The phenomenon of co-working, flexible offices and shared spaces seems unstoppable. But are they all they’re cracked up to be? The meteoric rise of serviced and co-working office providers has changed the market, and it is now not only start ups and growing companies looking to take these spaces. Companies are now faced with a choice over which type of working environment they move into, but how does moving into serviced space or co-working space impact your business? There are undoubtedly lots of benefits but we take a look at the rise of co-working and how ways of working are changing.
The news that co-working company WeWork has not only hired Danish ‘starchitect’ and BIG founder Bjarke Ingels as chief architect, but now rents 2.6million square feet of office space in London – more than any other organisation apart from the UK government – is testament to the strength of the sharing economy in this sector. ‘Ingels will help us reimagine and reshape the future of our spaces, our company, and ultimately our cities,’ WeWork founder Adam Neumann told Dezeen in May, hinting at the ambition of the eight-year-old company that already has 200 locations worldwide.
And it’s not’s just WeWork. Between them, companies such as The Office Group (also known as TOG), London Executive Offices (also known as LEO) and MarketTech account for 21.0% of office space take-up in 2017, a figure that is predicted to double year on year and has already reached 10.7million square feet. And it’s no surprise – co-working spaces reflect flexible working trends driven by technology and the increase in self-employment and SMEs. ‘Co-working provides a flexible alternative and has shown huge benefits for growing companies looking for a home until they are more established,’ says Grant Marcus of Making Moves London Ltd.
Even for larger businesses, co-working offers agility in an uncertain political and economic climate, shared overheads, and the opportunity to remove long leases from balance sheets. Tailored offerings such AllBright for women, TechHub for technology start-ups and LA’s invite-only NeueHouse for the high end of the market help small businesses to network with likeminded peers. And the bottom line is that they’re cool – in a jobs market defined by fierce competition to attract and retain staff, informal café-style working makes even nine-to-five employees feel as hip as their more entrepreneurial friends. Converts argue that their unstructured nature offers a boost to creativity and use them for short-term projects and collaborations if not a permanent solution. So popular have they become, that it is predicted that by 2020, co-working spaces will outgrow traditional leased offices.
But are they all they’re hyped up to be? Interior designer and change manager Hannah Nardini thinks not. ‘I’m not convinced that co-working spaces are the future,’ she says, citing the flipside of their oft-cited advantages. ‘Yes, your staff can network with like-minded people, but that’s not always in your best interests – we’re starting to see dips in productivity and companies losing staff to the businesses they share office space with.’ Being surrounded by more entrepreneurial companies might make your employees feel like part of the start-up scene, but not nearly as much as if they simply jumped ship. Marcus agrees that there are downsides to co-working: ‘You can only have a restricted amount of space and you don’t get much flexibility in deciding how to layout and configure your own office – co-working spaces are not great for creating your own presence – and neither are they very private.’ While some coworking spaces enable you to personalise your desks, they can’t provide you with your own front door or control over shared communal and meeting spaces. These areas are branded by the company running the space, meaning the visitor and employee experience will never fully reflect your own brand and culture.-
The other problem is lack of control. ‘Co-working spaces might offer flexibility, but the downside to that is instability,’ says Nardini. In a shared office you’ve got no control over who your neighbours are or what their day-to-day activities might be, and you’re at the whim of the programming of communal spaces – a noisy party at the same time as an important meeting is far from ideal.
Nardini’s advice? ‘Invest in long-term value and create your own flexible workspace.’ Taking the time to understand what will get the best out of your staff in particular rather than just following trends will pay dividends – and if that does turn out to be informal café style working – offer that within your own space. It sends a much more confident message to staff and clients than hedging your bets in a co-working space. The biggest cost to most businesses is their staff, so creating an office space where there is somewhere for everyone to call home – no matter their generation, job role or working style – will always be a sound investment. People have an instinctive desire to belong and a workspace with which people can identify with will deliver that – a benefit both in terms of competitive recruitment and ensuring staff stay happy and productive. ‘It all comes down to making the most use of the space you have,’ says Marcus. ‘This includes agile working and spaces that enable your people to work smart.’ While you’re at it, you might even consider creating a co-working space of your own and offering desks to carefully chosen suppliers and clients – building closer supply chain relationships without sitting your staff right next to your competitors. You know the old adage – if you can’t beat ‘em, join ‘em.
Over recent years there has a been a rise in the number of serviced office providers, in order to counter the demand for these flexible lease spaces, co-working and private alike. It seems that a large proportion of those operators dominating the market are the smaller providers, opposing the giants of the industry by providing a more personal and genuine approach for their tenants. In fact, last year, the three largest providers of serviced offices made up only 17% of the total market as smaller operators satisfied the growing demand. Canvas is a great example of one of these up and coming providers, initially a small family business that in recent years has grown to 12 buildings across London, housing nearly 70 companies. As the serviced office market seems only to be advancing, who knows where these smaller operators will grow to in the following years.
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