Andrew Robinson | Co-founder and Executive Director | SiSebenza | mail me |
Businesses in South Africa are under financial pressure. There’s no need to go into the why of the situation; we’re all acutely aware of that. More important to consider is the how for sustainability; ways to reduce costs.
There’s a lot of talk about co-working, or flexible working, spaces. They’ve become very trendy places for digital nomads, entrepreneurs and freelancers to work from but offer substantial benefits to larger businesses too. I’m not saying that a cool workspace is going to save your business, but I am saying that a simple cost analysis will show that regardless of the size of your team, moving them to a flexible space will save you a lot of money.
Flexible workspaces
Flexible workspaces are designed to offer a plug and play work environment.
You get your desks, storage, internet connectivity, reception and boardroom facilities and security as part of the deal. Depending on the flexi space brand you pick, you will also get access to anything from coffee hubs and meals on offer to gyms and networking events free of charge.
Cost
The cost of space per square meter may or may not be a benefit to you – that all depends on whether you’re currently based in prime A-grade offices in key business locations around the country, or peripheral geographic locations.
But where you will see rental benefits is on the fact that there are no onerous long-term agreements. They’re called flexible spaces for a reason because they offer flexible rental options making them a cost-effective alternative to commercial office spaces.
Saving
Then there is the infrastructure cost saving. If you’re a smaller business, you save on wifi and network costs but for larger organisations, the infrastructure benefits can be substantial.
Combined with a clever move to cloud servers, you automatically negate the cost of running server farms which come with high maintenance and energy costs. There could also be IT staff salary savings as you won’t need as many – if any – IT resources. A high level IT manager in Johannesburg is currently earning more than R500k per annum.
Other salary costs immediately cut from your annual expenses include a facilities manager; earning in the region of R350k, a receptionist at R85k, cleaning staff which could range from R90k to R120k per person, and your security contract.
For those who are considering a move to a new space, a flexible office solution also saves you on the capital expenditure of the move. A newly kitted out office for 100 people – nice but not too fancy – will cost you at least R1.5million – that’s a big expense on your balance sheet that needs to be written down over five years.
The world over, big well-known brands are moving their teams into flexible office solutions. Globally flexible, co-working and shared offices currently count for 5% of the office space market with an estimated value of $26 billion, having shown 15% year-on-year growth over the past five years. And there is no slowing down in the future with predictions that by 2030, its total market share will increase to 30%.
Yes there are proven benefits to greater creativity, improved productivity and enhanced general worker well-being from working in these locations, but trust me CFOs are only interested in one thing; the bottom line.
