If workers have to choose where to work – office, home, or anywhere – it will not be surprising if the latter two gets the higher votes. The concept of office may appear to be unattractive to the future of labour. There are various reasons for this paradox, such as mobility issues, new generation workforce – there will be more mobile workers, the rise of startups, reduction of workspace for cost efficiency, and the list goes on.

The trend of office on-demand is on the rise too, thanks to the sharing economy that has taken the industries of taxi and hotel by storm in recent years. In replicating the success of Uber and Airbnb for example, office space can be shared too now. This is most welcomed by highly mobile workers and lean startup companies. ‘Former’ startups like social media platform, Instagram and music streaming provider, Spotify did not have physical offices when they first started operations. Moving forward, it is also possible that more corporations in the future may ‘share’ their office spaces for business travellers – Office-as-a-Service may just become a common offering in the future.

Evolving office structures and commercial spaces will call for a change in facilities management (FM) propositions. Workplace occupancy patterns will likely be more volatile as there will be more mobile or remote workers, and property owners contemplating workplace on-demand concepts are increasing. In turn, FM providers face business risks such as shrinking demand for long-term contracted soft services.

On the contrary, large international consumer brands such as Apple and Nike are creating waves with their ownership of giant HQ campuses that showcase the advancements of building technologies. Unlike conventional office complexes or commercial high rise, office campus structure promotes various work-life balance facilities, such as sports complexes, recreational parks, mini retail, body therapy and reflexology, and even medical care. These campuses, usually in hundred thousands of square meters, inadvertently made FM services more complex than before. Furthermore, advanced FM solutions in these large and new office campuses are usually associated with green technologies or energy management optimization.

Digitalization also alters how industries thrive; for instance, conventional brick and mortar B2C retailers against ecommerce platforms. Next, there are on-the-go retail concepts whereby permanent physical shops become a thing of the past. Therefore, the future of retail is likely to affect the business models of FM solutions. With shopping malls and retail outlets not likely to increase floor space significantly in the next 10 years, facility managers may need to shift client focus or improvise service propositions to symphonize with changing customers’ business landscape. Trends like retail on-the-go may change FM cost structure and service level agreements (SLAs) in the retail industry. FM charges by cost-per-square-feet are likely to become a passé as retail floor space configurations become more fluid in the future.

The workplace of the future is likely to evolve and it will effectively adapt FM business models. The changing dynamics of workplace is expected to be more profound in office and retail segments, and to some extent the hospitality industry. Fortunately, to the relief of FM companies, specific customer groups such as healthcare, data center, and industrial have other specific intricacies that are already requiring rigorous FM SLAs.

By and large, FM providers are expected to be nimble with new business models and cost structure for the changing workplace environment. For example, new FM companies are already introducing on-demand service models via mobile application platforms and web. While it is also notable that this phenomenon is not a competition to today’s major FM providers, the FM market and its future will likely thrive with the rise of on-demand economy.

Melvin Leong
Melvin Leong Associate Director, Frost & Sullivan, APAC. Melvin is based out of Malaysia and can be reached at melvin.leong@frost.com