The Googleplex effect

The Googleplex effect

The UK’s largest office broker tells Andrew Mernin why the penny has finally dropped for big employers when it comes to creating a workplace.

Google has a lot to answer for in the UK. Shortened attention spans, the impending death of the pub quiz and dwindling footfall in libraries can all be attributed, in a small part way at least, to the rise of search engine.

And the Californian empire has also impinged on our workspaces. When pictures first emerged from the heart of its HQ, the Googleplex, the world witnessed a land straight from the mind of Roald Dahl or the surrealist Salvador Dali. Talk of giant dinosaurs, pianos, rooftop swimming pools, chutes and meetings on the volleyball court went – as they used to say back then – viral.

From the other side of the Atlantic mostly young bosses of creative start ups took note. Staff don’t want to work in grey buildings full of grey-faced suits, they thought. They want to work in a place that’s fun, fuels creativity and even has a healthy canteen. And so 'break out’ areas, ‘down time’ and playrooms spread across the country like a YouTube cat video. At its best, companies were embracing the ‘work can be fun AND productive’ ethos of Silicon Valley. At its worst it was a few bean bags dumped in a dusty corner. But it was largely restricted to start ups born in the dotcom age.

According to the UK’s largest office broker, however, the Googleplex effect has returned, only this time its impact is being felt on much larger, older businesses. People power is what will help the giants of industry recover, their execs have realised, and making those people happy in the absence of pay rises is as important as balancing the books.

Googleplex inset 2Chris Meredith, sales director at Officebroker.com – which operates in the UK, the US, Asia, Australia and the Middle East – believes big employers have finally found the formula to keep the best talent under their roof.

“There’s one company in London which has old fashioned phone boxes where staff can go to use their mobile phone, instead of hovering around in the corridors,” he says.

“People are getting very creative in offering the day-to-day requirements that we’ve probably groaned about and put up without for a long period of time.

“What we’re seeing now is some of the traditional older companies adopting this Google culture because they know that they’ve got to bring through the next breed of young people into their business.

“This is even the case with some of the big oil companies. They are very scientific in what they do and obviously they are traditional businesses that are very set in their ways, but they have got no issue whatsoever in identifying the fact that a lot of the people that are working for them are now out of university and need to be working in a project space that’s comfortable and where they’re free to express themselves.”

Meredith and his firm’s 95-strong team primarily deal with licensed serviced offices – a sector that has become increasingly popular during the troubled economic times. Without the risks of signing into a long-term lease, with the ability to have some secretarial tasks covered and the option to grow or shrink quickly, they are a perfect fit for many firms which may have an uncertain future.

However Meredith believes that the average size of serviced office contract has gone up from ones which cater for six to 10 members of staff to those for between 50 and 100 .

“There’s been a major increase in larger corporations considering serviced offices,” he says.

Then there are the unusual requests for big offices from companies with very few staff. “We had a client who worked alone organising events in Hyde Park and his only requirement was an office with a view of the park. He ended up taking an office for 12 people.”

In terms of performance, Officebroker had a stronger 2011 than 2010 although it has made a slower start to 2012 in line with expectations. Overall though, the serviced market looks to have a brighter outlook than the more traditional leased market.

“When we had these larger banks in central London making big redundancies we suddenly had a lot of smaller independent banking brokerages setting up in the city and had quite an influx of spaces.

“Where we have seen a change within our industry is the size and shape and demand of the enquiries. Traditionally we wouldn’t have been working on winning deals towards the service market for larger corporate companies.

“For example, Deutsche Bank would previously have taken a lease space, over five to ten years for 10,000 sq ft and they would have been very comfortable in doing that. We may have always won their smaller project teams if they were putting feelers out in the Birmingham or Leeds market for a smaller 10 person space. But we are now securing those big deals.”

And, in a further sign that things make be picking up throughout the UK, the priorities of office hunters has also shifted away from purely being based on cost, Meredith says.

“We’ve got through the stage where it was always price, price, price. There was a time when companies were telling us they needed to batten down the hatches and asking whether a change of location would save them money. We went through a period of that but I think it ended mid-2010 and we then saw much more interest in what was important to the companies as far as their employees were concerned, so location became very important to them. I think there’s a much bigger focus now on the quality of the workspace for staff.

“In the UK market, London has had a relatively easy time in what have been very difficult times for businesses because the amount of foreign investment that’s clearly going into that area. We saw the average deal value there recover much quicker than anywhere else in the UK. It’s up to really decent levels now, way surpassing where we were in the recession period and we really have come out of that in London. The hope is that it circulates across the rest of the UK.”

Elsewhere Officebroker has enjoyed mixed fortunes. Freezones have helped things along in places like Dubai, while in France the three biggest cities have proved fruitful but beyond that the demand for office space in France is relatively minimal.

In the US, the regulatory difference between a lease and a licensed deal is much closer than in the UK so contracts tend to generate less income for the company, but require less intervention and manpower.

As yet the firm, which has gone from a having a six to a 95-strong workforce in 10 years, hasn’t made it to the land of the Googleplex. Although, there’s probably nothing there that it hasn’t seen before here in the UK.