Co-working spaces are becoming more and more popular – they offer a kind of flexibility that’s new in the commercial leasing world. Lots of companies, especially smaller ones, have changing needs for space and the newest generation of workers want to break out of cubicles and work in a different kind of environment. Co-working spaces can offer all of that – is a co-working space right for your business?
The Basics of Co-Working Spaces
First, what exactly is a co-working space? It’s basically what it sounds like – a cooperative business working environment. The Harvard Business Review (HBR) defines co-working as “membership-based workspaces where diverse groups of freelancers, remote workers, and other independent professionals work together in a shared, communal setting.” In other words, lots of different companies and individuals work together in the same spaces.
Some co-working spaces offer large communal work areas, some offer various sizes of offices, and some offer a mix of both. They all tend to have flexible leasing terms – often month-to-month rather than the multi-year terms of many commercial leases. They also frequently offer various networking opportunities and events to bring members together. Many specifically cater to incubating new startups and linking them up with other companies and individuals that can help them grow. And lots of them offer interesting workplace perks – beer on tap, ping-pong tables, arcade games, and more.
Co-working spaces are booming around the country. Experts predict that there will be more than 10,000 co-working spaces across the US by the end of 2016 and more than half a million people worldwide now work out of co-working spaces.
What’s So Great About Co-working?
HBR has found positive correlations between co-working and increased work happiness and productivity. In fact, on the thrive scale, researchers have found that co-workers report “levels of thriving that approach an average of 6 on a 7-point scale. This is at least a point higher than the average for employers who do their jobs in regular offices.”
Employees who are thriving are productive and satisfied – not just with their own roles, but with the overall company and their place within it. Thriving employees are energetic and invested. They also less likely to report corporate burnout. Isn’t that what all companies want for (and from!) their employees?
Entrepreneur and business owner Nicole Vasquez saw an unmet need for a co-working space in her Chicago community, so she created The Shift. Nicole used a $7,000 loan from Accion to turn a former laundromat into a 30-space work station co-working center. The Shift allows it’s co-workers to schedule flexible working hours in a bright, airy location.
One hallmark of The Shift is that it’s inclusive to professionals across all industries. The Shift’s roster of co-workers span a wide variety – from public education to nonprofit management to marketing, even writing and consulting.
In addition to co-working spaces, The Shift hosts classes and educational events for the local community. Nicole feels that The Shift provides a unique, collaborative co-working space for professionals across different industry spectrums, as well as a positive boost to the community.
Long story short, a co-working space can provide an interesting, exciting work environment that can inspire you and your employees. But it’s not right for everyone – so how do you decide?
Pros of Co-Working Spaces
First, people just like working in co-working spaces. Employees using co-working spaces are more likely to view their work as meaningful. It’s interesting to note that this impression is not based on the type of work or industry.
Why is this? There are a few theories. The first is that because co-working brings together a community of different titles, interests, corporate roles, and industries, co-workers are more likely to work comfortably side by side, rather than in direct competition with one another. Workers report that not having to jockey for rank in a business community can be a welcome relief.
Second, the nature of the co-working space fosters a collaborative atmosphere that a traditional business space doesn’t. Since each person in the co-working arrangement has such unique skills, they can bring more to the table and work to help others out.
Third, it’s easy to adjust a co-working space to your business’s unique needs in real time. Hiring someone new? Upgrade to a bigger office next month! Downsizing? Move to a smaller one! These spaces also offer flexibility for people that want to work remotely – they can come into the office when necessary and work from communal areas but you don’t have to have a dedicated space for a person that’s in the office once a week.
Third, co-working is not just part of a business environment, but part of a larger social movement – refer to the Coworking Manifesto. The Manifesto details values and aspirational goals of the co-working community; namely, community, collaboration, learning, and sustainability. Being part of a larger social movement can give co-workers a real sense of purpose which may not exist in traditional business arrangements.
Cons of Co-Working Spaces
Scheduling at these kinds of spaces can be a boon or a curse. Co-working spaces often offer access to their facilities at all hours, day and night. For some workers, this may be a great thing, allowing them to schedule work when it’s most convenient for them (some folks are just night owls!). But for others, this may mean they feel pressure to be “on call” at all hours. It can be hard for some workers to set clear work/life boundaries when co-working, when it’s known that they “could” be at the office 24 hours a day.
This may be a particular issue in billable fields, where the sun rises and sets on the billable hour; e.g., lawyers, accountants, and certain consultants. In order for employees to avoid burn-out, it’s important to delineate certain working hours and set clear expectations, so they don’t feel as though they are constantly on the clock.
With clear parameters for what’s expected regarding holidays, weekends, and late hours, you can help avoid that pressure.
Co-working spaces offer an open flexible environment, and as with 24-hour access, this is a double-edged sword. Some employees revel in complete autonomy to do their work and feel more productive and empowered. Other employees may need the structure and leadership of a traditional office environment.
Ultimately, it will be a managerial judgment call whether certain employees will fly or sink in a co-working environment. You know your employees, your industry, and the nature of your tasks the best – so look closely at whether co-working makes sense for your unique staff and company needs. If your corporate culture would benefit from co-working, it’s worth exploring.
Finally, co-working spaces can be pricier than traditional office alternatives. Providing a well-designed, fully stocked, and workable business space doesn’t come cheap. The cost of providing multiple full service co-working spaces may rival the cost of one traditional office space. You’ll need to consider whether you’ll need to invest in newer, expensive technology to make co-working effective – for example, by implementing video conferencing software or purchasing updated computers.
The only way to make a fact-based assessment is to crunch the numbers. What does it cost to run your current or desired business space? What would it cost to run your co-working space for each of your co-workers?
Cost is not THE only factor – if you think that co-working may make your employees more productive, more satisfied, and more energized, than a larger cost may be offset by the benefits. You’ll have to look at the hard numbers, then weigh the intangibles to make the call.
The Co-Working Call
Co-working is a trend that seems to be here to stay. Many people, especially younger workers, love the communal and flexible environment. The networking opportunities are also terrific for a new business – you have the chance to meet lots of other entrepreneurs and share your stories, struggles, and advice. Businesses, especially startups, like the flexibility in terms of office size, lease duration, and how they can use the space.
But again, it costs money. And you’ll need to seriously evaluate your own workplace needs and those of your employees. It’s a lot of fun to have a ping-pong table at the office, but some people just need more structure (and less temptation) than that. Even if your own employees aren’t tempted by the interesting activities around the office, other people will be and that kind of bustle can be distracting.
At the end of the day, it’s all about the unique needs of your business. Do you expect your needs for office space to change? Do you and your employees want an open and collaborative workspace with other startups or would you prefer a dedicated area for your business? Do the costs make sense? If you’re curious, there’s almost definitely a co-working space near you. Go check it out and see what all the fuss is about!
Accion loans to these community-minded entrepreneurs were made possible thanks to support from The Hartford, which focuses on helping neighborhood businesses thrive.