[Interview] "There Is No Seat for Me at the Company"... Companies Introducing the 'Jayeol Jwaseokje' System

Cushman & Wakefield Director Lee Jae-hong Team Interview
Remote Work Increases Due to COVID-19, Spotlight on Flexible Seating
Reducing Personal Desks and Executive Rooms, Expanding Shared Spaces
Foreign Pharmaceutical Company Cuts Rent from 900 to 600 Pyeong
Especially Suitable for Startups... Shared Offices Also Popular

From the left, Jaehong Lee, Director of Cushman & Wakefield Korea; Minjung Ryu, Deputy General Manager; Yujin Song, Deputy General Manager; Donghyun Moon, General Manager (Photo by Cushman & Wakefield Korea)

"Creating identical individual desks in a company is not necessarily efficient. Some people concentrate better working in a cafe with music, while others prefer a private space like a study room. The flexible seating system acknowledges individual differences, enhancing work productivity and office operation efficiency."

Lee Jae-hong, director at Cushman & Wakefield Korea (hereafter Cushman), a global real estate consulting firm, summarized the emerging corporate office work environment in the post-COVID era in an interview with Asia Economy on the 15th. The 'Project & Development Services' team led by Director Lee consults on the overall process when tenants look for offices, including area, composition, design, and change management.

Director Lee explained that the flexible seating system, based on the concept of 'Activity Based Working' where employees choose their workspace daily instead of the traditional office structure with one-on-one personal workspaces, is becoming a trend. This is a somewhat provocative idea, far removed from the classic corporate office where employees have fixed desks and executives have private rooms.

However, as remote work increased due to COVID-19, leading to more vacant desks in offices and the perception that this is inefficient, interest in flexible seating systems has grown not only overseas but also domestically. Instead of maintaining individual desks, the leftover space is utilized as work cafes or business spaces needed by the company, also reducing expensive office costs. In Korea, companies like SK and AK Plaza are expanding the application of this system.

This flexible seating system is especially suitable for fast-growing companies such as startups. Pangyo, known for its many startups, is a prime example. Because companies can rapidly expand in a short period, a scalable work environment is essential. For the same reason, demand for mobile shared offices is also increasing. Director Lee said, "Offices located in key areas like Pangyo have almost no vacancies."

Below is a Q&A with Cushman’s 'Project & Development Services' team (Director Lee Jae-hong, Manager Moon Dong-hyun, Deputy Manager Song Yoo-jin, Deputy Manager Yoo Min-jung) regarding changes in the office market in the post-COVID era.

- Nearly two years have passed since the outbreak of COVID-19. Have the types of offices desired by tenants and investors changed?

▲ They have changed a lot. With the increase in remote work due to COVID-19, there has been much discussion domestically and internationally about how this affects work efficiency. Recently, optimizing space by reducing the number of desks inside the company and increasing shared workspaces through the 'flexible seating system' has become a popular trend.

- What is the flexible seating system?

▲ Traditionally, companies have personal desks for individual work and meeting rooms for group discussions. However, most companies only occupy about 60-70% of their desks regularly because employees are out for business trips, remote work, or vacations. The flexible seating system removes personal desks and executive rooms, increasing shared workspaces to improve office efficiency. This has been a trend overseas for the past decade.

- Does the increase in remote work reduce the need for offices themselves?

▲ Some argue that remote work is not better in terms of work efficiency. Although it was thought that work could be done via video conferencing, actual efficiency is often low. Remote work can reduce employees' sense of belonging, and many recognize that spontaneous conversations at the office lead to new ideas that translate into sales. As a result, both domestically and internationally, there is a growing trend of returning to the office.

- What are the advantages of the flexible seating system?

▲ By removing personal desks and executive rooms, space is freed up to add other business-related facilities. Also, creating identical personal desks does not yield the same efficiency. Flexible seating acknowledges individual differences to boost productivity. Nowadays, work is not structured as a team leader sitting next to you giving immediate instructions. Teams work on projects and communicate via platforms like KakaoTalk, making flexible seating more suitable.

- Are there any examples of its application?

▲ A foreign pharmaceutical company in Korea used about 900 pyeong (approx. 2,976 sqm) of office space but recently adopted the flexible seating system and reduced the area to 600 pyeong (approx. 1,984 sqm). Previously, about 30 out of 150 employees, including executives, had private rooms, but these were all removed, and desks were reduced while expanding cafes and meeting rooms accessible to all employees. The office area was reduced to two-thirds, cutting rent costs, which were then invested in employee welfare. A survey conducted three months after restructuring showed satisfaction scores rose from the 3-point range to 8 out of 10.

AK Plaza Headquarters Smart Office (Photo by AK Plaza).

- Are there negative opinions about the flexible seating system?

▲ Surprisingly, people in their 20s tend to be somewhat negative. Having started working and coming to the office but not having a fixed desk can reduce their sense of belonging. Since they lack social experience, they want advice from seniors, which can be lacking in a flexible seating system. However, those in their 30s and 40s, with more experience, are generally satisfied as they are less concerned about remote work, commuting, or seating.

- Are there industries more suitable for the flexible seating system?

▲ It is especially suitable for fast-growing companies like startups. Pangyo, with many startups, is a good example. On the other hand, traditional industries like finance or manufacturing, or companies requiring security or technical considerations, are better suited to assigned seating systems.

- Is there a trend toward increasing in-house welfare facilities as office structures change?

▲ Recently, companies are actually reducing in-house welfare facilities. The introduction of the 52-hour workweek has created an atmosphere to minimize time spent at the office. As usage rates of welfare spaces like fitness centers and cafeterias decline, companies tend to remove them except for rest areas. Most companies are located in well-equipped urban areas where it is better to use surrounding commercial facilities. There is also a growing perception that saving costs on welfare facilities and investing more in employees is more efficient.

Hanwha Investment & Securities employees are working in the new smart office. (Photo by Hanwha Investment & Securities)

- Is the trend of reducing welfare facilities also seen overseas?

▲ Yes. Similarly, using nearby infrastructure is seen as more efficient. While some large companies like Google’s headquarters in the U.S. are famous for having large welfare facilities, they are exceptions. Silicon Valley lacks nearby commercial areas or infrastructure, so they provide various welfare facilities to reduce employees’ travel time, but this is not a general trend.

- What is the outlook for shared offices in Korea?

▲ The shared office market is expected to grow further. As startups grow in size, demand to move into shared offices in key areas is increasing. Currently, office buildings in major areas have almost no vacancies. Moreover, many landlords are reluctant to sign long-term leases of 5 to 10 years because startups lack a solid foundation. From the startups’ perspective, shared offices better suit their fast-growing nature.

- Are more companies securing satellite offices?

▲ Yes. The establishment of flexible seating systems has made it easier to operate satellite offices. With a decrease in large office supply, it is difficult for large companies to accommodate all employees in one headquarters. Therefore, many companies rent several smaller offices and have employees work dispersedly. With technological advances making remote collaboration easier, the satellite office market is expected to expand further.