Japan’s Shared Offices a Growing Cost-Saving Trend as Businesses Adapt to Teleworking

Japan Office Properties

Japan Office Space

05 Jun, 2020 –

Tokyo-based Overflow Inc.’s commercial lease was set to expire in July and founder Yuto Suzuki had made plans to move to a larger property. But as cases of the new coronavirus began to rise in March, the 34-year-old made a drastic decision: He took the startup and its 270 workers completely — and permanently — remote. Overflow operates an online financial planning service along with a job-matching platform for IT engineers. Most of Suzuki’s employees are freelancers who were already teleworking, so a physical office space made little practical and economical sense.

“Think about the millions of yen in upfront deposit and the monthly rent we would have had to pay,” says Suzuki, who now works from the company’s unofficial headquarters — his family’s apartment. “It’s safer to eliminate fixed costs, and minimize the financial and health risks.” The company is among those at the forefront of a wave of coronavirus-driven workplace reform sweeping across a nation known for an archaic corporate culture that values long office hours and face-to-face meetings.

While technology firms such as Overflow may have an inherent advantage when it comes to working remotely, the pandemic is prompting companies and employees of all stripes to adopt teleworking and flexible commutes to reduce contagion risks — accelerating the digital shift of the workspace while creating new business opportunities. “We’re seeing a process that would have taken four to five years, maybe even a decade, being rapidly implemented in the past two months,” says Suzuki, who communicates with his staff via online chat rooms and video conferencing, his tools of choice being Slack and Google Hangouts.

“Obviously, companies that rely on face-to-face contact with clients and customers for business can’t risk going remote,” he says, “but I think we’ve already seen that a lot of back office tasks and routine operations can be done at home.” How can a manager make sure people are working if they can’t see them? Suzuki has a simple answer: “The point is to measure output, not the number of hours clocked up.”

Growing acceptance

The government has been pushing teleworking for years. Not only would it ease the notoriously congested rush-hour commutes in Japan’s major urban centers, the argument goes, but it could also offer a better work-life balance and encourage more women and elderly citizens to enter the workforce.

Efforts to raise awareness have so far met limited success. According to a survey conducted by the transport ministry in October and November last year, 32.7 percent of a sample of 40,000 workers said they knew what teleworking was, up 14 percent from three years earlier. Still, the rest of the respondents said they either weren’t aware of the work arrangement or had only a vague idea of what it meant. When the COVID-19 pandemic began to pick up speed, it injected a sense of urgency into experimenting with any idea that could slow its spread, and telework emerged as a key measure to ensure employee safety and convey corporate social responsibility.

In a survey taken by The Japan Business Federation between April 14 to 17, 97.8 percent of its 406 member firms responded that they had instituted teleworking measures. That was up 29.2 percent from a previous survey taken only six weeks prior. Based on those results, the business lobby, better known as Keidanren, estimated that roughly 66 percent of employees of respondent companies had begun working from home. Train ridership has also fallen, with the number of passengers going through Tokyo station on May 18, for example, down 73 percent compared to a year earlier.

Hirokazu Yamaguchi, a manager at the corporate accounting and tax planning office of NEC Corp., began telecommuting in early April, a few days before Prime Minister Shinzo Abe declared a state of emergency that has now been lifted in most prefectures. Since February, the electronics giant had been urging some 60,000 of its workers nationwide to take advantage of teleworking and staggered work hours in order to avoid traveling on crowded trains and spreading infection. In late March, the company made it mandatory with a few exceptions that included plant and system maintenance workers. “We’ve had trial teleworking runs in the past as a team, so the infrastructure was in place,” Yamaguchi says, adding that, despite the trials, he still needed to spend some money on improving his home office setup.

“I bought two new monitors and upgraded my internet speed to 1 gigabit per second from 100 megabits — and I splurged on a Herman Miller office chair so I wouldn’t kill my back from sitting all day,” he says, referring to the American manufacturer of ergonomic furniture. Establishing a stable virtual private network connection, or VPN, was crucial for Yamaguchi, who needs access to sensitive internal data to compile corporate earnings. Once everything was up to speed, though, working from home became a relatively smooth ride.

The 40-year-old bachelor begins work at around 7:30 a.m., corresponding with co-workers using communication platform Microsoft Teams. During the day he takes a one-hour break for a stroll. He either cooks his own meals in his apartment or buys takeout meals from local restaurants. On weekends, he winds down with a bottle of Champagne, occasionally attending virtual Zoom parties with friends. “I think we need to remember that teleworking under normal circumstances wouldn’t require this level of seclusion,” he says. “There needs to be a certain amount of face-to-face communication among colleagues to establish a sense of trust, and teleworking can be difficult for those with small children,” he says. “However, the lack of commuting is attractive — I’m inclined to maintain a portion of this lifestyle even after the pandemic subsides.”

Physical obstacles

As teleworking spreads among the corporate ranks, some long-standing obstacles are being addressed. Last month, Prime Minister Shinzo Abe ordered ministries to review the practice of requiring official documents to be stamped with hanko (personal seals), an act that necessitates commuting to the office.

Businesses are also moving to eliminate unnecessary physical transactions. For example, NEC Networks & System Integration Corp., an NEC group company, announced earlier this month that it is offering U.S.-based DocuSign Inc.’s cloud-based electronic agreement platform for companies interested in paperless transactions using e-signatures. While businesses have been implementing policies, not everyone is taking advantage and remote work still remains off-limits for many. A transport ministry survey taken in March showed that only 12.6 percent of a sample of 4,325 workers were telecommuting.

“Prior to the pandemic, teleworking was being instituted in large corporations but ignored by small and midsized businesses or firms outside the big cities,” says Mika Togashi, a researcher at the Japan Telework Association. “Now that all sectors are being asked to consider the option, many companies are struggling to adapt.” Togashi says some firms have trouble learning how to use online communication tools, while others are not sure how to manage or allocate work to employees working remotely. “These companies are being asked to hit the ground running without any on-the-job training and, yes, that’s creating a lot of stress, but the pandemic is definitely a trigger,” she says. “Economically efficient business practices like online meetings and electronic signatures will eventually gain mass acceptance.”

Avoiding rush hour

People working in occupations requiring their physical presence, including those in the service industry and blue-collar workers, don’t have the luxury to stay home like their white-collar counterparts. Still, many of them are trying to avoid public transit to be safe, and choosing to bike or walk to work instead, a trend that could be here to stay. Yasuyuki Uchida, a 55-year-old sewer maintenance and repair engineer, jogs a total of 10 kilometers commuting to and from his company’s headquarters in northern Tokyo. From there, he is dispatched to various sites.

A veteran trail runner who has participated in overseas competitions, Uchida says he decided to use his daily commute during the capital’s state of emergency to practice the Maffetone method, a training style that focuses on aerobic running developed by Phillip Maffetone, a kinesiologist and athletic coach. “My sports gym is closed and trail running events have been canceled this year,” Uchida says. “To stay in shape, I’ve been working out at home and running to work. I’ve never felt better. I’m going to stick with this routine for a while, as it takes at least three months for results of the method to show.”

Uchida points out that stay-at-home requests appear to have boosted sales of certain physical fitness-related items. “Dumbbells and jump ropes are hard to get now,” he says. Indeed, sales of weight-training equipment and home fitness goods such as yoga mats and stretch balls have reportedly soared while most gyms and fitness centers have been closed to prevent the spread of COVID-19. Bicycles are also in demand as commuters are reluctant to take public transportation, according to Masanori Hashimoto, general manager of Tokyobike, a bicycle brand headquartered in Taito Ward.

“There was a rush on orders in late March and April from people wanting to purchase our bicycles for commuting,” Hashimoto says. “Now the trend has shifted to children’s bikes, for kids to exercise while schools are closed.” Hashimoto says the current situation reminds him of the 2011 Great East Japan Earthquake when the world’s busiest rail system shut down and Tokyoites flocked to bicycle stores. “We plan on boosting production as we expect to see more customers once the state of emergency is lifted and stay-at-home requests are eased,” he says. “Major European and American bicycle makers are seeing the pandemic as an opportunity. For Japan to ride on that wave requires improving its cycling infrastructure, which is currently lagging behind cities like London.”

Home comfort

The freedom to work remotely is also impacting ways people think about real estate. Public broadcaster NHK has reported a spike in cancellations of office leases in central Tokyo as corporations downsize workspaces and opt for more flexible options such as shared offices to cut costs. In March, Nippon Steel Kowa Real Estate Co. began selling contracts for a new residential apartment complex that is being constructed in Kachidoki, a bayside area in central Tokyo. The company is collaborating with furniture maker Okamura Corp. and furniture rental startup Subsclife Inc. to create a shared workspace for inhabitants. After six years, the workspace will be refurbished to reflect the newest office trends.

“I believe this concept of ‘updating’ a residential workspace is new in the industry,” says Hiroaki Wada, the project’s organizer. Wada says that a survey Nippon Steel Kowa Real Estate conducted with Okamura on workplace environments for single-person households revealed that, among telecommuters, there was strong demand for a so-called third place. That’s a space outside home and office where an individual can work. “For ¥500 a month, residents can have access to a workspace in their apartment building equipped with Wi-Fi, a coffee machine and high-quality office furniture,” Wada says.

And since furniture is susceptible to wear and tear, and technology and personal tastes change over time, the shared office will eventually receive a makeover with furniture provided by Subsclife, which currently offers around 100,000 types of furniture from 400 brands for monthly rentals. “We’ve been doing a lot of business with large corporations that want to provide rental furniture for their employees working from home,” says Ken Machino, the founder of Subsclife. “Foreign firms are also subscribing to our service to improve cash flow. I think the trend to rent, rather than own, is going to accelerate as a result of the pandemic.”

As teleworking takes root, it may fundamentally alter how the Japanese perceive workspaces, Machino adds. The physical office may become a place to encourage communication and teamwork building, rather than a place to sit down and clock up hours. “The workplace is being redefined,” Machino says.

(Source – The Japan Times, Pic – Japan Co-Working Space / “Rama Mamuaya“)

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