If workers were to choose whether to work from office, home, or anywhere, the latter two options getting a higher number of votes would not be surprising. The concept of office may appear to be unattractive to the future of labor. There are various reasons for this paradox. These include mobility issues, new generation workforce preferences (with more mobile workers), rise of start-ups, reduction of workspace for cost efficiency, and so on.

The trend of office on-demand is also on the rise, thanks to sharing economy taking the taxi and hotel industries by storm in recent years. Replicating the success of Uber and Airbnb, for example, office space can also be shared now. This will be welcomed by highly mobile workers and lean start-up companies. ‘Former’ start-ups such as the social media platform, Instagram and the music streaming provider, Spotify did not have physical offices when they first started operations. Moving forward, more corporations may ‘share’ their office spaces for business travelers, with Office-as-a-Service becoming 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 are likely to be more volatile as there will be an increasing number mobile or remote workers and property owners contemplating workplace on-demand concepts. In turn, FM providers will face business risks such as shrinking demand for long-term contracted soft services.

Large international consumer brands such as Apple and Nike are creating waves with their ownership of giant HQ campuses showcasing the advances in building technologies. Unlike conventional office complexes or commercial high-rises, the 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 covering hundred thousands of square meters, have inadvertently made FM services more complex than before. Furthermore, advanced FM solutions in these large and new office campuses usually resort to green technologies or energy management optimization.

Digitalization also alters the way in which industries thrive; for instance, conventional brick and mortar business to consumer (B2C) retailers against eCommerce platforms. Then there are on-the-go retail concepts that make permanent physical shops a thing of the past. Therefore, the future of retail is likely to affect the business models of FM solution providers. 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 the changing business landscape of customers. Trends such as retail on-the-go may change FM cost structures 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 adopt FM business models. The changing workplace dynamics are expected to be more profound in office and retail segments and, to some extent, in the hospitality industry. To the relief of FM companies, specific customer groups such as those in healthcare, data center, and industrial sectors have other specific intricacies that already require 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 through mobile application platforms and the Web. While these do not pose a competition to today’s major FM providers, the FM market is likely to thrive with the rise of an on-demand economy moving forward.

About Frost & Sullivan

For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success.

Frost & Sullivan

For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success.

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