The Flexible Workplace Market: Low Barriers To Entry, High Barriers To Success

While a quarter of London businesses are shrinking their office footprints and 18% are opting for flexible and shared space, occupancy rates at flexible offices are back to pre-pandemic levels and continue to rise. 

Across the market, enquiries for flexible space have increased significantly, flexible space operator Clockwise Chief Operating Officer Alexandra Livesy said. While startups and small and medium-sized enterprises have long been prime flexible space tenants, many large businesses are now looking to add serviced space into their real estate footprints.

This is grabbing the attention of potential flexible space operators. However, while the barriers to enter the market seem low, the barriers to success remain high, Livesey said. 

Bisnow spoke to Livesey about what these high barriers are and how to turn these into opportunities to succeed.

Bisnow: What does a workspace operator need to do for a space to be successful?

Livesey: Anyone can fit out an office, create smaller units and add the IT infrastructure to be a flexible or shared space. To be really successful at scale, you need a consistent service level that sets you apart. 

I know that our members will walk into the workspace in Bristol and have the same warm welcome as in Belfast. It boils down to creating both uniqueness in each space and consistency across the brand.

Bisnow: How does Clockwise achieve this?

Livesey: There are a number of factors an operator has to get right to be successful. The first is design. 

Following the pandemic, it’s easy to assume that people only go to an office to collaborate. In reality, this isn’t sustainable, and a space needs ample seating options for when employees have downtime or are working alone. 

When you work at home, sometimes you’re at your desk, sometimes on the sofa, sometimes at the kitchen table. The same is true in a workspace. People can’t spend eight hours back-to-back in meetings, but often this isn’t taken into account when designing a flexible or shared space.

While offices need collaboration space, they also need areas designed to help people move about as they need to. Design also needs to bring in the domestic factor, such as comfortable seating or artwork, the little things that encourage people to spend time there.

Bisnow: How does Clockwise go beyond design to create a workspace people want to be a part of?

Livesey: A key element for us is the events calendar. Clockwise holds more than 500 community events a year on everything from growing a business to personal development to give members the social engagement they’re seeking. 

To provide even more social interaction, we have a general manager at each property who acts as a walking notice board. They spot opportunities to introduce people or businesses to each other, facilitating networking and idea sharing. 

Our events and personal approach are two of the main reasons members choose a workspace with us. Entrepreneurs come in all forms. They’re not all extroverts and might benefit from someone taking away barriers to meeting people. They like the idea of having a trusted person on-site.

Bisnow: Do these managers help to create the uniqueness of space that you see as important?

Livesey: Our general managers are from the local area, so they ensure members make the most of the location. This is another area that some flexible workspace providers might get wrong; they don’t understand the nuances of each individual market. 

You could create a workspace in Glasgow and really understand the market — how people talk, the events they want, the hours they work. Go down the road to Edinburgh, and it’s a totally different way of life. They even say hello in a different way. 

That’s where a local workforce is important. It’s something that successful hotels have understood for years.

Bisnow: How does consistency of brand contribute to the success of a workplace?

Livesey: While each site needs to work within its market, a consistency of service level across locations is vital for a flexible workspace provider to scale effectively. This boils down to creating a business culture and processes that can scale. 

When you open one workspace, the senior leadership team is close. When you open three, four or five, that isn’t possible, so you need processes in place to maintain a high level of standards. Otherwise, this will quickly fall down because you can’t be in five places at the same time.

Bisnow: What should a landlord consider if they are hoping to introduce a flexible workspace?

Livesey: Increasingly, landlords are considering including flexible space in their portfolio, but many don’t appreciate what is required to run spaces efficiently. One factor to consider is where leads come from. 

Today, a new member could come via an agency, directly to the business or through recommendation from another member. That one element of the process alone takes time to manage. 

An operator needs to have rigorous finance and compliance processes in the background to protect their business, which can be daunting for a business less experienced in this area. A more effective solution often is to partner with a workplace provider with an established brand.

Bisnow: How has Clockwise expanded in the last few years?

Livesey: When I started at Clockwise three years ago, we had three locations. Today, we have 500K SF in the UK and will add 50K SF. Most recently we launched a mixed-use building in London, Bromley Old Town Hall, which is our first proof-of-concept site that sits alongside a hotel and restaurant.

We also have an office in Brussels, and this year we’re going to open a space in The Hague, followed by one in Germany and a second in Belgium. Our goal is to reach 250K SF in Europe over the next three years.

When we’re looking for new opportunities, we never compromise on either the quality of the property or the location. All Clockwise workspaces are in well-connected commercial areas where people can go for lunch or carry out tasks such as going to the bank. 

My remit when I joined Clockwise was to lead the business through a period of significant growth. The biggest challenge is to ensure we grow in a considered way. We are now working on the second iteration of our positive impact strategy, which details our pledge to provide carbon-neutral workspaces, add social value to the communities we operate in, and enhance the health and wellbeing of everyone who works in our spaces. 

We created this strategy as a catalyst for action and to attract like-minded people who share our values. As a business, we talk about the power of collaboration, and our contribution supports a bigger picture: the UN's Sustainable Development Goals and the UK’s levelling up agenda.

In order to make progress, we must all commit to a more mindful way of working. I ask this of our investors, colleagues, suppliers and members, but also the wider workspace industry. It’s time for our sector to step up.

This article was produced in collaboration between Clockwise and Studio B. Bisnow news staff was not involved in the production of this content.

Studio B is Bisnow’s in-house content and design studio. To learn more about how Studio B can help your team, reach out to studio@bisnow.com.