Mark Dixon, IWG Global Founder & CEO joins the Yahoo Finance Live panel to discuss IWG launching a new office retail concept to meet surging demand for hybrid workforce.
- As we approach this almost a year of dealing with the pandemic, increasingly we're hearing from a lot of employees out there dealing with this return to the office and importantly a flex in terms of the hybrid option, working from home virtually commuting, as well as going into flexible work spaces. And for more on that, I want to bring in our next guest who is launching an interesting new piece of that in Napa Valley, a 21,000 square foot facility coming, from our next guest here, IWG Global Founder and CEO, Mark Dixon, joins us now.
And you guys are launching this new kind of flexible work face-- workforce opportunity here to give people the option of going in locally to one of these work spaces. And we're hearing it from a lot of people, kind of having that option makes life easier, especially in these times. So talk to me about what you're seeing from employers that want to do this and how you're building out of that side of your business.
MARK DIXON: Well, look it's absolutely the future. I mean, the world of work's never going to be the same again. And COVID-19, the whole pandemic has proved that you can work productively without coming into the office every day. So the majority of companies, large and small, today are looking to embrace a workplace that is somewhat in a head office or a branch office, somewhat with people working at home or close to home.
So with that in mind, you know, we are servicing a need which we've seen grow during the past-- past 12 months with more and more people wanting to find a place to work this close to where they live. And very much in demand, we've seen a lot of surveys been done showing that companies that don't offer a flexible workplace, i.e. the ability to work from home, close to home, or to come into an office, a head office, will not perhaps get the right talent in the future.
So it's something, you know, work is going to change. Technology changed it a long time ago. In the last 12 months, everyone has-- has-- has worked that way. And that's what the future will continue to be.
- It feels like there's been two tracks that have contributed to the growth of the flexible workspace. One is that we've seen the bigger companies that no longer operate out of a headquarters be able to rent out multiple spots in different cities, so at least their employees can congregate in one spot.
And then you've got sort of the smaller companies who no longer want to commit to a long--term lease because the future is so uncertain. What are you seeing in terms of those commitments? And what does that tell you ultimately about how things have fundamentally shifted in the way we work?
MARK DIXON: Well, I mean, it's just this year has been amazing in terms of what we've seen. To sort of prove the point that everything has changed, we've we signed up more than 200,000 members in the first couple of months of this year. And we've got a pipeline of another half a million.
These are large companies in particular that are moving to a more flexible workplace, because it's what-- it's what's best for their company, it's what's best for the workers that work for that company. So very, very big pick up in the past few months. And I think this is because companies have been working on the strategy last year and they're looking forward to a future that is more flexible. And, you know, the opening today, and I one of many, the sort of underpin our belief in that movement in the future, more local work.
- Yeah. The hub and spoke model is interesting, and obviously perhaps no surprise to be focusing in on the Bay Area and Silicon Valley and where you know people could be shopping their commute times maybe in half with this new location. But when we talk about that, right, there's two things there. There's the COVID risk. And I can understand that, you know, that's probably a big push of maybe why people enjoy working at home.
But when you talk about commute times and that side of the business, it seems like the health risks might be similar of going in to any office, depending on how many people are actually in that building. But talk to me about maybe that convenience factor of not having to travel as far, and what this maybe brings to the table in the hybrid model of if you do have to go to the office, you know, you travel a shorter distance.
MARK DIXON: Yeah. And that's what it is-- is just convenience. I mean, no one-- it's very hard to find people that like commuting. You know, it's a waste of time. It costs money. It's very inefficient. And so if you can avoid the commuting-- and what's happened in the past year is people have learned how to use technology that allows people to work just as effectively, but without being all in the same building and being forced to all come to one place every day.
So hybrid working is about working locally some of the time, coming into the head office for much more curated events where you-- you understand what the company is doing. There's a sign up over the door and so on. So image being very important. And that-- the adoption of this will be-- has been dramatic. And it's going to grow fast in the future. You know, the key driver, apart from it being great for people is for companies, it's much more cost effective.
And you mentioned, small companies looking to save costs to be more flexible. But large companies are looking to do the same thing. They're looking to get variable costs, not fixed costs, and lower costs overall. Hybrid working allows that.
- Mark, what does that mean from a business standpoint in terms of how IWG builds on its growth beyond these work spaces that we've been talking about? We've seen a number of companies, like WeWork, for example, expand their software offerings to be able to work with HRs of individual companies on efficiencies within the business. What are you seeing in terms of opportunities right now on how to expand your business and the offerings that you have right now?
MARK DIXON: Well, that's a really good point. Look we-- we do all of that software already. We've been in the business for 30 years. And a big part of our business is the read the software platform that allows large numbers of people-- and our biggest customers have more than 100,000 people with us-- to be able to manage across the platform. So we've invested a lot in the technology that enables that to be a much smoother experience.
But we're also starting looking forward to package up the prop into services that we can sell to corporations in their own offices because they want the same flexibility in their own offices that we provide across our 3 and 1/2 thousand buildings in 120 countries. They want that in their own building.
- Yeah, Mark, lastly, for me, I mean, you guys also took an interesting majority stake in The Wing that was backed by WeWork and they really focused in on-- on a female-focused businesses. I wonder how much niche playing in this space is going to be important when you're trying to attract a specific type of business to these offices. What was kind of the impetus behind that deal, and maybe the branding that comes with it?
MARK DIXON: Well, we already have eight different brands. And they're all targeted at price points and different types of workers. And we think The Wing, fantastic brand focused a certain group of people in the workforce currently underserved globally. So our objective here is to roll this out into a global platform, and create a much bigger version of The Wing servicing more people on a worldwide basis. So we're very excited about this-- this brand and working with the team there.
- Mark Dixon, IWG Global Founder and CEO, it's great to talk to you today. Appreciate your time.