Thursday, 22 September 2016

Flexible Employees, Flexible Space

The bank has dome some creative cost-cutting by moving staff to hot-desks
It's quite shocking to hear financial giant HSBC has decided to cut costs further by moving 300 of its staff into a hot-desk office in Causeway Bay.

These temporary office spaces are typically used by freelancers who want to do some work or having meeting space, or start-ups who aren't ready to commit to a lease yet and may be expanding too quickly to estimate how much space they need.

But HSBC is going a step further by moving its digital and transformation teams to WeWork, an American-based co-working office provider with an office in Causeway Bay.

The bank has rented more than 300 desks at WeWork, which is the largest corporate membership subscription in the Hong Kong market so far, according to Cynthia Chan, manager of office specialist Asia Pacific research at CBRE.

An idea of what WeWork looks like in Causeway Bay
"Co-working offices can provide a flexible alternative for banks looking to reduce their footprint or for short-term project space," she says.

Chan adds tenants in co-working spaces are not required to pay deposits, take out long leases, or make large capital out-lays on fit outs.

According to the WeWork membership plan, the starting price for a hot desk is HK$6,200 per month, and that includes the use of the venue for seminars, workshops or events. Children are even welcome to come in.

This compares to HK$8,170 per month per person for a traditional office space, based on a company with 300 staff in Causeway Bay and would need at least 27,000 square feet. The monthly total bill would be HK$2.45 million for a three year lease.

But with a rented co-working space, the savings work out to HK$23,640 per person annually.

That's serious penny-pinching.

HSBC isn't the only bank looking at co-working spaces, as Chan says these kinds of offices can help manage fluctuating staff numbers due to uncertainty in the economic markets.

While the bottom line probably makes the bank look good to shareholders, HSBC insists the move is not a cost-saving measure.

"As HSBC accelerates the build-up of our digital capabilities, our space in WeWork will allow our employees to collaborate in an open plan and agile working environment," says Andrew Connell, HSBC's regional head of digital, retail banking and wealth management, Asia-Pacific.

We can't help but wonder if other traditional businesses will be looking to co-working spaces as the most cost-effective way forward. But how would employees feel about working in a space that they are constantly sharing with others? Where do they keep all their stuff? In a locker? Or take everything with them all the time?

Co-working spaces takes working in a cube farm to another level.

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