Creative Coworking Spaces are poised to offer a solution that helps both employers and employees juggle competing demands – both in the immediate, and as things stabilize into the new normal.
At this point, it feels almost impossible that at the start of this year, we were talking about the great trajectory of coworking spaces from a flexibility standpoint, eyeing middle markets as the next hub as work-like balance champions pushed work into the suburbs.
Then the COVID-19 pandemic hit.
Corporate offices, schools, and public buildings rushed to close doors to reduce the spread of the virus.
And now as business leaders start to debate what next steps are, it’s clear we’re on the cusp of a coworking revolution, forced by a need to keep employees healthy and a realization from these past few months that we can harness flexibility into more productive, happier employees.
Here, we look at what we’ve learned about the ways we work, and how we expect those ways to change.
COVID-19: Lessons in how we work
The coronavirus pandemic has not only forced businesses to adapt to the situation now, but it’s also imposed a sudden revolution in the way we work – one that’s not likely to evaporate even with the production of a pandemic-ending vaccine. The COVID-19 pandemic has forced businesses to learn:
- Businesses need extensive risk-adverse solutions. Cutting costs is a key way to do that, and corporate offices are expected to embrace coworking for its flexible, lower-cost model, both Forbes and Coworking Resources predict.At the start of the year, Joe Brady, the Instant Group’s CEO of the Americas, predicted that in the face of an inevitable recession, larger organizations would turn to flexible spaces for risk mitigation. The CRE market is in the age of acceleration,” Brady told Forbes. “[It is] injecting flexibility into a fundamentally linear asset class. In the possibility of a recession, we see the flexible office market as being a risk-averse solution for companies looking for office space.”
- Traditional office space isn’t a requirement. While the Zoom happy hour might be a little passé at this point, the work is getting done. Companies have had to implement software that facilitates remote working, and employees have experienced the flexibility it affords. Employers will be challenged to combat employee requests to work from home now that we’ve seen it’s a possibility – and a coworking space offers a solid middle ground.
- Technology-only interactions aren’t always satisfying or inspiring. While in the near-term, safety will play a major role in how people transition back to face-to-face, we’ve also learned a life of just video conferencing isn’t as satisfying or inspiring as meeting in person. Coworking offers a way to meet safely without having to commit to a full-time office.
- Coworkers don’t have to be freelancers, small businesses, or startups. In fact, Coworking Resources predicts many coworkers will be corporate members, super flex members, or proactive landlords. Super flex members are those who expect an even higher degree of flexibility, perhaps even on an hourly basis, to meet specific project demands. Practically, as employees continue to work from home, a few hours’ reprieves from the cacophony of small children, spouses taking loud phone calls, or pets may push people to get out of the house for at least a small block of time.
In addition, landlords are likely to face heightened demand for shorter-term, more flexible leases, Coworking Resources predicts. Those who aren’t big players positioned to develop their own offering will appreciate having an established coworking space handle the operation lift required to market, staff, and manage memberships required to operate a coworking space.
The WeWork Story
All the news coverage of WeWork’s recent challenges might beg the question about whether co-working spaces can survive in the immediate to be a key player in the future. But it’s important to highlight some of the key differences from WeWork’s model compared to others.
WeWork holds 1.7% of the global coworking industry share (just behind top player Regus, 11%); however, experts have long been predicting greater fragmentation, and specialization, in the space.
While WeWork reportedly strives to reduce as much as 30% from its rent liabilities, it’s unlikely new tenants will immediately step up. With a focus on gaining revenue from fixed rent leases, WeWork adopted a higher risk position by taking long leases and breaking them into smaller short-term flexible arrangements, according to Lexology. And when the market takes a dip, so do revenues. Long before the pandemic was making headlines, WeWork abandoned its IPO last year, and lost the largest shareholder, SoftBank, due to unmet conditions.
While WeWork is sizable, it doesn’t represent most coworking models, which focus more on stability in their structure.
Jumping into the new Coworking Normal
Whether you just need a break from taking conference calls while acting as a human jungle gym for your kids or you looking to move your team to a safe and flexible location, HEXA offers many flexible options to meet your specific business needs. Please reach out to hexa@hexatx.com to schedule a tour or tell us how we can help you establish your new normal.