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  • Why Coworking Spaces Are Here to Stay
    Workspaces

    Why Coworking Spaces Are Here to Stay

    If you’ve spent the bulk of your career working in offices alongside the same people year in, year out, the prospect of working in a coworking space might seem a little too progressive. But for the bulk of the modern workforce, coworking is slowly becoming the norm.

    The rise of the coworking space

    The term “coworking” was first used in the US back in 2005. Since then there has been an explosion in the number of coworking spaces available across the country.

    While in 2013 there were 781 acknowledged coworking spaces in North America, this is the year we’ll see over 10,000 coworking spaces open by the end of 2016 with an estimated 4.5 new spaces opening on a daily basis.

    The changing face of work

    The shift away from the traditional workplace has been partly driven by a change in the economic landscape.

    In the 21st century, people are being forced into a new reality of what work and employment means, one that is beginning to emphasize the individual over the enterprise.

    For a start, companies are downsizing more frequently. In September 2015 companies with headquarters in the United States jettisoned 58,877 jobs, a 43 percent increase on the previous month.

    A university degree is increasingly also no longer an assurance of a job. As of May 2015, 13.8 percent of 18- to 29-year-old graduates were out of work.

    As a result of these changes, 34 percent of the American workforce are now classified as ‘freelancers’ working independently.

    This shift has also impacted the number of startups in America – in 2015 32 of the United States’ 50 states and 18 of the country’s top 40 metropolitan areas saw major increases in the number of startups in their economies.

    The flexibility of coworking spaces

    Coworking spaces offer a range of options to meet the needs and budgets of a wide variety of people and organizations and are generally available at a fraction of the cost of dedicated office space.

    Independent freelancers, entrepreneurs and small companies can find everything they might need to successfully run a business.

    Alongside shared workspaces, facilities generally include conference or board rooms for private meetings, communal printers and photocopiers, as well as Wi-Fi and high speed Internet connections.

    In addition, coworking spaces usually provide shared kitchens, lounges and bathrooms – and copious amounts of coffee.

    In an era of the Cloud and IT ‘scalability’ – where you use and pay for only what you need – coworking spaces have successfully employed the same philosophy and applied it to the rented workplace.

    If you need more, you pay more when you need it, and for the time you need it (for example, a board room for the afternoon). With such flexibility, individuals and companies can easily pay for short-term work or meeting space as they need it.

    Creating a community

    More than anything, coworking space offers a sense of community. Coworking spaces encourage community by offering social activities and events that bring individual members together as a whole.

    Such events are where alliances are made and where the potential for sharing knowledge is explored, which often leads to collaboration and partnerships within a community.

    Robert Crauderueff wrote in The Atlantic about the coworking space he rented:

    “I’ve found a community of individuals who each have some sort of unique take on how to contribute to the world that does not fit into the traditional corporate structure. This space brings together a particular type of personality that is drawn to the excitement of creating your own work and is willing to live with the uncertainty that comes with being an independent worker.”

    The benefits of working together

    For freelancers, startups and small companies, the ability to working together that coworking offers brings numerous benefits.

    CLEVERism offers some insightful statistics about these benefits:

    • 68% of coworkers feel that working together helps them focus on work better.
    • Almost 92% of those renting coworking spaces are currently satisfied with this kind of arrangement and prefer to work this way.
    • 91% of coworkers agree that working together is a great way to interact with people from different fields and improves communication skills
    • 70% of coworkers believe that working together independently under the same roof is much better than working from a cubicle in a jam-packed traditional office setting.
    • Coworkers usually report a 50% increase in their income over time once they start working together.

    For individuals, the benefits of co-working are particularly pronounced. Freelancers who took part in a recent survey suggested “finding meaning in the fact that they could bring their whole selves to work” was one of the key benefits of co-working.

    The rising costs of traditional offices

    While the traditional view is that individuals and teams need their own offices to flourish, the reality of renting a dedicated commercial property is that costs are now almost entirely prohibitive.

    In 2015, Sally French, a social media editor for MarketWatch in San Francisco, published an article about office rents.

    Quoting ‘The Square Foot’ as her source, her findings were astonishing:

    “Here’s how much the average office space costs per employee in your city, based on allocating 200 square feet per employee.”

    City average yearly cost to rent office space, per employee:

    New York              $14,800San Francisco      $13,032Washington, D.C. $10,522Chicago                $7,000Los Angeles         $6,702Miami                  $6,630Seattle                $6,420Boston                $6,080Houston              $5,668Dallas                 $4,618Atlanta                $4,194

    The chances of many smaller companies being able to afford these prices are at best, remote.

    Likewise, the inflexibility of fixed, long-term contracts, upfront capital requirements and the need to pay your own utility bills makes traditional commercial space highly unattractive.

    In comparison, coworking space memberships can cost as low as $99 per month in some parts of the United States.

    Adding another layer of flexibility and convenience, in some cases, space is also available by the day or week.

    Better than telecommuting

    Of course, remote working is a natural conclusion, and increasingly popular option, for startups, freelancers and even entire companies, but is it viable?

    Randy Frisch, co-founder and COO at Uberflip thinks not. As he suggested to Entrepreneur.com:

    “Making an argument for a remote workforce today seems so easy. So why do we have a no work from home (WFH) policy at Uberflip? One of our 8 core values is an understanding that together, as a team, we are limitless. Any business in startup growth mode knows the importance of team buy-in to disrupting and knocking down boundaries”.

    The spontaneity of exchanging ideas at the water fountain and dynamism generated by a team heading towards its goals is lost when you have to login to Skype before speaking to someone.

    The value of coworking for existing companies

    Even the most traditional of companies are now exploring what they call “Corporate Coworking” – providing coworking spaces for groups within their organizations.

    The advantages of allowing smaller teams within a company (for example, a dedicated project team) to work in this fashion are numerous, from greater collaboration to learning from smaller innovative companies and individuals.

    The likelihood is that as traditional office space costs continue to rise, more and more larger organizations will send their staff to operate in coworking or shared spaces.

    The future of coworking

    Coworking is here to stay and if the recent past tells us anything, it’s that coworking spaces represent the future of the workplace.

    With an educated and experienced workforce finding fewer and fewer traditional job openings available to them, developing an entrepreneurial spirit is not just an option, but increasingly a necessity.

    The United States Bureau of Labor Statistics suggests that by 2020, 65 million Americans will be independent workers – that’s about 40% of the country’s workforce.

    As the economic landscape in the United States increases to change, coworking spaces will increasingly become an acceptable alternative to a traditional enterprise environment. If trends continue as they are, within a few decades coworking spaces will probably represent the norm rather than the exception.