than others, even if they all offer short-term rentals. Here are some things to look out for when browsing top work spaces in Austin:
1. Included Internet
Internet access is often included in short-term office rentals. Check out reviews to make sure the connection is reliable. Spotty connections can impede productivity and make you look bad on Zoom client calls.
2. Modern and Updated Décor
Why pay for your average living room furniture? Look for a space that has a modern, fresh feel to keep your employees engaged and enthusiastic every time they visit for a coworking session. And, impress clients over video calls with a space that channels chicness and professionalism.
3. Flexible Contracts
This is arguably the most important thing to look for in short-term rentals. Is the contract open to changing your work schedule days per week? Could it permit additional rooms or desks if needed? Even better: could you get out of your short-term rental for a reasonable fee? Top coworking spaces are offering clients more and more flexibility in their contracts, so make sure you find one of them for your short-term office rental.
4. Outdoor Space
Let your employees unwind with a breath of fresh air in a nice, dedicated outdoor space. Many short-term rentals have little backyards with trees, seating, and a mix of shaded and sunlit areas for you to enjoy your lunch break.
How Much Office Space Do I Need in Austin, TX?
When you assess the state of today’s work model, the critical question isn’t really “how much office space do I need;” instead, it’s “how much flexibility do I need in my office rental arrangements?”
The answer is a lot of flexibility. Your business needs to be able to breathe through the ups and downs that came with COVID, and that might come from other events as well.
Contact Vuka today to learn more about how you can save on costs and improve productivity with a short-term coworking space.