Indian Startups Are Flexing a New Way of Working

Navigating through the pandemic, the office sector underwent a paradigm shift as organizations were forced into working remotely. Startups and IT organizations were the first to adjust to this change but today, that act of resilience may have become an act of choice for some. The future of work has become a widely speculated and debated topic, now that organizations plan and execute their Return to Office.

Budget-conscious startups may hesitate to revisit traditional leasing models, which may propel the shift towards hybrid working styles. Our recent report, The Era of Flexibility in India, suggests that the flexible space stock in India is expected to cross 80 million sq. ft. by the end of 2025. It is expected that flexible workspaces will remain amongst the leading drivers of the office sector in the years to come with ‘core + flex’ strategies being at the heart of occupier portfolio planning.

Startups Driving the Wagon of Hybrid

The factors that determine office space consumption for startups include capital reserves, scalability, business/industry requirements, talent availability, employee experience and more. With flexible spaces, they can check most of these boxes while parting from the conventional setups that were cost-intensive and rigid. Startups thrive on flexibility, and hybrid work models capture their essence.

Thus, it wouldn’t be wrong to say that startups are leading the hybrid wagon—our reports corroborate, as most small companies are expected to have flexible spaces as a very significant (>25%) part of their overall portfolio.

Higher Demand = Higher Supply for Flexible Spaces

With large tech giants & other industry leaders embracing hybrid work, the demand for flexible spaces is increasing. Another report by CBRE, India Market Outlook 2022, suggests that top flexible operators are expressing interest in expanding their office portfolios by at least 30% in the next two years. As a result, flexible space supply is going to witness an upward curve in India as we anticipate flexible space stock to increase by more than 25% Y-o-Y in 2022. Several flex operators are also planning to increase their average center size and are foraying into tier 2 and tier 3 cities. From a short to medium-term solution for capital-light requirements to now being a part of the core strategy of most organizations, flexible spaces have definitely come a long way. Flexible Solutions are now being embraced by multiple sectors, including traditional industries like the life sciences, engineering & manufacturing, BFSI, research, consulting, and analytics, etc.

Other major trends that will drive the sector…

Some organizations are also testing hub and spoke models, opening satellite offices across locations. This is helping them attract and retain quality talent, reduce employee commute, and in allowing their people to be closer to their homes. Subscription-based offerings and virtual products by leading flex providers are further enabling organizations to implement their distributed work and hub & spoke strategies successfully.

As organizations continue to tackle the uncertainty of headcount and growth, flexible solutions serve as the best resort to support scalability and mobile work culture, providing portfolio agility and flexibility in deal structures.

The 9-5 office structure is fading and we’re amidst a massive revolution that is changing the way we work. While the office continues to hold a strong relevance in building culture and work environment, flexibility provides a work-life balance, reduces travel and enhances convenience & wellness for employees. While startups were quick to adopt flex solutions for cost efficiency and flexibility, medium and large-sized organizations too are aligning themselves to meet the evolving needs of employees.