By Conal O’Hara, Chief Operating Officer at London Executive Offices (LEO)
A recent report predicted a 50% growth in the flexible workspace market by 2022 across the EMEA. Aside from the investment and finance opportunities in an internationally burgeoning market, how can financial services firms maximise flexible office space?
Flexibility is driving change across businesses of all shapes, sizes and sectors – with both young start-ups and more established, traditional financial firms set to reap the benefits. A fixed ‘nine to five’day at an uninspiring desk is becoming a thing of the past. However, workplace flexibility runs much deeper than this: it is about meeting increasing employee demands for ownership of their working day, alongside providing a business with the freedom to be able to react and adapt to change. In light of Brexit, wider macro-economic uncertainty and new challenger entrants, coupled with the intensifying ‘war for talent’, this two-pronged flexibility will prove crucial for even the most traditional firms.
The financial services sector faces uncertain yet exciting territory ahead. Firms of all sizes need to have the tools to adapt, expand or contract swiftly – within days rather than months. The straight-jacket of a five- or ten-year conventional lease clearly restricts the ability to respond to uncertain political events and navigate through the ever-changing global economy. A flexible solution, with a term of 12-36 months and the ability increase or reduce the amount of space occupied during the period, offers freedom to respond quickly to market conditions and gain the edge over a challenger or competitor. The benefits of this flexibility cannot be underestimated.
In addition, the services available from a flexible workspace operator provide a business with the headspace it needs to think and react to change. With turn-key flexible office solutions, companies can focus on their core business. A complete out-sourced function can be activated via an experienced operator, with an entire infrastructure available at the click of a switch. Technology supported by resilient bandwidth with enough capacity for the demands of the financial sector, including specific features such as call-recording and video-conferencing, are available at the touch of a button, without the need for third-parties and multiple support contracts.
Behind the space is the service. Trained customer service teams should not be added extras but commonplace expectations – consider IT support, in-house maintenance and on-tap concierge services to assist workforces throughout the day. Not only does this support senior management teams, but also helps to promote employee wellness and engagement across a structure. Hotel-like service will increasingly be brought into the workplace and should be embraced to help institutions perform, grow and succeed.
War for talent
‘The war for talent’ is a phrase increasingly heard across many businesses. For financial services, new brands in the market and increasing innovation mean that competition for the best graduates and senior leaders is fierce. With recent research by recruitment company Totaljobs finding that 84% of employees are calling for more flexible working arrangements, and that 75% of employers claim flexible working boosts retention rates, it is clearly a key weapon in a business’s armoury.
Whilst financial rewards will always be a primary driver for a workforce, employee experience is increasingly important. Interesting spaces, a sense of individuality, ownership of the working day and the ability to work in a productive, inspirational environment are front-of-mind issues for much of the UK’s rising talent. As such, even the most traditional institutions are having to adapt to new professional expectations and one way to succeed is with innovative workplaces. Breakout areas, hot-desking for productive working, and various collaborative spaces, including top-spec meeting rooms, create an enjoyable and enviable working environment.
In London, addresses mean business. Many financial services firms need to be in a specific location for its amenities, but also for the value it can add to their business and its brand. Think hedge funds and Mayfair, insurance and EC3 and banking firms around Gresham Street and Bank station. Premises in these addresses may have been out of reach to some firms on a conventional office lease basis, but through a premium operator, firms of every size can benefit from the value added to their business from sought-after locations. Proximity to clients and other sector-specific businesses assist in creating a competitive edge and add credibility.
Additionally, discreet unbranded providers allow a firm to develop its own identity, whilst maximising the value of the quality address. For example, meetings can be held in premium conference rooms that align with a firm’s professional image, but that remain personal to them. What’s more, meetings do not have to be confined to a boardroom anymore. Businesses who work with flexible providers have scope to tailor the location to the client – enjoying informal meetings in impressive lounges, spectacular terraces or quiet Mayfair gardens.
The same applies to employees, who can enjoy all the benefits of a premium location with concierge-style service and features – all provided on tap by an operator.
Finally, for those that require the facilities and value of a premier postcode but are focused on the need to potentially add headcount, some providers are offering cluster portfolios. With buildings positioned together in core areas, it allows quick expansion to another building, even on the same road if needed, minimising disruption and maintaining the benefits of the area’s amenities and commuter connections during the process. Financial regulation may also require teams to be based separately and so, to keep satellite offices in close proximity but compliant with regulation, cluster portfolios can be particularly effective.
Offices in uncertainty
Brexit and wider global political and macro-economic uncertainty are key factors when considering short and medium-term growth plans. With this in mind, firms should not over-commit to space. By occupying a flexible office within a provider’s building, firms can be clever with their use of space; take a sensible sized permanent office but maximise the building’s meeting rooms, business lounges and breakout areas. Office providers who own their real estate are also sought-after in uncertain times. Firms can have faith in the business continuity of their supplier given the backing of a physical property. Experienced operators who have supported businesses through periods of turbulence, such as the financial crises of 2008/09, should also be considered. Finally, on the financial front, new accounting regulations require lease liabilities to be reported and so adopting a shorter-term licence may be an efficient way of limiting impact on the balance sheet, and not disrupting banking covenants or increasing risk.Managing costs will be a key focus for many and London’s flexible office market is well-equipped to support firms in achieving their targets.
Rethinking the way in which we work should permeate all sectors and markets. Flexible solutions for both a business and its employees will become increasingly commonplace, including within traditional financial services firms, and, as such, flexibility will no longer be perceived as a temporary solution. Offering flexible and innovative workplaces will prove crucial in the war for talent, in streamlining costs by leveraging services and addresses, and in remaining agile during times of uncertainty. With various forces shaping the current climate, clever thinking is needed to ensure competitiveness and ultimately success. Starting from the ground up and considering the four walls around you may hold the key to success for financiers in years to come.