By Noam Livnat
Chief Product & Innovation Officer
Coworking spaces are exploding as some of the world’s biggest companies adapt to the gig economy and demand for flexible work arrangements. Why? There’s no single concrete reason, other than a perfect harmony of variables that make coworking a natural solution to space needs. Better still, it’s a solution benefitting both companies and workers.
But the question remains, what makes coworking a better solution than open or flexible office environments? Read more on what is coworking – a look into the future.
1. Low-cost workspaces amidst rising CRE costs
Commercial real estate costs are rising. This has rippling effects on businesses renting office space, even beyond driving up the cost of their monthly lease payment. It makes finding affordable workspaces harder, increases pricing power for leasing companies, and adds a hefty burden to a company’s balance sheet, according to 2016 FASB accounting standards.
Renting coworking space absolves a business of these costs. Every company deploying the space-as-a-service model assumes the greater burden of leasing real estate. They then pass the cost onto companies in the form of pay-as-you-go fees. In shedding office space and renting through a coworking company, a business can indirectly alleviate its second-largest expense: the workplace.
Even if coworking membership costs are equal to the cost of a lease, it still gives the company the ability to scale space as-needed. There’s a modicum of control over how much space they need and what they’re paying to occupy it—control not always possible with a standard lease.
2. Support for a non-traditional workforce
Today’s workforce operates outside the bonds of what was a traditional schedule. Nine-to-five jobs are scarcer, while business suits are giving way to t-shirts and jeans. It’s only natural that a less-traditional work environment would follow.
Employees want the freedom to work on their own time, in an environment of their choosing. And while an agile office may provide this, it still doesn’t support the intrepid schedule of most Millennials and Gen-Z workers. They have kids, jobs, and other obligations, Their primary demand is a manageable work-life balance. Coworking gives them the flexibility they want, and they reward that flexibility through efficiency, transparency, and productivity.
With a coworking subscription, giggers and remote employees are free to travel and plan their days around themselves. Work is still a priority, but it’s less of a constraint.
3. Getting rid of workplace stigmas
Stigmas of the traditional office model still linger. Managers peer over the shoulders of subordinates as a project deadline looms. Employees feel guilty for congregating around the water cooler. Chatty coworkers suck away much-needed work time.
These stigmas disappear when the central workplace does. What’s left is the framework of an office, free to operate without friction. Employees get out from under the thumb of managers, while still adhering to deadlines. Coworkers take breaks to relieve stress without the guilt. The autonomy workers need to stay productive blossoms. A coworking space offers these things in a laid-back, independent workplace setting.
4. Space for every worker
Even in offices with diverse workspaces, it’s nearly impossible to accommodate every work style. Dedicating space to individuals vs. groups, introverts vs. extroverts, and employees with non-traditional work schedules stretches available square footage thin. The beauty of coworking spaces is their diversity.
The popularity of coworking spaces is creating stiff market competition. To distinguish themselves from other coworking startups, many companies are adopting niche themes. They market to specific types of workers or scenario-based working, which gives people the opportunity to work where, when, and how they want—even if those variables change. Instead of changing the space to fit the worker, the worker can simply change their space.
5. The space-as-a-service model is growing
The space-as-a-service sector is valued in the hundreds of billions of dollars. Coupled with the rise in growth hacking strategies and soaring CRE costs, coworking is only getting bigger. And while many companies still ask, “How does a coworking space work?” more are buying in to the many benefits coworking offers.
The shift to digital and cloud computing also makes it easier for companies to eliminate a central, physical workspace. When meetings, collaboration, presentations, accounting, and communication can all be done remotely, the chief purpose of a workplace is moot—along with the various types of workspaces within it. Advancements in the cloud and the migration of enterprise services allows any workspace to become a home base.
6. A “best of both worlds” solution
Coworking is largely about cost-savings for employers and flexibility for employees. These two advantages make it a natural solution to the need for flexible space, trumping even the most versatilely designed office.
It’s hard for any business to compete with the space-as-a-service model and coworking spaces. And why would they want to? Repurposing the second-largest expense on the balance sheet while leveraging an improved employee experience is often worth the transition to the coworking model.
Keep reading: The Benefits of Coworking.