After taking one step into a coworking space, you realize you’re in for a treat.
The buzz is contagious. As you marvel at the communal workspaces, comfortable seating, and digital amenities, you get the sudden urge to get work done.
For those unfamiliar with the concept, this place may seem like a chic digital hangout. But those who have already utilized coworking spaces know its benefits all too well.
What is it about coworking spaces that enable workers to thrive? And why are more and more employees starting to use these spaces as their place of work?
For starters, coworking spaces are fertile ground for building community and networking with other professionals. They’re also a collaborative space where ideas can be shared and work can be tackled together.
They’re flexible, provide an excellent work experience, and they sure are effective.
In this deep dive on coworking spaces, you’ll learn why they’re growing at an impressive rate, who’s using them, and how workers are able to be so productive.
Where It All Began
What we now know as coworking spaces — or the shared work offices where people can collaborate, share equipment, and spread knowledge and ideas — burst onto the scene in 2005 in San Francisco. A software engineer by the name of Brad Neuberg is credited with starting the first communal coworking space.
As Neuberg launched his own startup, he realized that working from home and in different coffee shops didn’t give him the fulfillment he needed with his day-to-day work.
He wanted to independently launch his own business but also reap the benefits of networking and building community with other professionals.
It was at that moment he concocted a space where freelancers, startups, and small businesses could join flourishing communities and take their level of productivity through the roof.
The Rise of Coworking Spaces
Coworking spaces are now in nearly every major city across the world.
The big players in the coworking space — like WeWork, Regus, Knotel, and Impact Hub — are snatching up real estate and turning profits by providing workers with an alternative to the traditional office.
WeWork alone has over 12 million square feet of real estate at nearly 160 sites around the world.
But the big names aren’t the only ones who are setting up shop. Much of the growth of the coworking phenomenon can be attributed to new coworking spaces — over 65% are new businesses compared to expansions of coworking franchises.
While coworking spaces seem to be sprouting up everywhere you look, new offices are predominantly located in areas with a high concentration of freelancers, small businesses, and high entrepreneurial activity.
Other factors that contribute to the predominance of coworking offices are the prevalence of a tech sector, venture capital investment, and population density.
Although the growth of coworking spaces is slowing, areas like New York, San Francisco, Silicon Valley, and Austin are positioned to see an uptick in offices for years to come.
But what type of workers seek out coworking spaces, and what are they to gain?
Who Is Utilizing Coworking Spaces?
There are three different types of workers that you’ll find in a coworking space — teams from the smaller startups, larger businesses, and independent workers.
First, you have fledgling startups and small businesses who call coworking spaces home. This subset of workers gain a collaborative workspace at a fraction of the cost compared to leasing and furnishing a workspace on their own.
Not only does it reduce expenditures for small businesses, but it also plugs them into an innovative community where new talent can be recruited.
This benefit also extends to larger businesses, however, there are a few more perks that an established company yields. Larger businesses have the ability to place workers in new markets — either short-term or long-term — without the hefty overhead costs.
In 2017, WeWork reported that 25% of its revenue was attributed to workers from companies that have more than 1,000 employees. This percentage nearly doubled from the previous year.
Then you have digital nomads, freelancers, and those looking for a second workplace who are provided with an engaging place where they can be productive, network with others, and have an enhanced work experience compared to working in a coffee shop or from home.
In regard to which industries are occupying these spaces, the IT sector dominates coworking space membership at 22%, followed by PR employees (14%) and writers (9%).
Together these diverse groups can work side by side in a space built for productivity and collaboration.
Why Do Workers Thrive in Coworking Spaces?
Workers thrive in a coworking space because they’re able to utilize a flexible work environment where they can balance personal focused work time and periods of collaboration with others.
Workers are able to maintain a high level of productivity, collaboration, and work effectiveness through the support of the correct infrastructure and work environment.
Having a combination of “me” and “we” spaces helps workers find alone time when they need to focus and meeting spaces when they need to collaborate.
Traditionally, workers were shackled into cubicles. Over the past six years, the amount of time workers spend collaborating face-to-face or virtually has increased from 24% to 44%. During this same period, those who worked alone decreased from 54% to 45%.
This means that workers still need their privacy at some points throughout the day to be productive, however, the amount of time workers spend collaborating within the workplace is now at the same level.
When surveyed, 74% of those who use coworking spaces reported that they’re more productive working in these spaces. To top it off, a third of coworking space users reported an increase in income.
The benefits also extend to their ability to network — 86% report that they found a larger business network and 93% have an increased social network.
The Makings of a Great Coworking Space
So what do workers look for in an ideal coworking space? Well, it’s a combination of several tangibles and intangibles.
The best coworking spaces manage a fine balance of effectiveness and experience.
First off, the location of a coworking space is key. Offices that are located near happening downtown areas where restaurants and public transit are readily available are sure winners.
Secondly, the amenities and workspaces must be on point if a coworking office is to succeed. This means giving plenty of places to work, open floor plans with ample seating, and offering the option to work in both private and collaborative spaces.
According to Gensler’s 2019 U.S. Workplace Survey, “The amenities that deliver the greatest impact connect directly to people’s most salient needs and preferences: spaces directly connected to innovation, making, and collaboration; and quiet places to perform focused or individual work.”
It’s also critical that workers have access to a reliable internet connection, outlet plugs, printers, and monitors within conference rooms.
Other perks like complimentary snacks and coffee, mail delivery, showers, bike areas, informal spaces for socializing, parking, 24/7 access, and a gym are also a huge bonus.
It’s also crucial that a coworking space fosters a sense of community and provides ample opportunity to network with other professionals.
Establishing a strong community where people can rub elbows with one another is by far one of the biggest perks workers garner from joining a coworking space.
The successful implementation of all of these benefits isn’t going unnoticed — traditional offices want a piece of the action as well.
Coworking Meets the Traditional Office
As the boom of coworking spaces continues to unfold, larger companies aren’t just sitting back and watching — they’re carefully taking notes.
Many of the elements that coworking spaces have pioneered are now making their way into the traditional office space.
Companies of all shapes and sizes are experimenting with their workplaces to inject a boost of productivity and greater collaboration — specifically, creative and tech-focused companies like marketing firms and advertising agencies.
There’s a good chance you’ve experienced these things first hand at one point or another.
We’re talking about coworking elements like fluid work areas, fewer conference rooms, glass-walled offices for greater transparency, kitchen bars, billiard tables, and open floor plans — although open floor plans have received pullback due to the lack of productivity and acceptance within companies.
But that’s what many traditional offices are missing when they try to shake things up by switching over to something like an open floor plan. It’s much more than just allowing people to work from wherever they want.
Of course, collaborative workspaces are a necessity for modern companies, but workers also need to have access to private workspaces — at least for a portion of the work week.
Reshaping the Way We Think About Doing Business
The rise of coworking spaces has done more than just provide small businesses, freelancers, and digital nomads with a place to work — it’s fundamentally changing the way we think about doing business.
From a small business and startup’s point of view, why would you look to purchase or rent property that would shoot your overhead costs through the roof?
Instead, you could pay a monthly fee and receive access to space, technical infrastructure, and a built-in community with a coworking space.
The coworking phenomenon has also paved the way for an emphasis on greater collaboration amongst teams. No longer are companies operating in a siloed manner. Collaboration in a fast-paced work environment is driving the success of leading companies around the world.
Lastly, by putting a strong emphasis on the intangibles, like networking opportunities and a positive overall work experience, the modern day worker is realizing a new sense of fulfillment.
Is There an End In Sight?
Although coworking offices continue to grow in numbers, the growth has been slowing in recent years. The space is becoming increasingly competitive for coworking companies and some say there’s a sense of saturation setting in.
What won’t change is the utilization of this new style of working. Workers will continue to choose coworking spaces as either their primary or secondary place to work.
The priceless benefits of team collaboration, networking opportunities, and a go-to place to be productive will continue to reel in tenants by the masses.
As a worker, manager, or leader of your company, coworking spaces should remain top of mind.
Whatever your situation may be, you should be thinking about tapping into the next level of collaboration and productivity that coworking spaces provide.
