India’s rapidly growing and modern workforce believes in working smarter and not just harder. Flexibility is now an essential element for India’s young workforce and sensing this, both employees and employers are increasingly embracing a hybrid working environment that combines both remote and office work. This among other things is affecting the commercial real estate market as enterprises re-think and reconfigure their office space requirements across both metros but non-metro locations as well. IWG Plc, the world’s largest shared office provider, with 3500 locations worldwide in 120+ countries co-working spaces under its flagship Regus and Spaces brands in 16 cities across the country is focussing on expanding further into smaller regional, tier 2 and tier 3 cities while also strengthening its presence in larger cities including Kolkata. As an important business hub, Kolkata is driving strong demand for flexible workspaces – in fact, it already accounts for around 8 per cent of the country's overall flex space footprint. As someone who has been at the forefront of driving the growth of flex spaces across India, Harsh Lambah, Country Manager - India, Vice President Sales - South Asia, IWG, shares his views on Kolkata having emerged as a key market in this domain, in addition to highlighting market trends and developments in this market.
Q. What growing trends is IWG witnessing in the Kolkata hybrid working sector?
We are witnessing strong demand for our centres in Kolkata as corporates are keen to adopt a combination of office and remote work. Hybrid working has now become the new work paradigm and organizations of all sizes are increasingly appreciating the benefits of this work model – whether it is the reduced commute for workers; the ability to work from multiple workspaces and home or the resultant improved work-life balance for employees. As a result, we are seeing a steady rise in demand across businesses of all sizes. These organizations have shown a high propensity to adopt a hub-and-spoke model of working, which in turn is helping them deconcentrate their workspaces from a single HQ or location into smaller, well-networked workspaces across the city. This is leading to a rise in the on-demand membership of IWG workspaces. On-demand membership has increased by 51% Y-o-Y and meeting room sales are up 95% for IWG in India. This increased demand shows that IWG is witnessing strong growth in the Indian market with accelerating demand for hybrid work solutions as more and more businesses permanently embrace the model. Our workspaces are present at locations covering all major commercial areas of the city of Kolkata, making us a well-suited partner for businesses seeking to adopt a hub-and-spoke model of office spaces.
Q. How is technology impacting the hybrid work model and how are Indian companies taking to it?
As the world shifts towards a more flexible way of working, tech-enabled work solutions are becoming increasingly important. Technology is enhancing the way we work and at IWG, we understand its impact and potential very well. Digital infrastructure will continue to be the foundation for hybrid working going forward. According to Cisco research, about 98% of meetings will have at least one remote participant in the hybrid world, which means technology will play a crucial role in ensuring there’s a level playing field in terms of people feeling engaged and being part of the discussion, even if there are many more people present in person. Technology is empowering workers to work where convenient – be it from a client location, their homes or elsewhere, without any reduction in productivity or needless wastage of time. Our customers in India understand the role that technology plays in enabling a hybrid work ecosystem and leverage IWG's IT and communications tech infrastructure exceedingly well to enable a secure and hassle-free hybrid working.
Q. What is IWG’s growth model for Kolkata? When and how many new centres are scheduled to open?
IWG is expanding its presence in Kolkata to meet the growing customer demand for hybrid workspaces. We currently have five centres, three of which are strategically located in Kolkata's Central Business District and two in Salt Lake City. In the next 6 to 12 months, we plan to increase the number of seats in existing locations and double the number of centres.
Q. What kind of client/sector mix is currently occupying / will occupy these centres (corporate/start-ups/MNCs/sectors?
Corporates from all sectors are adopting this hybrid working. This strategy helps companies control their CAPEX. In Kolkata, our customer mix includes a blend of both local Indian companies and MNCs operating in the region. We are also seeing smaller, and entrepreneurship-led firms embrace hybrid working in the city. Globally, IWG works with businesses of all sizes including 83% of Fortune 500 companies.
Q. The world is facing a possible recession/slow-down in 2023. How is this expected to impact hybrid working globally and in India?
As inflation increases and recession fears loom, enterprises are increasingly turning their attention to cost-cutting and looking at hybrid working as a solution to address this. IWG’s annual CFO survey shows that cost-cutting is high on the agenda as companies brace themselves for a stormy economic climate. With 91% of senior financial executives believing that a recession is inevitable, 97% are already cutting costs by more than 10% in preparation. As such, attention turns to areas in which companies can begin to adjust their expenditure and this includes reducing costs on office space. The survey reveals that CFOs expect hybrid work to significantly cut running costs while unlocking numerous benefits for their employees and business in the process.
In India, our network is spread across 16 cities through 91 workspaces, and we are bullish about our growth plans. Through a successful franchise and partnership model that is now in place, we are focusing on expanding our network in Kolkata and tier 2 & 3 cities of India with demonstrable return-on-capital and strong growth prospects. Our aim is double e our existing network across India over the next two years.
Q. Collaboration is essential for companies to thrive and there is this fear that hybrid working limits that. How can the two co-exist?
Collaboration is essential for companies and employees to thrive, and an important component of the hybrid model is spending time in person for face-to-face meetings, workshops, and interactions. Employees are spending less time in person, but it is of higher quality and with curated meetings. The productivity boost of hybrid working comes from combining the best of both worlds. Economic growth can come from increased productivity, and the hybrid model gives workers the opportunity to choose when and where they’re likely to be at their most effective. As a result, ‘hybrid-working’ is now the preferred solution for millions, as they divide their working hours between their company headquarters, a local flexible workspace, and their home – boosting corporate productivity while also creating a more sustainable way of working for both people and the planet.
Research by IWG has found that companies are realising that their workforces can be both highly engaged and productive using a hybrid model of home, local office, and corporate HQ. According to IWG’s survey, three times the number of FTSE 250 companies are currently looking to employ a hybrid office model compared to those looking to carry on in the same way as pre-pandemic.
Q. How would you define the future of hybrid working?
Organizations all over the world are waking up to the benefits of hybrid working and listening to what top talent needs to thrive. Hybrid is a new way of working that's greener, more flexible, and more productive. And it keeps people happier and more focused. The fact is hybrid attracts top talent – and keeps them happier. 87% of workers prefer this way of working. With 69% of businesses around the world struggling to recruit the talent they need, it’s more important than ever for organisations to make their company as attractive as possible. Hybrid working improves productivity too. Studies show that the number of high performers within an organisation increases when they are given flexibility like that offered by hybrid working. It stands to reason that workers who can reach their goals in efficient ways will be more likely to stick with a business. Companies of all sizes see addressing the need for their people to commute to work as the single greatest contribution they can make to reducing their carbon footprint. They understand that by bringing in a hybrid model of work into the heart of communities, they will immediately and significantly reduce the weight of traffic on roads and in cities across the world. It’s time to embrace a hybrid way of working that has the welfare of people, business, and the planet at its heart.
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