Economic headwinds: Big firms adopt small business mentality to cut costs

With Australian businesses increasingly under pressure to increase productivity, cut costs and drive growth in the face of economic hardships, many are adopting a ‘small business’ mindset to survive and thrive. More than ever, office scalability and flexibility is now the core focus of many businesses wanting to achieve efficiencies, grow sales and increase profitability.

Large businesses are now urgently adopting a small business mindset to cut costs. One of the key areas of focus involves reducing fixed costs including cutting down on their physical office footprint. This is a trend we are seeing all over the world as well as in Australia.

Prior to COVID, many businesses operating in our premium managed sites comprised mostly startups and SMEs. Today, this makeup of businesses is changing fast. Over 50% of our clients are now large business and government and this number is continuing to rise.

What strategies are large firms employing to cut costs?

Large firms are realising the cost savings and operating efficiencies that can be achieved moving their operations out of expensive rigid long-term fixed-lease sites and into flexible managed offices spaces. They are also appreciating the value and benefits of business hub environments where resources like kitchens, meeting rooms and other facilities are shared.

Serviced or managed office environments have evolved over the last few years becoming innovative thriving business ecosystems where many market leaders now locate their offices.

Smaller footprint

Firms are embracing hybrid workplace arrangements which means that a large percentage of their workforce is able to work from home. As a result, businesses have less need for such large office footprints. They are moving into smaller environments such as managed office spaces where they only have to pay for the space they use. Thus eliminating idle floor space like unused meeting rooms and empty work desks, and removing unnecessary costs.

Flexible office space

Many Australian businesses are also still reviewing and readjusting their operating and floor space needs after the pandemic. And as a result, they have identified that they no longer want to be locked into long-term expensive office spaces. In saying this, they don’t want to move from large fixed-cost sites to smaller fixed-cost sites because they don’t want to have to bear the cost of another fitout or the risks associated with another long term lease.

They would rather operate out of flexible managed offices where they don’t have to pay for fitouts and they can increase or reduce their office space needs easily without too much effort or expense. Managed offices already come with office furniture, wall art, phones and IT support which means businesses can literally walk in, sit down and start working.

Unused resources

Most large Australian businesses are carrying significant idle capacity in their fixed-cost floor plans such as meeting rooms, board rooms, reception areas, kitchen areas and other spaces incorporated into their floor plan. That’s down to the fact that their staff are working from home, these facilities are not being used and are sitting idle for long periods of time.

This is why large businesses are moving into flexible managed office space, so they only have to pay for the space they use and still have access to shared spaces whenever they need. At Figari, the spaces are provided at no extra charge across all of our flexible office work sites.

Managed support

In addition to the cost savings, firms operating in flexible workspaces are also able to access managed IT support at significantly lower prices. Figari’s IT division offers clients IT support on an organisational or individual level. The costs start from as little as $3 per day per person.

Again, the benefits of shared services means that Australian organisations are now able to access and benefit from facilities and services where the costs are reduced due to the shared nature of the services across all our sites. Our IT support is delivered on site and remotely. There is no travel time and no booking fees. The services are available at any time.

Chris Butt is the co-founder and global CEO of the Figari Group.

Chris Butt, co-founder and global CEO of the Figari Group