Watch this space
Watch this space
Co-working spaces are becoming ever more popular with large and small companies alike. But how can organisations decide if this approach is right for them?
There has been a perception that communal workspaces are just for start-ups. More recently, big business has also begun to embrace the ‘co-working’ revolution and to reap many benefits beyond cheap and flexible rents. However, some companies have discovered the hard way that one size does not fit all.
Co-working chains have grown rapidly and globally. GCUC, a co-working conference company, and Emergent Research, a research and consulting firm, found that there were 11,790 co-working spaces globally in 2017, with 1.74 million members. They expect membership to rise to 5.1 million by 2022. The industry’s poster child is The We Company (formerly WeWork), which has more than 400,000 members at 425 locations in 100 cities across 27 countries. A third of Fortune 500 organisations occupy space within WeWork.
In Asia, the proportion of The We Company’s space occupied by big business is even higher in some cases. In Singapore, companies with more than 1,000 employees comprise 45 per cent of its membership, and in Greater China the figure is 38 per cent.
“We are seeing a huge shift towards a new way of working and living; people are focused on meaningful connections and being part of something greater than themselves,” says Turochas Fuad, Managing Director of WeWork Southeast Asia.
One huge attraction of shared workspaces is networking. Most co-working companies want to foster a community and many use open-plan desks, as well as hosting regular social events, wellness sessions, product launches and investor meetings.
Expensify, a financial software company based in Portland, Oregon, has been a tenant at a co-working space in London for four years. Lindsey Peckham, Expensify’s EMEA Marketing Manager, says the beauty of the space is that employees can easily mingle with their counterparts in like-minded businesses.
“There are events that are great networking opportunities,” she says. “It allows us to engage in the tech community – more than we probably would if we just had a small, private office.”
By working alongside start-ups, large companies such as professional services firm KPMG hope to spot emerging trends and opportunities to support them earlier in their lifecycle. Kirsty Mitchell, Director of Growth for KPMG in the UK, says: “By placing small KPMG teams into co-working spaces, we are part of a fast-paced ecosystem, working daily with businesses to help them as they grow, and to identify key issues and opportunities for them as they arise.”
She believes these environments could help KPMG project teams come up with new solutions to problems as well, rather than internal project rooms which, she suggests, can stifle creativity.
Robert Duggan, Managing Partner, London for the international law firm Mourant, says the move into a co-working space has enabled larger cultural changes across the organisation. While the firm was initially simply looking for options when its office lease came up for renewal, it took the opportunity to innovate more of its processes.
“Before this move, everybody turned up in suits,” Duggan explains. “We probably hadn’t embraced agile co-working in the way we should have done.”
He says the starting point was changing the dress code to stipulate attire that was appropriate for the office, with access to an outfit that was suitable for meetings. However, the firm found this had little impact and people continued to wear suits.
“I didn’t want people to feel self-conscious when we moved to this more open environment. So we embraced a more formal dress-down policy and an agile working policy about three months before we moved, and I had to lead the way. It was actually really hard – I had to buy a whole new wardrobe!”
But as he and other senior leaders made these changes consciously, more junior staff were given the confidence to do the same. This, coupled with the open layout, has led to a more collaborative, personal and socially dynamic culture within the firm.
The transition hasn’t been without its challenges. “When we first came in, telephone etiquette was a disaster,” Duggan laughs. “It made for a very loud and disruptive environment, but people have tempered the volume with which they approach telephone calls.” He says this behaviour has naturally been regulated by staff. “It’s actually a lot quieter now than I thought it would be,” he says. “People take conversations into social areas and, culturally, that’s been helpful. It forces people together.”
A space that fits
The modern design and layouts used by many co-working companies can also be a boost for workers. Simple steps like increasing the amounts of greenery and sunlight can have a great impact on engagement. This is known as ‘biophilic design’ and a Robertson Cooper report found that it can increase workers’ levels of wellbeing, creativity and productivity by 15 per cent. Another study, published in the journal Building and Environment, found that employees in ‘green certified’ buildings scored 26.4 per cent higher on cognitive function tests (controlling for salary, job type and education) and had 30 per cent fewer sickness symptoms than those in non-certified buildings. The benefits are clear: presenteeism, or working when sick, costs US employers US$150 billion per year in lost productivity.
There are several other benefits of co-working, especially when it comes to attracting and retaining talent in a competitive recruitment market. Co-working spaces tend to come with the perks younger employees now expect, from free coffee and beer on tap, to meditation yurts and kick-boxing classes.
But simply taking teams away from an organisation’s main offices and putting them into co-working spaces to look cool, cut costs or increase capacity won’t help achieve business growth, Mitchell insists.
One reason for this is that workers have different needs – it’s not a one-size-fits-all market. Software engineers, for instance, cannot have glare on their screens, but some salespeople may prefer to have more light and to be able to make noise. It’s important to make sure each element of a space is designed for you. The We Company has consultations with potential tenants to learn about their needs and to create a space that suits their operations.
“Workspace is more than a lease, it’s truly a dynamic environment that shapes the whole employee experience,” says Fuad.
Co-working companies have to tailor their offices to fit in with the local culture, too. For instance, The We Company’s Jakarta locations have prayer rooms, as the majority of the Indonesian population is Muslim. Conference rooms are also bigger in some of The We Company’s Asian markets, such as Greater China, as there is more demand for them there.
If companies tailor spaces correctly to employees’ needs, there are other health benefits that can come from working in them. Lyndon Garrett, Assistant Professor of Management and Organizations at the Boston College Carroll School of Management in Massachusetts, explains: “With loneliness and social isolation pervasive, people crave social connection. Workplaces are being asked to provide community in a way that will attract workers, especially millennials who are seeking meaningful careers.”
A study in Harvard Business Review found that working among people doing different jobs – the bread and butter of co-working – can enhance workers’ identity. This is especially true for small business owners, who often experience stress and loneliness. Co-working is communal, which is what encouraged Jin Kwon, founder of Korean beauty company TONIC15, to join a shared workplace provider in London.
She says: “When times are really tough, it’s inspiring to talk to people in the community. Everyone is willing to help. They are genuinely interested in your success.” She received advice from fellow tenants on securing investment, for instance, and co-hosted a product demonstration event at her co-working space.
Keeping in contact
Of course, the most tangible benefit for companies is that shared spaces are flexible and affordable, and they don’t have to tie themselves into long leases. Andrew O’Donnell, UK Real Estate and Workplace Director at real estate services company JLL, says: “The flex market allows organisations to instantly expand or contract space for their people and clients.”
Yet there are problems with shared workspaces. Some organisations use them for individual teams which can make it difficult to keep them connected to the main business. The issue can be exacerbated by a co-working company’s own culture.
O’Donnell explains. “Employees can sometimes get subsumed into the culture of the operator’s co-working space, not that of their employer.” As a result, he recommends that businesses avoid sending new hires to shared co-working workplaces, and recommends choosing spaces close to their own office.
To address this problem, some co-working operators offer tenants video conferencing software to ensure they have a connection to their broader team. Bobby Marhamat, CEO of a start-up in Los Angeles, has taken a different approach by using a private office within a co-working space that is separate from the communal areas. Many big businesses prefer this approach to shared working, particularly those that deal with sensitive information. It addresses some of the common drawbacks of co-working: overcrowding, noise, mess and lack of privacy.
“We have a company personality that we enjoy within our four walls,” Marhamat says. “But as we walk out into the common spaces and the lounge, we are surrounded by a bunch of people who share our passion for entrepreneurship.”
The We Company has other solutions to the privacy problem. “We might use privacy vinyl, or strategically position certain design elements to provide the necessary privacy,” says Sern Hong Yu, Vice President of Product Delivery for WeWork Greater China. “We also have electrostatic-controlled switch glass in special large meeting rooms to make sure our members feel comfortable while conducting highly confidential meetings.”
Peckham advises trialling shared workplaces to find the perfect fit. “Every co-working space brings something different to the table,” she says. “Some spaces don’t come with all the bells and whistles but have a strong community [and vice versa].”
But, most importantly, companies need to have a clear business objective for using a co-working space.
“Co-working because it’s the cool new thing isn’t the right approach,” says O’Donnell. “But if it’s about increasing relevance to, and attracting, clients and talent, or being able to adjust your office portfolio faster, then you have fantastic reasons to join.”
Three considerations for companies embracing co-working
- Capacity: Shared workspaces can become crowded, and a common complaint is that there are not enough meeting rooms or private areas in which to meet clients or have private conversations. It’s a good idea to visit a shared space and check that there is enough meeting room availability.
- Tenants: Networking is one of the most cited benefits of coworking. Indeed, the people in a space can be just as important to your experience as the space itself. So it’s important to find out which other businesses are in the space before you sign up, and whether they align with your goals.
- Pricing: Many businesses sign up for coworking to do away with costly, inflexible leases. Shared offices can come with plenty of perks, but make sure you know what is included in your membership plan before signing on the dotted line, so that you aren’t hit with any hidden fees.