Guest Post by John Arenas, Founder, Chairman & CEO of Serendipity Labs, Inc.

Work has quickly and permanently become untethered from dependence on traditional office facilities with the aid of collaboration technologies, AI-driven automation, and augmented reality experiences. New networks of highly hosted flexible office facilities also offer workplaces on-demand that serve as outsourced real estate, helping to unlock the full potential of a workforce and making companies more competitive.

With the technological innovations of the past 10 years, physical work and repetitive, predictable, skills-based work activities are now being automated and done in the cloud, with no dependency on the physical world whatsoever. Office work that once required people to work in rows of desks in departments, with close proximity to the next step in the physical workflows of documents, no longer exists. McKinsey estimates that 60% of current jobs are 30% automatable: from underwriting insurance, to drafting legal briefs, to making medical diagnoses. That has huge implications on our connection to physical space, especially the need for office space.

Technology has given us the power to collaborate and meet in ways that no longer require a physical presence and can increase the opportunity to communicate, share and manage workflows. New cloud-based workplace experiences are also competing with the traditional office. Workplace experiences in the metaverse, including simulated and augmented reality environments can put workers on an emulated or imagined campus, meeting room or convention hall to interact with colleagues or customers to meet for a virtual drink or cup of coffee.

The move toward automation of office jobs, better remote collaboration tools and new augmented virtual office experiences mean the workforce will need less- and differently designed physical space. There’s no going back.

It’s a Meta-Trend

For those who anticipate a return to the past, it is important to recognize that the pandemic was not the starting point for the drop in demand for office space. With the exception of fast-moving technology behemoths, companies have been signing and renewing office leases on shorter terms and with less space, contracting an average of 30% to match falling traditional office space utilization. The number of new office lease transactions under 10,000sf in the top 12 US markets fell 39% from 2016 to 2019 as companies moved to flexible workplace strategies. The wholesale abandonment of office space during the pandemic accelerated adoption of new ways of working and spawned new expectations by the workforce.

We are now on an unalterable course toward the disassociation of work with a physical place. That means we will need different kinds of places to work – workplaces that serve more focused purposes when we do choose to meet in person. Work requires a continuum of settings and locations, places to learn, inspire, network, collaborate and, yes, create and focus. Essentially, the workplace is becoming a network of places, a platform of settings and locations that we can traverse and match to the activity or goal – a network of workplaces that includes headquarters, satellite offices, meeting venues, home, digital and virtual/augmented reality work settings. With workplace services now being consumed on demand like computing services; the future is a workplace cloud for facilities services augmenting a smaller footprint of fixed real estate assets.

This workplace cloud approach frees up capital from lease liabilities and real estate asset ownership. It completely aligns business plans with workplace resources. There’s no more guessing (or cost of being wrong) about future space requirements. In addition to liberating its workforce to traverse a set of workplaces, this approach frees companies to locate outside of expensive urban markets, with smaller space requirements, designed to support collaboration and personal connection.

As CEO of an international outsourced workplace company operating in 30 markets across the US and UK, I have been working with companies for over 10 years to add agility and flexibility to their workplace strategy. This always includes tactical one-off needs like market rollouts, overflow, and regional team support. However, we are now serving multinational companies across all industries as they execute on major strategic real estate initiatives to support a remote workforce, quit traditional office leases and focus on their broader initiatives like retaining top talent, lowering costs and outsourcing their real estate, not just their real estate management. These initiatives also enable a lighter, lower-cost, hub and spoke real estate footprint.

ESG and the Workplace Cloud

A workplace-cloud-driven strategy also allows companies to attract the best talent regardless of geography, including those who wish to balance family responsibilities and remain in the workforce. A mainstream policy of workplace flexibility provides more equal access, and peer equity, both of which promote workforce diversity. As a Latino CEO, I am particularly attuned to the value of drawing a workforce from new networks, cultural backgrounds, and perspectives.

The workplace cloud strategy can also lower environmental impact, generating fewer and shorter commutes and less energy consumption from office buildings. With a rich set of choices about where and how to work, employees can have agency over their workplace decisions. Knowledge worker autonomy can be more than a matter of choosing which days to work in the office – it’s can be about the degree to which people influence outcomes about their own lives. It’s bigger than workplace, it can be about people being able to unlock their full potential and how employers invest to enable and support employee agency while benefitting all their stakeholders. Welcome to the workplace cloud and the future of work.

John Arenas is Founder, Chairman & CEO of Serendipity Labs, Inc.