Employees spend about 40% of the workday at their desks, but until now, most companies have been paying for 100%. With hybrid and flex workspace models, that’s changing, and in uncertain times, the resulting cost savings can be the difference that helps a company survive — or thrive.
We’ve built a platform that gives companies the most flexible and cost-effective options for office space at scale. This sounds appealing to real estate and facilities managers, not to mention finance departments, sure — but what does this look like on paper?
Last year, we ran a report in which we found that the annual cost per employee to lease a traditional office in Manhattan, distributed across a company’s employees, averaged out to about $10,000 to $12,000 per desk, per year.
Before the COVID-19 pandemic, non-traditional flexible workspace options were beginning to catch on as companies learned that renting space via a flex space provider like WeWork or Regis tended to save about $2,000 per desk, per year.
Meanwhile, hybrid solutions that rely on on-demand space, like Upflex’s Desk Memberships or Hub and Spoke models, are built with an entirely different approach to workspace: Real estate departments use rich data about when and where employees are working to iterate and increase efficiency, paying for only the desks they need, as opposed to locking themselves into leases of expensive, often underutilized space. This approach can save companies thousands more, per desk per year; on average with a hyper-flexible, on-demand workspace model, companies see an average cost reduction of 40%.
Andre Jacquet, CCO of smart water filtration company Rocean, told our team in a recent interview how this flexibility and savings helped his young company scale: “We’re a start-up, roughly two and a half years old, and as start-ups go, things go up and down — and up,” Jacquet said. “Sometimes we needed a lot of people, sometimes 30 or more. Sometimes we didn’t have enough capital and we had to hunker down to the bare minimum, more like a team of seven. Sometimes we would have customers in, and needed space that looked very nice. Sometimes we were building prototypes and needed lots of space to accommodate ordering all those parts and doing that work.”
Rocean kept growing, and as they grew geographically, in cities other than New York, Upflex helped them keep workspace costs down, and stay nimble — they could expand space or cut costs at any time.
Beyond the HQ, there was another workspace challenge for Rocean to solve: The sales team needed productive spaces to work and conduct meetings while they were traveling. Often, their only options were coffee shops — loud, distracting, and sometimes scant on outlets — all unpredictable factors that could each skewer productivity.
Before implementing Upflex, to find a productive, reliable workspace, a salesperson would need to find a coworking space via a search engine, contact each to determine which had available space, handle billing for an individual day pass, and submit an expense report after the visit that would then need to be processed by the accounting department, causing a wait for reimbursement.
With Upflex, Jacquet says, employees instead use a single app to search and book, and payment for all employees, in all cities, at myriad coworking space brands, is handled by the company in one simple invoice. Upflex also allowsRocean to pay only for the space their employees use. For example, Rocean’s salespeople only need to use workspaces for about two hours at a time on average, but in booking one-off coworking spaces before Upflex, they had to purchase full day passes at a cost of around $30. Upflex allows them to break up those costs into smaller increments, and by paying only for the time used, Rocean saves an average of 65% each time their salespeople book a workspace.
Some heavy travelers use spaces several times a week. That savings add up.
Another Upflex user, Rosie Labs, shared a similar story with us: Nearly doubling their team from 18 employees to 30, they needed more space than the $8,000/month space they leased in Manhattan could offer. Switching to Upflex, they had access to more space while saving thousands a month in overhead, allowing CEO David Song to grow the team further and offer more competitive salaries while he was at it: “We were able actually to save money on rent and pay people more,” he told our team of adopting Upflex in place of their original lease.
Of course, these models are not just for start-ups anymore — increasingly, global corporations, like Schneider Electric, for example, are converting to hybrid workspace models too. And while cost savings isn’t the only reason for this shift, it’s certainly a big one. Some of the other reasons, like energy efficiency, ecological sustainability and talent retention, translate to lower spends and greater cost efficiencies down the line.
On top of all this, these models and toolsets reduce the workload for real estate/facilities teams and finance departments, allowing companies to manage all their third-party space under one MSA, with one bill, so they save HR departments and RE facilities managers energy and bandwidth — where time is money.
Saving 65% on every hot desk booked; saving 40% per year on real estate overall; retaining employees longer because they prefer workplace flexibility while boosting employee productivity: these are all benefits that companies, including Fortune 500 corporations, are starting to understand can outweigh the old-fashioned sense of integrity or brand image that came with a flashy, amenity-rich private headquarters or the perceived efficiency of having managing every aspect of your employees’ workspace in-house. And following the past year of COVID-19 remote work, while the future is so unpredictable, flexibility and cost savings are factors that are helping struggling businesses survive — and established businesses thrive.