This challenging period has created a desire for asset-light models which enables adaptability: Dharam Mehta, WeWork India

• The pandemic has had an enduring effect on our work lives. More and more organizations and individuals are preferring flexibility when it comes to workspaces.
• We recently caught up with Dharam Mehta, Head of Business Operations, WeWork India who helped us understand the impact the pandemic has had on the co-working space, where things stand now and what the future of flexible and co-working spaces will look like.

The last 17 months have seen workplaces go through different phases as work cultures slowly evolve, thanks to the enduring impact of the pandemic on our lives. Companies that could never considered remote work are now considering it seriously. And this could come as a blessing for the flexible workspaces segment .

A study by McKinsey from earlier this year revealed that the 278 executives it surveyed in August 2020, are on an average, planning to reduce office space by 30%. The future of the the workspace seems hybrid. Most companies are charting plans to introduce rostered work shifts and flexible timings into their model.

While a lot of us were happy about the cut down in travel due to the lockdown, the pandemic and the work-from-home situation has led to fatigue, people want to go out, interact more and that’s where again, flexible workspaces could be a boon for companies and employees.

In a recent conversation with Dharam Mehta, Head of Business Operations, WeWork India, we tried to understand the impact the pandemic has had on the co-working space, where things stand now and what the future of flexible and co-working spaces will look like.

Excerpts:

Q) After the second wave, most companies are considering a hybrid work model which could help co-working spaces. What is the opportunity for the industry?
In the past few months, employees have inevitably been challenged by the long-term fatigue, limited social interaction and inadequate infrastructure which have become synonymous with work-from=home. This has taken quite a toll on the mental health of employees, with work-life balance and compartmentalization a priority, now more than ever. According to a recent report by Microsoft, 73% workers said they are craving more in-person time with their teams. And more than 3 in 4 Indian workers (74%) are keen on flexible remote work options. This sheds light on the growing potential for flexible workspaces, which cater to the evolving needs of businesses and the ever-expanding workforce.

As the hybrid work scenario evolves, people want to stay and work closer to home. Flexible workspace providers like WeWork help reduce commute time by offering flexibility and customization; contributing to increased productivity and a stronger work-life balance through spaces in prime locations. Additionally, with the safety and health of employees at the forefront of conversations, businesses are looking for flexible workspaces with the highest levels of safety protocols in place, while also looking for options that are accessible to employees across the country. WeWork has always had stringent health protocols in place and has advanced these measures to ensure a safe working environment for our members. We also offer access to a culture of community, collaboration and networking on a global scale. With young, ambitious people looking to network and grow, this enables enterprises to expand their talent pool as well.

Q) How have things been for WeWork from a business perspective?
The last year and a half has been challenging for all industries. That being said, we have seen a consistent uptick in the demand for our workspaces. In fact, the first quarter of 2021 was our best sales quarter yet at WeWork India, with 10,000 desks sold. Despite the slow absorption for commercial real estate with 5.53 million sq ft leased in Q1 2021, WeWork remained bullish with driving sales and net absorption, with over 7 lakh sq ft of area being sold (over 10% of the total leasing in the market). In line with our commitment to long-term growth, in April 2021, we announced a fresh round of funding of Rs 200 crore as well. This comes after an initial round of funding from WeWork Global of $100 million in June 2020, reiterating stakeholder confidence in the flexible workspace industry in India

On the demand side, flexible workspaces continue to witness an uptick given the various solutions it offers to businesses of all sizes. There is also a definite rise in large corporations and enterprises adopting the flexible workspace model. In its latest report for the office market, property consultant Cushman and Wakefield said the total seats leased by enterprises could cross 50,000 during the 2021 calendar year.

We have seen a consistent rise in large enterprises wanting to shift to our workspaces and sign long-term deals. Over 60% of our member base in India comprises large enterprises and since the lockdown, we have seen a 10% rise in our enterprise portfolio. Flexible lease options and customized product offerings provided by WeWork promote business agility that enable long term expansion and employee retention. For eg: Tata Sky Broadband in May 2021 signed a one year commitment to our On-Demand service, making WeWork its workspace of choice for its 250 employees. This allows TATA Sky Broadband employees to work from any WeWork location across the country, and using the On-Demand product, teams can choose when and where they would like to come together and collaborate. Colliers India has also recently shifted their headquarters to WeWork at Two Horizon Center in Gurugram. This is a specially curated and designed workspace for the company, providing them with the ease of access and flexibility they require.

Q) Do you anticipate there will be an increase in the number of individuals opting for co-working spaces too, in post second-wave times?
With the new normal blurring the lines between work and personal life, more and more people are looking to come back to work and have realized the importance of compartmentalization. With more and more time being spent indoors, the opportunity to engage and collaborate with co-workers has been limited. In such times it is more important than ever to ensure a sense of community. WeWork, through its collaboration, networking opportunities provide its members a sense of community in their workspace, which offers small businesses an added benefit.

Infact, while 60% of our member base is currently enterprise, the rest 40% comprises individuals, small and medium size businesses as well. Our successful growth through the first quarter is a result of growth across all sizes of businesses. Furthermore, entrepreneurs, startups and small businesses find a stronger sense of community at our workspaces. The networking opportunities available at our spaces are often unparalleled and are a contributing factor to this demand.

Q) What does WeWork's virtual offices entail? How can people benefit from it?
At WeWork, we are constantly looking for ways to create an accessible and easy way of working for our members and all the companies we work with. We noticed the gap in the fact that companies which need to be registered in India need to have an office address and to address that need, we announced our new product offering Virtual Offices. This is running in all 6 cities of WeWork India where we are offering our network of office spaces for businesses to use as their own address on a subscription basis. This allows companies a professional address which goes on to their business cards, becomes their communication address and gives them access to all 35 WeWork buildings across 6 cities in India. Till date, we have already catered to more than 100 companies where the process is completely self-serve and digital and helps save valuable customer time as it takes a couple of minutes.

It has various favourable packages starting from 6 months that goes upto 24 months. These memberships also include monthly credits worth Rs 2500 as an introductory offer. Additional benefits bundled into the offering include mail handling and storage facilities, ability to use credits to access meeting rooms or to use them as day passes across the entire WeWork network in India. These benefits can be availed by any employee in these companies as well. Prioritizing health and ease of usage for potential members, WeWork has ensured an end-to-end digital process for registration including NOC signing and agreement processing which can be done within a couple of minutes.

Q) While things are slowly getting back to normal, we are still some time away from people getting completely comfortable with sharing spaces. How are you then encouraging and assuring people/corporates about the safety of coming to your office spaces?
We were quick in reviewing member feedback, and worked with industry partners across health and safety, cleaning, construction, and design to provide enhancements and developed a workable plan to safeguard our members and employees. We have focused on constantly engaging with our members and employees, by listening to their needs and requirements and also ensuring we kept in touch through the lockdown via virtual events and regular catch-ups.

As some of the key precautionary measures, all our buildings are fumigated and sanitised thoroughly before members come in. From a seating arrangement perspective, spaces in common areas and conference rooms are modified to ensure a minimum of 6 feet distance between two people. We have also implemented mandatory temperature screenings outside our buildings and all our members and employees will go through that check before entering the space. We also launched the WeWork Safe Program in partnership with Dettol to deliver industry-defining standards of cleanliness and disinfection across all our buildings. We are also the only shared workspace in the country to have received the global certification from The British Safety Council, for our efforts in taking stringent risk management and control measures to keep the environment safe and secure for all members and stakeholders.

Q) With more and more people wanting to cut down on travel, and wanting to work from close to their homes, what are your plans of further expanding your presence and also entering smaller cities?
At WeWork, flexibility is our core competency and what we do best, be it pricing, occupancy models, locations or scalability, WeWork is equipped to offer the most flexible and customizable solutions to businesses in a very short span of time in any of our 35 buildings across 6 cities. Our membership model of hot desks, dedicated desks, and private offices have already found popularity among enterprises and small businesses. Added to that, the new product offerings such as WeWork On Demand, WeWork All Access and WeWork Business Solutions offer flexibility to businesses and entrepreneurs to make decisions for their businesses to thrive without the burden of fixed asset investments.

As of now, our plans are to provide all our members the safest, most hygienic and customized workspaces that help them achieve their goals. Our goal, for the foreseeable future is sustainable growth and profitability. We will continue to innovate on how we can enhance our member experiences and continue to add value to their businesses.

Q) What will the workplace of the future look like?
The pandemic has been a catalyst for a new future of work. While companies proved that working from home is possible, most don’t intend to be 100% remote forever. The workplace of the future is hybrid in nature and flexible at its core. The main driving forces behind businesses opting for flexible workspaces like WeWork, will continue to be flexibility, agility, safety and community at the workplace.

What this challenging period has done is created a desire for asset-light models which enables adaptability. This has led to the intent of moving real estate costs to a variable expense as opposed to a fixed one, which would unlock significant cash in hand. This gives the much needed agility to businesses to react to market fluctuations in a swift and smoother manner.

From a member/employee perspective, high standards of safety and hygiene will continue to be paramount. Fostering a company culture and a sense of community are also essential to maintaining employee engagement and well-being, amplified in today’s times after this prolonged social isolation. The extended WFH situation has taken a toll on overall mental being and employees are craving compartmentalization and a work-life balance along with the flexibility of being able to work from convenient locations.

At WeWork India, we strongly believe that flexible workspaces will continue to drive the future of work in the post-COVID scenario.

Q) What are a few trends in the shared workspaces industry that we should watch out for?
The new normal has led to the emergence of new working styles, such as rostered work shifts and flexible timings. There is a definite rise in large corporations and enterprises adopting the flexible workspace model. In its latest report for the office market, property consultant Cushman and Wakefield said the total seats leased by enterprises could cross 50,000 during the 2021 calendar year. More organisations are embracing the idea of flexible workspaces as a viable option as they are able to save on overhead costs and fixed assets. According to a recent report by Microsoft, 73 per cent of workers said they are craving more in-person time with their teams and more than 3 in 4 Indian workers (74 per cent) are keen on flexible remote work options, a Deloitte study states that 94 percent of respondents indicated they would benefit from work flexibility, where 43 per cent of respondents have said that workplace flexibility is the best for having stable mental health. According to the Accenture Future of Work Study 2021, 83% of employees surveyed favoured a hybrid work model where 85% of the corporates feel that being a part of a flexible work model could help them stay longer with an organisation. Furthermore, employees have wanted to come back to work, with many companies recognising the importance of teamwork dynamics contributing towards productivity. After prolonged work from home in isolation, we have seen the toll taken on mental health, collaboration, performance management and most importantly, work culture.