.png)
In case you missed our bite-size webinar we’ve put together the key talking points and takeaways shared by Desana CEO & Co-Founder Michael Cockburn, and Rob Sadow, CEO & CO-Founder at Scoop and Creator of the renowned Flex Index.
Over 30 minutes they tackled the biggest challenges for enterprise businesses when adopting flex - and the market solutions emerging to successfully tackle these. You can also watch the webinar in full here:
.png)
Rob started off the session by mapping out the dominant trends they’re seeing at Flex Index, especially when it comes to the adoption of flex within larger global businesses. Flex Index has data on the specific approaches to hybrid and flexible work of more than 8,000 companies, with over 60,000 offices and employing more than 100 million people globally, making it the largest data set in existence on workspace strategies.
When they first started looking at this data in February 2023, it showed an even 50/50 split between companies that offered some level of work location flexibility, such as hybrid or remote work, and companies that required full time in office. That's now moved in favour of flex, with 65% of companies offering work location flexibility compared to 35% of companies requiring full-time in office - about a 14 point move over that period.
Going deeper, the way that that's manifesting looks a little bit different for big companies versus small companies, as explained by Rob:
“Larger companies - enterprise scale or even upper mid market with 500+ or 100+ - are overwhelmingly leaning into what we describe as structured hybrid models, which means that they set some expectation on a weekly or monthly basis on how much time is spent in the office. This could be setting a minimum 2 or 3 days in the office, or attendance on specific days like Tuesday or Thursday. It's not full time, but there's a specific guardrail from the company on attendance, and this is much more common in larger companies.”
As has been the trend for some time, small companies with less than 500 employees tend to be oriented toward ‘full flexibility’, meaning they're either fully remote and don't have offices or offer employees free choice, with no requirement to go into owned offices.
The data also shows a lot of difference geographically, including within cities where a different industry mix or even local politics can influence the prevalence of flexible work in certain areas. Certain sectors such as tech, finance, professional services and media, also tend to lean more into flexible work, whereas industries that are traditionally more foot traffic dependent, like retail or hospitality, require more full time in office work.
A key challenge Michael raised as one that often emerges for enterprise businesses is whether to enforce workplace policy. Not only is there often a difference between the announced policy and then the behavior that comes out the other side, but we’re also seeing very different levels of enforcement going on.
There are some companies that beat their chest very hard on enforcing policy, and make it clear they want people in the office 3 or even 5 days a week. Some even tie it to performance measures or promotion opportunities. However, issues often arise as managers don't love having to play the enforcer role because it puts them in a difficult position between employees, who are advocating for flexibility, and executives, who are pushing harder on office time. Ultimately managers want to have strong relationships with their team and positive dynamics for delivering work.
Rob shared his experience that typically we see a delta between policy and eventual outcome in terms of the number of days a week spent in the office. In Michael’s words, we’re currently in the middle of a “great experiment” in understanding the repercussions of decision makers pursuing enforcement. The impact of enforcement, and whether it's wise or needed, is a big question that will play out over the coming months and years.
What’s important to make clear, is that there's a big difference between flexible work and flexible real estate. For Michael, this is clear from the growing interest from decision makers in ‘right sizing’ physical space and understanding what's required to support the kind of behavior that we're trying to facilitate for today's workforce. Flexible real estate is less easy to deploy than flexible working policies, and most importantly requires testing of flexible space solutions in order to find an answer that's right for an individual business.
Policies should be able to test what's working and how workspace is actually being utilized by the business before taking a larger jump into dedicated or leased space, and so central to this testing is often the use of flexible workspace. Technology like Desana enables businesses to test a policy thesis within an established product for 12, 6, or even 1 month at a time. Decision makers are then able to leverage the insights they get from that experiment to guide how their policy and strategy unfolds. Flexible workspace as a product is growing in its role as a utility to businesses, helping them navigate that uncertainty.
Testing is extra important because of the increasing complexity within real estate strategy. 5 years ago, the math around the office wasn't that complicated for most companies with corporate employees. You had a point of view on desk p/sqm, knowledge on head count, an estimated growth rate in certain locations, and the focus was on investing in space years in advance of growth to buffer against that. A desk was planned for every person, and these considerations helped you spit out a floor plate or office plan that made sense.
However, the shift for corporate employees from a fixed location to a variable location has made the questions much more dynamic. As Rob commented:
“With more complicated math required, it puts pressure on real estate leaders. How much square footage or square meters do we really need relative to the head count, based on current market trends and employee needs? There's pressure on lease terms and pushing the lease length downward to enable more flexibility. The name of the game for a workplace executive has really shifted towards approaching workspace with an agile perspective, enabling experimentation, acting iteratively, and then making smart decisions on how much space they require as a result.”
As companies test and try to build a more considered thought process around how they approach the workplace, it's become clear that flexible workspace has an incredibly important role in reducing jeopardy in decision making. For example, the risk is pretty high if you commit to space for 5 or 10 years, but very low if you use on-demand flexible workspace, only pay for what's used, and aren’t committed to use it ever again if it doesn't work for your team and business.
There are a myriad of new products in the market bringing different solutions, but most important is the ability to test a thesis with low jeopardy. Decision makers want the ability to implement a solution, see exactly how it's used, and then use that data to inform a long-term decision. Many of our larger customers even supplement their own buildings with on-demand, which is a really interesting agile approach.
In light of this, it’s clear that the market is a fundamentally different place for workplace professionals compared to 5 years ago. Previously Real Estate executives largely owned all calculations and decision making on workspace in a fairly independent role, with maybe a little interaction with the people or the HR team. HR leaders were very much focused on their own sphere of recruitment, retention, comp benefits, learning and development etc, with little input from the real estate side. As a result of the shift towards flexibility, the thought process around workplace strategy has become more complicated.
Rob shared that the way he’s increasingly come to think of it is “as a triangle”. On one leg you have policy, such a policy on flexible work or how much time you expect people to be in the office. On the second leg is office metrics, like usage and attendance, which are of course heavily impacted by policy. On the third leg you have employee experience and engagement, which are both impacted by policy and the experience you create in the office:
“And so, if you move any piece of that, it moves the entire picture. So the role of the real estate exec changes pretty meaningfully because now they have to be really fluent in understanding of policy and implications downstream for how the workplace is going to be used.”
Real Estate professionals therefore have to be really fluent in the business people strategy, which has moved upstream of workplace strategy in terms of deciding how much space you need and how you’re going to use that space. The skill set as a result is quite different, and much more data fluent. They have a really good thumb on metrics, both internal ones and how their metrics compare to the market and their competitors.
“It's overall a much more dynamic environment than it used to be a few years ago, and workplace executives are having to move up the curve really fast on that, and collaborate with new partners internally in order to be able to think through how space and their allocation of it needs to evolve.”
In Michael’s experience Real Estate executives are also having to think much more specifically about team roles, and measuring the utility of workspace to job function. They now need to know how the output of a team is affected by the physical space they’re either mandating the use of or using to achieve certain tasks:
“It’s broadly accepted that different types of people get different types of work done better in different environments, so how do you factor that into square footage decisions? How does the workspace you commit to balance across the different functions of the business? It's an interesting and complex web of different considerations now versus simply head count and square foot.”
If you have a lease decision coming up in a particular location you can’t just look at aggregate head count but ask what the composition of those people look like - is it all engineers, or is it finance or marketing? Engineers might come in the office one day a week, while finance comes in 4 days a week, and that's going to significantly alter your daily attendance ratios or how you have to think about design of the space. Today there's a much higher level of sophistication to decision making, with big financial implications from getting it right or wrong, given real estate is typically the second largest cost item on the P&L behind people. Real Estate decision making has become both more complex and gained more scrutiny, which really changes the game for professionals.
One of the most talked about challenges in delivering flexible work at an enterprise level is meeting the expectation for far more granular reporting and reliable data to support decision making. Previously, the key high level information needed was square footage and cost. Now, there are a more complex set of requirements such as how you report that occupancy data, and it all comes under far more scrutiny today than it's ever been before.
In 2023 there was a lot of discussion around back to the office mandates and how aggressive they might be. Rather than push hard we actually saw most companies not commit strategically. In 2024 the question has shifted towards the decisions that need to be made to support hybrid policies. Rob laid out come of the questions being asked:
“What's the mix required between individual workstations and communal or collaborative space? How much of it needs to be owned space, leased space, or flex space? How do we gain more agility while still supporting culture and being fit for purpose? How are our employees using our space? How does our spend and usage compare to the market? These are all questions that in 5 years time every real estate executive with meaningful corporate holdings on the planet is going to get asked by relevant financial leaders and boards.”
To be able to answer these, data is essential. The problem today is that, outside of internal data, most evidence is mostly anecdotal. This is the reason that Rob and the team at Flex Index are launching Flex Benchmarks, to enable that valuable external visibility on companies that are like for like with you in your industry, geography or size. The result is that when asked by an executive for strategy and thinking, you have both your internal data and external input from reliable industry benchmarking.
One of the big problems emerging from the growing use of iterative, flexible workspace is that companies are dealing with a larger number of smaller tasks. The fragmented nature of flex providers brings an increased operational burden of dealing with fragmented procurement, contract and invoicing requirements. Even for larger companies, Real Estate teams are generally relatively compact and quickly become stretched. To prevent bottle-necking and remove this friction, Desana has recently launched FlexPay, which streamlines the procurement of employee flexible workspace memberships into a single global agreement.
It may be clear that a regional sales team requires a 10 person dedicated office, but the best solution in a particular market is from a different vendor or provider, and this may occur over and over in different markets. The challenge for large companies is streamlining the procurement process and jumping the legal hoops needed to adopt the use of that solution. It’s something Desana has focused on solving, using our existing proprietary legal framework to make it compliant and scalable for enterprise businesses. We enable global businesses to use our thousands of different vendors, taking advantage of our payment framework across 69 countries. We have a bespoke legal agreement that reduces the process from 4 months to 4 days, with streamlined payments and a single contract - so your sales team can start using that space and if they ever stop needing it then you can immediately exit the agreement.
Both FlexPay and Flex Benchmarks are examples of how businesses like Scoop and Desana are evolving to meet the demands of enterprise customers for deeper investigation, innovation and improvement in the market. Quick decision making will become essential, and innovation is supporting businesses to get to a place where flexible workspace is hugely responsive to business demands. This in turn provides Real Estate executives with more freedom, through the confidence that they have the right analytic underpinning and options available.
To find out more about FlexPay book a demo with our team here, and follow Flex Index here to be the first to hear about Flex Benchmarks.
