The Rise of Coworking Spaces
Chances are if you are in the startup ecosystem, freelancing or working in the tech sector, you’ve probably spent some time working from a co-working space. Challenging the traditional office space model, co-working spaces offer a tech-enabled collaborative environment to work in. Co-working spaces have grown globally at a rate of 200% over the past five years, there are currently over 14.000 of them around the world and it looks like this is only the beginning. Usually cheaper, and more laid back, then a regular office space, co-working spaces have been widely adopted by fast-growing companies and freelancers alike. Why are co-working spaces becoming so popular and how did they spread so fast? Let’s dive deeper into how and why this happening.
The Startup Ecosystem
Coworking spaces cater to the needs of startups. They offer a space which is more affordable than regular office space. Not only is it more affordable, but they also make much more sense for a startup as they have flexible membership options, you can get a short lease and will not have to pay a large security deposit like you normally would with regular office space. Coworking spaces also allow startups to scale up at their own pace. You may start at a coworking space only using a hot desk with a team of 2-3 people, by the end of the year you might be 20 people, a co-working space can easily accommodate for such growth. With regular office space, you need to plan your growth in advance and if things don’t go as planned you may be renting an office space for 20 people whilst still only being 2-3 people. Lastly, the mix of freelancers, entrepreneurs, and startups creates a great sense of community. It is an environment which encourages innovation and productivity, seeing as co-working spaces are known for hosting events/talks which support the startup ecosystem and create networking opportunities. In central London, coworking spaces typically operate at 84% capacity. The environment of the coworking spaces is tailored to the startup world. It has never been so easy to start a company as it is today which explains why co-working spaces are not really struggling to fill their spots.
It has been estimated that by 2020 40% of coworking members will be digital nomads, freelancers, and part-time workers. This can be attributed to the rise in remote work opportunities. Research has shown that by 2020, 50% of the UK workforce will be working remotely. Moreover, 50% of the U.S workforce is already working remotely. Advances in technology now make it possible to work from anywhere given that you have a laptop and decent internet connection. The traditional infrastructure offered by regular office spaces is being replaced by a stream of digital tools such as Skype, Dropbox, Slack, Trello to name a few… This makes it possible to manage teams remotely, teams which are now spread around the world often working from coworking spaces. There are many companies such as Buffer, Hotjar, and Github which operate on a fully remote basis. Advantages of working remotely for employees is that they can spend more time with your family, skip the rush hour commute to work which also reduces your carbon footprint and it has been argued that remote work actually improves productivity and employee satisfaction. For a remote worker, the flexible arrangements offered by coworking spaces can be very attractive. Knowing you can rent a deskspace amongst like-minded individuals for however long you need helps in combating the disadvantages of remote work such as isolation and decreased the work-life balance. This increase in remote work directly contributes to the rise of coworking spaces.
The Millenial Workforce
Millennials will make up three-quarters of the workforce by 2025. According to a study conducted by consulting firm Deloitte, millennials are attracted to companies that focus on innovation and solving societal issues – a trait often ascribed to startups. Moreover, the study found that 75% of surveyed millennials responded that they would like more remote work opportunities in the future. What is soon to become the largest demographic of our workforce have different motivations when it comes to working. As opposed to previous generations, millennials value experiences and flexibility in the work-life balance over financial gains. Millennials are thus demanding flexible working arrangements and jobs with a purpose where they can make a difference. This shift in work mentality and the fact that millennials are becoming the largest demographic in the global workforce helps explain the growth of coworking spaces seeing as they respond directly to the demands of the millennial generation. Coworking spaces are in some sense the physical embodiment of how millennials view the future of work. A place where you can meet interesting people, find purpose in your work and develop yourself as a human being.
Taking into consideration all of the above, it comes as no surprise that coworking spaces are on the rise. Startups, remote workers and freelancers alike are more inclined to want to use coworking spaces as opposed to traditional office spaces as it is cheaper and offers a full package which can’t be found in other work environments. Aside from the practical elements of using a coworking space; the mix of community, innovation and personal development are strongly encouraged and thus make it the ideal workplace for tech-enabled millennial workers.