Why coworking is happening, where it’s happening, and what it can mean for your business
Not too many years ago, most companies operated in premises that belonged to them alone. Sometimes a company had its own headquarters, sometimes it had a number of offices. But the company name was over the door, and unless employees worked from their homes or worked certain jobs – like outside sales or some tech positions – they worked everyday in a company location.
Then around 2006, that workplace model began to change. According to “The History of Coworking in a Timeline,” an article that appeared on DeskMag.com in December, 2018, one of the first coworking spaces was The Hat Factory, a shared work space that opened its doors in San Francisco in 2008. That same article documents that by the end of 2008, about 160 coworking spaces were operating worldwide. The article also notes another milestone, the publication in 2009 of the book, I'm Outta Here! How coworking is making the office obsolete.
In only a year or two, the coworking trend was off and growing.
There have been speed bumps. As you know, the world of coworking heaved a collective gasp when WeWork, a very big player headquartered in New York, canceled it's IPO in 2019 and closed their Spacious coworking business. That made the news, and caused news anchors and business journalists to ask the misguided question, “Is the day of coworking coming to an end?”
Apparently, those “experts” had not taken the time to Google the term “coworking spaces.” If they had, they would have found that virtually every city in the world now offers multiple coworking options. It’s happening in every big U.S. city (as well as most smaller towns and suburbs), in every international city, and even in places you wouldn’t expect to find coworking spaces, like Tunisia. (Yes, you can find coworking spaces there.)
In New York City alone (KettleSpace’s home turf), there are a whole lot of coworking companies to choose from. They include Galvanize, Green Desk, Knotel, and the Germanic-sounding Neue House –and that’s only a top-of-head list of some of the other esteemed companies that do business in our space. So while the evening news was fixating on WeWork’s demise (and we do feel bad because many of the people who worked for that company lost their jobs), the fact was that coworking as a trend was never in trouble. In fact, coworking spaces were sprouting like mushrooms all over New York, all over America, and all over the world. And they still are today.
Why Coworking Started and Continues to Grow
We like to think that it is because of two things, which are people needs and business needs. If you do some research online, you will find that most articles about coworking focus only on business needs. But because we think a little differently, we are going to discuss both kinds of needs. And we will discuss people needs first.
People like coworking because . . .
· They have babies. Some of the earliest coworking communities started because parents of younger kids needed childcare on workdays. And what could make more sense than working in a shared office space that is attached to a childcare facility? Today, there are a lot of these dual-purpose cooperative work spaces. One is Work and Play, located in South Orange, New Jersey. That’s just one example.
· They like short commutes. I mean, don’t you? If you live in Brooklyn and the company you work for has its headquarters in Manhattan, it makes a ton more sense for you to work from one of KettleSpace’s Brooklyn locations. Convenience, saved time, and lower commuting costs are other important reasons coworking is growing.
· They are creative. Experience is proving that people can be more creative when they spend their days (or some of their days) in coworking spaces where they are surrounded by other people who are also creative, energized, and completely focused on their work.
· They seek comfort. On a busy day in New York or another city, you can see lots of people who are firing up their laptops in Starbucks, in atriums outside office buildings, in the New York Public Library, and just about anywhere they can find Wi-Fi. Those people are generally having miserable workdays. In contrast, coworking spaces are much more comfortable – not to mention warm, dry, secure and stocked with food and beverages. Because human beings seek comfort, coworking spaces are growing.
· They crave variety and interesting experiences. Hamsters like to curl up in the same little holes they make in wood shavings everyday, but people like variety. Don’t you? And because coworking spaces provide the opportunity to mix up the places you can work, they make working much more pleasurable.
· They are social beings. There is a lot to be said for being part of one company and seeing the same people every day. You get to know those people, you come to see them as a second family. (You might also come to have frictions with some of them, but let’s not dwell on that.) In contrast, coworking provides a different set of social options. People find they can meet new people (some of whom become business resources), find out about them, maybe even become friends. The opportunity to socialize adds variety and excitement to the world of daily work.
Those are only a handful the people needs that coworking satisfies. And we know that companies are more successful when their employees are happy, well-adjusted and productive. So people needs and business needs kind of mesh and lead to better organizational performance.
And speaking of business needs, let’s take a look at how they are met by coworking.
Businesses like coworking because . . .
· They don’t need to provide a desk and floor space for every employee every day. This gives companies the option of staffing up quickly and economically when opportunities arise.
· They like to hire consultants, temporary workers and “hired guns” to work on short-term projects. Coworking spaces offer places where these short-term teams and individuals can settle in and get their work done.
· They sometimes need to establish beachheads in new cities, states and other territories. Thanks to coworking spaces, companies can do just that in a matter of weeks, not months. Plus, the cost of using shared work spaces in a new location is far less than the cost of renting new office space.
· They offer their employees a new and exciting way of working. (See the people needs we listed just above.) As a result, employees work better, are more energized and creative . . . and are less prone to burnout and quitting. More organizations are finding that coworking offers a more fulfilling way of performing a job.
· They can also downsize more efficiently. We’re not talking about laying people off exactly. We are talking about the times when a big new project has been completed, a product has been launched, when consultants have done their work, and when staff size can be trimmed. If people who are no longer needed have been working in expensive leased office space, letting them go presents many logistical challenges, as well as a lot of costs. But businesses are finding that those difficulties are lessened if special teams have been working in shared, flexible work spaces.
· Coworking offers their employees a healthier work/life balance. Shorter commutes, nearby work settings and greater flexibility all support a better work/life balance among a company’s employees. And we know that happier employees not only work better, they develop the kind of loyalty to their companies that dramatically reduces turnover.
· They can attract the kinds of workers they want the most. Companies that rely on younger entrepreneurial workers with newer skills are finding that coworking spaces function as a recruiting tool that helps them hire the workers they want the most. The employees those companies desires are excited about working in shared works paces like KettleSpace’s. It all fits together. It all works.
Things Your Company Should Consider Before Using Shared Coworking Spaces
If you are thinking of letting your employees log time in off-site shared work spaces, here are some questions to ask and issues to consider:
· Do a workforce analysis. Realistically, how many employees will work off-site, and for how many hours? And what percentage of your space should that free? You might only be able to do a rough estimate at first, but smart companies draft a realistic plan of how their in-house facilities can be reduced.
· Think about systems. Are there certain computerized systems that can only be used in-house, or can the majority of your employees work remotely on laptops?
· Consider the impact on your internal staff. Which of your employees will be most likely to continue to spend most of their time in your home location or locations? Even though your company could end up having fewer internal employees, you should consider their space and other needs.
· Consider how your internal space can be modified. Many companies find that after they start using off-site shared work spaces, their home facilities start to look more and more like the off-site locations they are using, with shared open work areas where employees can plug in and logon. That alone can reduce the need for private offices and cubicles, which in turn can save money.
· Plan how you will keep your data secure. Many companies discover that letting their employees plug in and log in in shared working spaces offers more security than allowing them to work from coffee bars and other public locations. But stop to think about issues like laptop theft and establish safety routines for all your employees to observe when they are working off-site. Requiring them to use cable computer locks on their laptops whenever they are working outside the office – whether in public spaces or in a coworking space – can be a simple safeguard that costs very little money.
· Plan to negotiate your best deal. Most coworking companies offer a variety of plans and options, with different price levels. However, most of the companies that provide coworking spaces should be willing to work with you, discuss your needs, and offer you a plan that meets your budget.
And Think about the Big Picture Too
Using shared off-site work spaces can play an important role as your company grows. So think big by asking questions like these:
· Can you grow faster and staff up quickly, as needed? Thanks to shared work spaces, you can staff up flexibly and quickly respond to new opportunities. If you win a new client, for example, you can add new employees without considering whether you have enough internal space to house them.
· Can you expand into new cities and new regions without overspending? When you’re operating only out of company headquarters, your ability to enter new regions and markets is limited. But if you can enter new regions by setting up shop in shared work spaces, you can expand more quickly. And you can control costs at the same time, because you won’t immediately need to lease or buy new facilities for your employees.
· How about launching a new division, a new product or even a new company? Shared work spaces can give you the flexibility to staff up and try new things without busting the bank. Think big! You have a powerful new tool for business growth at your disposal!
In Summary . . .
Shared coworking spaces have grown so quickly that it is obvious that they meet many companies’ pressing needs. But here is a big question for you to consider . . .
Sure, coworking is a hot trend right now . . .but does it meet your needs?
After all, the fact that a lot of other companies are starting to use shared working spaces doesn’t mean they are the best option for your organization. If you ask the right questions –and a coworking company gives you the right answers – then coworking could be a great opportunity for you.
To make the right decision for your company, contact KettleSpace today.