What is Coworking?
Coworking is a booming industry of real estate “operators” that purvey workspace and amenities to short-term tenants. A years’ worth of coworking in Hong Kong and London cost US$7,607 and US$11,931, respectively. Conventional office space leases in the same cities each cost over US$22,000 annually. This means that, by planning effectively, organizations can save up to 73% in metropolitan areas with flexible office space compared to traditional leases.
Why is Shared Office Space so Popular?
Since 2010, co-working spaces worldwide have increased by 5,519 percent as the average office space per employee has decreased by 2.9 percent. The meteoric rise of coworking can be attributed to an impasse between primary stakeholders and end-users. Commercial real estate, with owners traditionally unwilling to offer flexibility in leases, have become a less attractive investment to growing organizations. And, in line with the idea that flexibility enables greater productivity, corporate spaces with less-than-flexible policies are perceived as less valuable. Thus, the gig economy is willing to pay a premium for square footage that provides a good deal of freedom.
Compelling Stats for Coworking from HBR
79% said coworking has expanded their social networks
87% of respondents report that they meet other members for social reasons
54% say they socialize with other members after work and/or on weekends
83% report that they are less lonely since joining a coworking space
89% report that they are happier since joining a coworking space
Who Benefits from Coworking Space?
Businesses in growth mode often have the most to gain by positioning their operation in shared workspace. First, growth takes cash. And, as the second-largest expense reported by most organizations, economic efficiency in a workspace is a paramount concern.
For those that think the shared office space phenomenon is a flash in the pan, consider this. Fortune 1000 companies comprise over 30% of flex space mogul WeWork’s sales. And, from the perspective of corporate real estate, it makes sense.
77% of corporate real estate executives feel pressure from senior management to reduce real estate operating costs. Then, when they find a solution, 72% report being challenged on their presumed space needs. In response, the Global Occupier Survey shows that 45% of global occupiers use shared workplaces for the purpose of reducing costs and 41% do so to benefit from flexible lease terms.
Startups & Independents
According the the Harvard Business Review, there’s massive opportunity to build a referral network. 64% said their coworking networking was an important source of work and business referrals. Additionally, 82% of respondents reported that coworking has expanded their professional networks.
Finally, there’s the value of being in the proximity of larger businesses. Direct access to enterprise level decision-makers can foster relationships that return advice, validation and revenue. Research from the Harvard Business Review reports 80% of occupants turn to other coworking members for help or guidance. Furthermore, according to Accenture, 78% of corporate executives believe it is important to collaborate with entrepreneurs to encourage innovation.
Cultivating Coworking Space that Works As Hard As You Do
In addition to shorter leases, corporate occupiers needed more agile workspaces to keep pace with evolving work and diversified talent. Landlords either weren’t willing to accommodate or failed to apply effective flexibility – thus a new niche for just in time workspaces was born. Shorter leases are inherent to the coworking model. So, in order to differentiate operators have focused on three driving components. Let’s look at how shared workspace, amenities and a community culture can be leveraged to cultivate a shared workspace that works as hard as you do.
To address occupants’ need for environmental flexibility, a workspace must mirror their behaviors. Data from Leesman’s survey, collected from nearly half a million respondents, indicates that desks, informal breakout and meeting areas are the most important physical features of the workplace.
As a physical feature, desks are fairly cut-and-dry. However, designating different types of desks (not necessarily to specific people) plays a major role in balancing a workspace for efficiency. “Hot-Desks” are open, unassigned workspaces typically managed by a hoteling/reservation system. While these spaces create significant real estate efficiency, occupants can’t expect to use the same desk two days consecutively. Leesman’s data asserts the ability to customize individual workspace impacts employees’ ability to get things done. Thus, dedicated workstations enable occupants to exercise a degree of control over their space while still enjoying the other benefits of coworking.
Balancing Breakouts & Boardrooms
“Informal breakout areas” and “large meeting rooms” are each ranked in the top ten workplace features by respondents to Leesman’s survey. However, the overarching goal of shared office space is real estate efficiency – something the executive boardroom is not known for. Similar to the balance between designated and unassigned workstations, finding a happy medium of meeting area sizes throughout the space will give people the options they need. Then, setting up a reservation system can improve the utilization and other occupancy metrics concerning the space. Finally, opting for flexible, mobile furniture and allowing end-users to reconfigure as necessary are best practices for supporting the dynamic needs of a shared meeting space.
It’s no secret that the workplace plays a crucial role in attraction and retention – not to mention the day-to-day. In fact, 7 in 10 millennials list the quality of workplace as a key factor when looking for a job and 69% would trade other benefits for a better workplace. And, in the case of shared workspaces, research supports the alleged benefits. The Harvard Business review reports 84% of respondents said working in a coworking space improved their work engagement and motivation. However, exposed brick and beer on tap do not beget culture.
“Workspace-employee congruence” is a factor we use when we specify furniture for different areas in a project. While occupants of a shared office space may not be employees, the application of an individual to an environment still holds weight. There’s no cookie-cutter solution for delivering a unilaterally excellent experience. Beginning with the fundamentals, development will come organically through consensus over lessons learned.
To address end-users’ craving for a compelling workplace experience, both coworking operators and enterprise corporates have turned to blended space and on-the-job amenities. But what’s really important to people? We’re not particularly surprised that ping pong tables didn’t make the list. In Leesman’s research, coffee and other refreshment facilities are ranked second only to individual workstations – followed shortly by restroom and wash.
Accessibility is the most prevalent and multifaceted component of effective shared office space. First, geographically – how the surroundings complement the facility and the work that occurs there. Then, inside, adequate workspace options and fine-tuning the proximities they create to be enabling versus inhibiting. Finally, in the sense of connectivity. Weak wifi equals a weak workspace.
Looking for Coworking Space to Land?
At Office Furniture Warehouse, we’ve always been here to make your workspace work as hard as you do. However, that puts the burden of finding workspace on our clients – until now. OFW+Community is a Chattanooga Coworking Space operated by Office Furniture Warehouse, and we’d love for you to join. Learn more about the community and schedule a tour of the space!