As we enter a new decade, companies are looking for new and innovative ways to attract the young, motivated talent into their workspace. The era of the copycat office booths, fluorescent lighting and draconian lease lengths seem relegated to the distant past. In its place has come the ultra-high-tech workspace inspiring collaboration and productivity.
Providing a healthy and collaborative working environment is a key focus for employers, and as the new generation enter the workforce, landlords and occupiers will be creating new ways in which to attract and retain young talent. But it is not only the young Gen Zs who landlords and operators should be targeting; the industry has, perhaps, been focused on the Baby Boomers and Millennials who dominate newspaper columns, but the potential of the often-overlooked Generation X is vast.
Who are Gen X and why are they so important now?
A lot has been written about the impact Baby Boomers and Millennials have on the workforce and the economy in general, whereas Generation X appears to be the ‘middle child’ of the workforce. Baby Boomers – those born between 1946 and 1964 – have largely retired or are coming into retirement, however the oldest Generation X workers still have at least ten working years left before they consider retirement with the youngest of this generation looking at 30+ years in the workplace.
How to cope with an ageing population and the tax imbalance that comes with it has long been at the forefront of policymakers’ decision making. Over the last year, British employment growth has been fuelled by over-50s - particularly women - according to data from the Office of National Statistics. Office-based employment in the UK has risen by almost 19% since 2010 and the rate for the over 65s has risen to from 8.6% to 10.9% over the past 10 years. The number of people aged 65+ who are choosing to delay their retirement do so not only for financial reasons, but due to job satisfaction, favourable working conditions and the stimulating and sociable work environment. Based on these numbers, if employment growth continues at its current rate, Instant forecasts an additional 10,100 flexible offices will be needed across the UK by 2030 to absorb demand from the over 50s alone.
Unlike the asset rich Baby Boomers, Gen X and Millennials have suffered from increasing living costs and a squeeze on wages which means more people than ever before will be working well into their 60s and 70s. Insurance giant Aviva reported that that almost two-thirds of over-50s in work were planning to retire later than they expected to a decade ago.
The potential for Flex to capture Gen X
The over 50s currently account for 32% of the total UK earnings and this is expected to increase to 40% by 2040 and if companies are able to maximise the economic power of older workers, this would help sustain economic growth and could add an extra 2% to UK GDP by 2040. The Default Retirement Age was abolished in 2011 with the state pension age currently set to rise to 68 by 2037. However, if workers retire before they are ready to do so because of an unfavourable office space and working environment, this leads to an avoidable economic burden, not to mention the social and economic detriment of overlooking the experience and leadership potential of this generation.
In recent years, the image of the flex office occupier has changed from the young start-up to the global occupier acquiring space to complement their existing office space. Millennials and Gen Z account for the 62% of flex take-up compared to 33% of Gen X, yet we expect the share of Gen X occupiers to surpass the 50% in the next 10 years as more companies adopt the flex model to cope with business expansion.
The flex model is built around an easy, sociable environment in which to work, but also the array of workspace options available. Flex office space will give workers the option to work in a sociable office closer to home, thus cutting commuting time and potentially cutting one stressful aspect of working life. Furthermore, the number of Gen X employees choosing to work part time will increase according to the International Longevity Centre (ILC). Flexible offices will help complement this growing demographic as they will give home workers the option to embrace the sociable and stimulating office environment, while giving those who need a physical workspace a greater choice of locations and services.
The flex industry has benefitted from the image of the young entrepreneur being able to work out of the high-tech workspace in any global location. Yet it is not Millennials who are leading the startup scene, the average age of an entrepreneur in 40 years old, according to World Economic Forum. Gen X startups are used to a fast-paced working environment will embrace the flex office model as they are no longer willing to wait for office contracts and fit-outs to be negotiated, but are looking for a fast turnover of finding a space, moving in and developing their business without any delays.
What does technology and social media mean for them?
The Millennial generation, while being arguably one of the most tech-savvy and adaptable of the generations, does not hold the same household wealth and spending power as the Baby Boomers and Generation X (damn you avocados!). Generation X, largely thanks to greater experience and capital, are more likely to start their own business and currently the over 50s account for 43% of all startups across the UK. London in particular will benefit from the number of Gen X startups where there are currently 24 startups for every 1,000 citizens in the capital. Operators should not target their spaces towards one generation as they risk alienating potential long-term occupiers.
The lines between what Gen X and Millennials want from their workspace have become increasingly blurred. The full-serviced, tech space is often associated with the tech-savvy Millennials who entered the workforce already accustomed to wireless technology. Yet Gen X is the last generation who remember a time before the Internet became intertwined in our working lives. They entered the workforce at a time when new technologies were taking off, so have become as accustomed to the high-tech office space and have proven to be as adaptable as the younger generations. Baby Boomers and Gen X are also recording increasing usage of social media while Millennials and Gen Z are limiting their online connectivity, therefore flex space providers do not need to alter their marketing to include an older demographic.
According to the World Economic Forum, approximately 24% of people use social media to network for work and flex providers must be able to show the benefits of having a ready-to-use workspace which will allow tenants to embrace the sociable and entrepreneurial environment.
Online connectivity has been embraced by the Baby Boomers and Gen X both at home and in their workspace as shown by the purchase rate of devices such as Amazon Echo and Google Home, again debunking the myth that tech should be targeted towards the younger generations.
Where to target Gen X clients?
Flex office providers should target potential end-users from emerging markets such as Latin America and APAC as these markets are showing the largest uptake of multi-networking. Barriers preventing people working include unappealing and inaccessible workspaces as well as inflexible working hours, yet the flex industry’s concept is based around connectivity and creating a sociable environment in which to work. If the flex industry is able to cater their spaces across multiple locations and generations, this could add an extra 3-5 years to an employee’s working life. Since it will be a while before Gen X don their slippers and start handing out Werther’s Originals, the flex industry must maximise its appeal to this generation.
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