Last month, MOM (Ministry of Manpower) released its labour market advance statistics showing a slight uptick in the number of retrenchments in the 2Q 2018 rising to 2500, from 2320 in the 1stquarter of the year, reversing the general downtrend since the last quarter of 2016.
It was also reported that although overall economy expansion has drawn more people into the workforce thus overall unemployment rate edged up from 2% to 2.1% (for Singapore citizens this is 3% to 3.1%), this expansion is not across the board and uneven across industries. The sectors shedding staff in 2ndquarter come largely from manufacturing, oil & gas, transport engineering and construction materials.
There is still structural problem in the form of mismatch between what employers are looking for and the skill sets needed to fill new job openings. As we move deeper into the digital economy over the next 10 years, we believe this gap will continue to widen as more PMEBs who are finding it hard to retrain themselves for the new jobs created will struggle to get re-employed upon retrenchment. Of this group, we expect more to take to starting new businesses.
Will this small segment of demand help to spur demand for office space for rent? Yes we think, especially for small serviced office and coworking operators.
The global explosion of demand for coworking and serviced office space in the last few years have also seen frantic expansion by many office space operators in Singapore. And this trend accelerated further this year with the arrival of global coworking space giant WeWork on our shores, who opened their first centre at beach road last Dec and has quickly scaled up to four centres within span of a year. Regus, an old hand in the traditional serviced office for rent business, has also quickly morphed into a hip and vibrant coworking operator in recent years.
Driven initially by the gig economy, coworking space has taken the world by storm and more multi-nationals are also looking at such flexible options for new markets. However, such coworking setup may or may not be suitable for all startups, especially those whose business require more privacy and where dedicated office as a sign of reliability is important to clients. The general impression still remains that a coworking environment is more suited to firms who are new and in certain industries especially the creative, marketing, sales and where work requires a great deal of collaboration.
There are of couse private room office space for rent in these global outfits from WeWork, Regus, and many others. But these private suites do not come cheap from the big boys, plus they tend to have bigger private rooms for 3-4 persons. Retrenched middle-aged professionals looking to start their own practice in their respective fields may be better off starting at a lower cost base by exploring the myriad of smaller office space operators where they might be able to offer smaller 1-2 pax private rooms. The price difference could add up to 20% savings when one factors in the overall costs including gst (from bigger operators), phone lines, call usage charges, booking fees for meeting rooms, etc.
At StartWise, we do offer what we believe is reasonably-priced 2-pax private room office space for rent, as well as dedicated desk, that comes with what all businesses really need, from free use of meeting room, free calls from a dedicated office phone line, to free display of corporate logo at the office reception.
Speak to us today to find out more and to arrange for an obligation-free viewing of premises. We look forward to welcoming you to the StartWise family.