The significant changes to our working environment that occurred over the past two years, driven by a top priority for health and safety, have received a lot of attention.
While there has been much speculation about how work and offices will develop in the coming year, there has also been plenty of proof that decentralized offices or flexible workspaces have replaced huge office buildings. The transition to a "hybrid workplace" is no longer a trendy term and will continue to affect our daily lives. With the same motto of creating a large workspace, IWG has emerged as the largest global workspace provider redefining the way they work through its diverse portfolio of flexible workspace solutions and helping a wide range of businesses adopt a hybrid model of working.
With growth plans shifting to top gear, IWG is expanding its network to provide flexible office spaces to its clients in tier II, III cities and simultaneously presenting high-yield investment opportunities to potential partners through its successful franchise model. Mr. Harsh Lambah, Country Manager- India, Vice President Sales - South Asia, IWG plc shares insights about IWG’s innovative workspace solutions and how it is creating a win-win ecosystem for clients, partners, and itself.
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- What trends have you been witnessing in terms of demand in the co-working sector post-pandemic?
Ans: We are witnessing unprecedented demand for flexible workspaces, suitable for a combination of office and remote work. Hybrid working has now become the new work paradigm and organisations of all sizes increasingly appreciate the benefits of the hybrid work model – whether it is the reduced commute for workers; the ability to work from multiple workspaces and home or the improved work-life balance. In India, there is a steady rise in demand for our workspaces, especially in tier 2 and tier 3 cities from small-medium businesses and large enterprises. They have shown a high propensity to adopt a hub-and-spoke model of working, which in turn is helping them deconcentrate their workspaces from a single HQ or location into smaller, well-networked workspaces across the city. We currently have 91 workspaces operational across 16 cities of India and there has been a significant increase in demand and occupancy at our tier-2 centers. We continue to see significant untapped potential in tier-2 and non-metro markets, which will drive a lot of business for the co-working sector. The situation is no different globally where we have created significant momentum in global membership deals, partnered with large enterprise clients such as NTT, Standard Chartered (95,000 employees), Cisco, Staples and count 83 percent of Fortune 500 firms among our global customer base.
- What is your opinion on the future of the co-working sector?
Ans: The flexible workspace sector has emerged as a vibrant sector and due to increasing demand for the hybrid work model in a post-pandemic environment, we plan to add more than 1,000 new locations globally in 2022, with particular focus on suburban areas. Working through a global pandemic has proved to businesses that remote working functions effectively, regardless of it being an international conglomerate or a sole-trading freelancer. The fact is, and this is corroborated by market research and trends, that most employees want to work across a combination of locations including home, a local office and sometimes from the regional headquarters.
Flexible workspaces provide an improved work-life balance for employees by cutting down on long commutes and at the other end, also save businesses money. Contracts and agreements are also not tied to rigid leases. Research shows that employees working in a hybrid manner save an average of US$11,000 per year. Around the world, we are also seeing large corporations trying to deconcentrate their workforce,and getting closer to the communities in which they live, thereby giving employees better work-life balance without compromising on their productivity. This is giving increased prominence to the hub-and-spoke model of working, which is beautifully supported by flexible and co-working spaces. At IWG, we have over a dozen brands to cater to this increasing demand– each with a different style and USP to meet every hybrid working need. We are continuously expanding our network and are actively seeking out more property owners to partner with, to open locations in the heart of suburbs, closer to where people actually live.
- What are the factors that have boosted the segment’s growth?
Ans: The pandemic has proven the ability of global workforces to work effectively in different ways and in different places. Businesses small to big have realized that hybrid working is better in numerous ways, notably for those in the organisation, planet, and the bottom line and are proactively looking to change their work environment making it more flexible and resilient. Working professionals have shown in repeated surveys that they prefer flexibility in their work life. IWG's recent study that found 77% of employees said a workplace nearer to home is a must-have for their next career move. Likewise, the pandemic has prompted business leaders to consider the long-term benefits of the hybrid working model. For companies making the leap to hybrid, brokers can play an invaluable role in helping them to navigate the new world of work. According to IWG research, a majority of FTSE 250 companies are now looking to adopt the hybrid approach as they no longer have to accommodate all employees at the same time, meaning they can downsize their real estate footprint, reducing their overheads from rent and other associated costs.
Companies are taking note, realizing that this also helps them meet their ESG commitments. What we are seeing is a rise in demand within the smaller, regional markets, with the highest demand growth of all being within tertiary markets. Since the pandemic, suburban office spaces started winning out at the expense of flashy city centers. That is partly down to the growing adoption of the hub-and-spoke model, whereby companies have a smaller corporate office and multiple satellite offices that are geographically distributed.
- Which are the cities in India where IWG has its presence?
Ans: In India, our network is spread across 16 cities through 91 workspaces, and we are bullish about our growth plans. Through a successful franchise and partnership model that we have put in place, we are focusing on expanding our network across tier 2 and 3 cities in India with a demonstrable return on capital and strong growth prospects. One of our largest franchise deals, signed recently was with Conjoinix, a leading real estate, leasing, and co-working company. The 18-center partnership will expand our presence further in Delhi-NCR, Haryana, Uttar Pradesh, J&K, and Gujarat, and marks this as one of the largest deals by an individual franchisee in the brand’s history.
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