By Rob Parker, MRICS, and Liliana Stoianova, Account Manager
Solo entrepreneurs, also known as solopreneurs, are those who launch businesses based on an idea or product. Also in this group are freelancers; those who offer their skills on a contract, or temporary, basis to clients. Solopreneurs are out to maximize their earning potential, while establishing a better work-life balance. Once driven to contract work out of necessity, 60% of solopreneurs indicate that working independently is a choice.
In addition to triggering fundamental and economic shifts in the workplace, solopreneurs are also creating changes in workplace real estate.
What’s behind the solopreneur growth? Certainly millennials have contributed to the rising number of independent workers; this group of young adults require creativity and flexibility in their work. Another factor driving the solopreneur trend is technology.
Once restricted by city, state or region, solopreneurs now have the capacity to work with international clients and collaborators, thanks to the internet. Solopreneurs also benefit from the so-called “project” economy, in which they receive either one-off or ongoing assignments from large and small clients.
For their part, corporate and organizational executives rely on solopreneurs to manage fluctuating workloads, and to obtain specialized skills without investing in full-time employees. Research by McKinsey has indicated that teams made up of internal staff and/or freelancers, is becoming an efficient organizational design. McKinsey went on to note that 58% of U.S. companies indicated their plan to use temporary labor at all hierarchy levels in the future.
In one example, law firm Allen & Overy, headquartered in London, has its own flexible resourcing scheme. The company relies on contractors and full-time staff to complete tasks efficiently. “Peaks in client demand are far more variable, so we need greater flexibility,” explained Wim Dejonghe, the firm’s managing partner.
The Real Estate Impact
Most solopreneurs are off site, operating from home offices and coffee shops, as well as break-out pods, mass transit and co-working spaces. As such, dedicated desks (such as those found in flexible co-working spaces), are important to these workers.
The organizations that add contractors and independent workers to their roster could experience an increase in effective headcount, without the corresponding increase in real estate requirements or seating capacity. Organizations could also help subsidize solopreneurs’ remote spaces. Such a direct cost-for-space model is being implemented by some real estate managers across traditional office environments.
Organizations often also bring contracted workers into existing offices for better collaboration, enhanced corporate culture understanding, and more effective security management. More in-office solopreneurs mean more demand for flexible workspace, “bring-your-own-device” connectivity and access to the building.
Additionally, the ratio between permanent and flexible labor changes headcount predictions. In these scenarios, corporate real estate managers will need to adjust how they plan tenants’ future property requirements and needs.
Companies will continue adopting work practices that accurately reflect their scale of business operations. This, in turn, will necessitate the need for more flexibility and nimbleness. With the rise of solopreneurs, flexible workspace options in corporate real estate is just the tip of the iceberg.
Rob Parker, MRICS, is an Account Mananger for the Global Occupier Services team at Cushman and Wakefield.
Liliana Stoianova is an Account Manager for the EMEA Global Occupier Services team at Cushman and Wakefield.