So long, Cube Farmer: Telecommuting, Co-working and the End of the Office

More and more of the office space that remains is now open, with workers taking their places not at an assigned desk but Starbucks-style, wherever they find a comfortable spot
Image: MikeDotta / Shutterstock.com

Part 1: So long, Cube Farmer
Since 2010, the average amount of office space per worker in North America has fallen to roughly 1.75 square meters from 2 square meters, according to CoreNet Global, a corporate real estate trade association, and some experts believe this is only the beginning.

“I don’t see any end to it at all until we’re probably at a third less space per person than we are today,” says Norman G. Miller, Ernest W. Hahn Chair and Professor of Real Estate Finance at the University of San Diego.

More and more of the office space that remains is now open, with workers taking their places not at an assigned desk but Starbucks-style, wherever they find a comfortable spot.

“The change in the workplace is a result of the change in the nature of work—how we do what we do,” explains Adam Stoltz, Senior Vice President of Consulting Services for Transwestern, a commercial real estate advisory firm based in New York.

Several factors have driven this shift, experts say.

Portable computing and communications and the growth of low-cost cloud computing have reduced the need for fixed workspaces. At the same time, offices used to involve wider ranges of skill levels. Today, more and more administrative work is being either automated or outsourced to cheaper markets, reducing the need for the in-house typing pools and IT services that once took up a lot of room.

Between 2001 and 2013, the number of secretaries in the United Kingdom fell by 47 percent or 163,000 jobs, according to one Oxford study. In the European Union generally, the numbers of office clerks (including secretaries) fell by about 7% between 2008 and 2013, according to a 2014 report. EU analysts projected then that those numbers will decline more than 20% by 2025.

In addition, more and more corporate work revolves around projects. The numbers of people involved and the kinds of expertise required shift constantly now, creating a greater need for flexible space, says Stoltz.

The form of the office has always evolved with the changing nature of work. The first major Western office is generally reputed to be the East India House in London, built in 1729 to administer Britain’s Indian possessions. For smaller concerns, business tended to be done in much the same way many of London’s self-employed do today—at home or in a coffee house. Later, other large-scale enterprises such as banks and railways needed even more management, and the office changed with it.

By the early 20th century, the office had evolved into a very efficient administrative machine. At theLarkin Administrative Building, the headquarters of Larkin Soap in Buffalo, NY, workers had so little need of moving that architect Frank Lloyd Wright specified that the chairs be bolted to the floor. “Nobody had any reason to move from their seat,” Stoltz explains.

As the century wore on, designs became more flexible, but the rise of the PC in the 1980s nailed workers down again. “All of a sudden, this 50-pound machine needs a home,” Stoltz says, a fact that tethered workers to their cubicle.

The cube farms made sense for computers, but they didn’t do much for workers. “Those workplaces were not solutions for what we did. They were solutions for how equipment needed to be housed,” Stoltz says.

Now the technology has advanced to the point that many knowledge workers are again mobile. Many workers are taking advantage of the technology to work outside the office. In 1995, only 9% of US workers told Gallup pollsters that they had ever telecommuted. By a 2015 survey, 37% had. As of 2015,people who said they telecommuted took advantage of the option an average of six days a month.

Economically, there’s a lot to be said for telecommuting. In the US alone, if everyone who could telecommute did so just half the time, employers would save about $11,000 per worker and the worker would save $2000 – $7000 per year on top of that, according to Global Workplace Analytics, a Carlsbad, Cal., research and consulting firm.

Many facilities managers have realized that because they no longer had a business need to give employees an assigned spot, they could save money by “hoteling” the office, replacing permanent assigned seats and offices with common spaces.

Other trends have added further pressure on office sizes. First, cities are back in style among young professionals. This has meant that the premium for residential space has grown so great in some cities that developers in some markets, such as London, have found it can be profitable to convert older office buildings—to apartments.

At the same time, a number of big companies have followed young professionals downtown, hoping that a stroll to a loft office around the corner will be an easier sell than the 8:23 to Poughkeepsie.

Miller is not so sure that this latter trend will last, however, at least in the US Schools tend to be better in the suburbs, he says, and as these young professionals start raising families, they may rethink their priorities. However, he is convinced that the open-plan office is here to stay.

For the self-employed and the telecommuter alike, new kinds of workplaces are taking root as well. Starbucks and other coffee houses have become both a home away from home and an office away from the office for many. A more dedicated boss-less office space is also becoming increasingly popular: the co-working space. In exchange for a monthly fee, workers can share space with associates or strangers. Some spaces focus on serving a particular sector or even people who share a non-work related interest, such as hiking. By the end of 2017, one forecast estimates, 14,000 co-working spaces will be open worldwide, and 1.2 million people will have worked in one at some time or other. Of the co-working landlords surveyed, two out of three anticipate expanding their floor space this year.

“I think we’ve underestimated the importance of the physical presence of others in our work,” says Michael Pratt, the O’Connor Family Professor of Management and Organization at Boston College. “My sense is that [co-working spaces] are going to continue to grow.”

[This article has been reproduced with permission from CKGSB Knowledge, the online research journal of the Cheung Kong Graduate School of Business (CKGSB), China's leading independent business school. For more articles on China business strategy, please visit CKGSB Knowledge.]