Just over 10 years ago co-working spaces began appearing as an affordable alternative to traditional offices, perfect for blossoming start-ups and freelancers, as well as for an upcoming millennial workforce seeking flexible spaces to suit their lifestyle. Yet in the last few years, the co-working landscape has begun to shift, with big corporations turning to these shared environments in search of adaptability, productivity, cost efficiency, and talent retention & acquisition. While this is a growing global phenomenon, with 44% of multinational corporations (MNCs) utilizing some form of flexible office solution, this trend has taken some time to find a foothold in Asia, especially Hong Kong. However, it’s now predicted that 30% of APAC real estate portfolios will be flexible workspaces by 2030. Below are some of the key motivators behind why MNCs in Hong Kong are discovering the value of co-working, and how they are tapping into a new workforce.
As corporations aim to stay ahead of the curve in today’s digital era, co-working spaces, which are laden with digital-savvy start-ups and millennial entrepreneurs, offer a rich source of talent and potential.
By locating teams in these intrinsically collaborative environments, MNCs are able to build relationships with innovative SMEs and millennial entrepreneurs who are pioneers in the digital revolution. By placing roots in the innovative tech-scene, either through the exchange of services or integrating start-ups as vendors, larger companies ensure they will stay relevant for years to come. In turn, this helps them both acquire new and retain existing Millennial and Gen Z talent who demand to work in progressive and SMART environs – 42% of these younger cohorts would go as far as to quit their jobs if the tech wasn’t up to scratch. These workers have come to expect the type of flexible workspace offered by co-working environments, and corporations are looking for solutions to meet that need.
Small start-ups and solopreneurs are often looking to outsource niche skills and services to their financially liquid counterparts. Therefore, MNCs are often able to find a suitable partner to help tackle an issue and, in doing so, nurture the mutually beneficial ecosystem within which both parties exist. As Sean Lynch, Asia-Pacific Managing Director at Instant Group, highlights, “Corporates are absolutely adopting co-working…they don’t necessarily want to work in a traditional environment – they want to have up-to-date facilities and agility.” It’s all about being connected to an innovative community of younger talent, and as the unenthusiastic zeitgeist has receded from Hong Kong’s co-working scene, entrepreneurial thinking has blossomed in its place.
Flexibility & Productivity
The days of working 9 to 5 are long gone, 53% of today’s global labor force works remotely for at least half of their week, with that figure standing at 36% in Hong Kong. This trend has been fuelled by the clear indication that remote working increases people’s productivity, happiness, and also saves costs. Millennial and Gen Z workers understand this and have come to expect a greater level of flexibility in how they approach and accomplish their work. Given the rapid growth of telecommuting, corporations are looking to co-working spaces as waypoints for their traveling and remote employees.
Often located in key business and cultural districts, co-working spaces give corporations the ability to be in close proximity to key clients, mine additional talent pools, and expand into different market locations. In short, corporations have started to view flexible workspaces as forward bases for reconnaissance and expansion.
In contrast to traditional offices, co-working environments provide ready-made environments with room to scale on-demand. The flexible nature of these spaces is a natural fit for a flexible, younger workforce, and MNCs are taking notice.
The bottom line is a key decision driver for large MNCs and, in this regard, Hong Kong co-working spaces once again come out ahead. In the world’s most expensive city for office rent, the average cost for regular office space is HK$216,000 p.a., compared to HK$60,000 p.a. for a rented desk. That’s a saving of over 300%.
While relatively slow to take off in Hong Kong, the co-working trend is now booming and CBRE’s Asia-Pacific Occupier Survey highlighted that 64% of MNCs will be using some form of third-party office space by 2020, with cost savings cited as the main driver. The average coworking costs in Hong Kong are approximately 31% cheaper than London and 44% cheaper than New York, which is in direct contrast to the general office landscape.
With all these benefits, the choice is becoming clear for MNCs. Not only have co-working spaces become a wise financial decision, but they also serve as a bridge between a young and innovative millennial and Gen Z workforce, and corporations looking for new ways to attract and preserve talent.
Join theDesk: Your co-working and events space
Be part of our vibrant professional communities. Enjoy our flexible plans for private offices and desks. Let’s make it happen together.