The recent outbreak of COVID-19 is affecting every industry including the coworking office model. Before the outbreak of COVID-19, co-working spaces were considered to be highly productive when compared to employees working on their own. In a 2015 study of 1,500 co-workers in 52 countries by Global Coworking Unconference Conference, eighty-four percent of individuals reported they were more engaged and motivated since joining their co-working community. It was discovered that the fast-paced environment, built-in peer accountability and flexible amenities were key elements that contribute to their productivity. Unlike traditional co-working spaces, individuals have control over their work environments. Hence, they are able to choose how, when, and where they work.
In this article, we are going to explore the impact of the coronavirus on the coworking space, and how it will continue to impact it.
The Rise Of Coworking Spaces
The emergence of ‘hackerspaces’ in the mid-1990s led to the global co-working movement. According to Research and Market, the United States has 3,762 coworking spaces with an 18.30% worldwide share of coworking spaces.
The coworking space allows solopreneurs and independent professionals with similar digital technology interests to work together on projects they are passionate about while sharing ideas, equipment, and knowledge. It was in 1999 when the term “co-working” was coined by Brian DeKoven, a game designer. His goal was to create a non-competitive process that allows greater collaboration and support among traditionally isolated and hierarchical businesses. In 2005, the San Francisco Coworking Space was launched and a broader concept of coworking emerged. By 2011, the co-working space gained significant popularity in many nations across the world.
The increase in the number of startups and freelancers in the following years gave rise to the use of coworking spaces worldwide. In 2019, research studies by Coworking Resources showed that 33 percent of the total workforce comprised of independent or freelance professionals. The number was expected to rise to 40 percent by 2020. Many of these independent professionals work from the house; and, a large percentage started using coworking spaces to carry out their business tasks. Coworker projected that the number of coworking spaces worldwide would reach almost 20,000 in 2020 and cross over 40,000 by 2024. With the impact of COVID-19, the industry is expected to experience slow growth in 2020, but Coworker expects a growth rebound from 2021 onwards, with an annual growth rate of 21.3%.
How Coronavirus Had Impacted The Coworking Office Model
According to Coworking Spaces Global Market Report, the global coworking space is expected to decline by more than one billion dollars in 2020. The compound annual growth rate is expected to drop by 12.9 percent. Operators of coworking spaces have seen an almost 50% decline in footfalls.
For many companies, the unique selling proposition is providing a fully functional workspace with internet connection and shared services. Some combine it with other USPs such as providing an environment where users in the same sector can gather together. The impact of the pandemic means that offices now have to move towards providing safe independent work with the provision of a safe and hygienic work environment.
iQ Offices, a coworking office, in Canada has already reopened for non-essential services. As part of its reopening process, it has implemented new rules and procedures that allow screening, sanitation and social distancing. In a survey IQ Offices carried out, it was discovered that both members and staff wanted to come back to work, and over 90 percent wanted to be in the office at least one day a week or more.
Like many other coworking offices that are developing the right Post-COVID-19 office strategy, IQ offices has several safety measures in place. For instance, everyone is asked questions upon arrival, plexiglass is installed and temperature checks are carried out. There are also wristbands of several colors to identify those who have gone through the checks. According to Wilmott, the CEO of IQ Offices, “The way people work has changed forever.”
How Coronavirus Will Continue To Impact Coworking Office Model
The Instant Group, a workspace innovation firm, places about 8,000 companies, including Amazon, Barclays, and Shell, in serviced, coworking or managed offices. The company discovered that employers who occupied co-working space were able to respond faster to the operational and economic changes caused by COVID-19 than those in traditional workspaces. As a result, there have been several research studies carried out to predict the future of office space in general.
While the pandemic and lockdown caused a massive decline in the use of coworking space, it is expected that coworking space will continue to thrive in the near future. Independent professionals as well as remote workers who want a work environment outside their homes can use the flexibility and structure that coworking space offers.
In the same research study, Coworking Resources analyzed over 3,000 requests between February 2020 (pre-lockdowns) and May 2020 (post-lockdowns), and it was discovered that space utilization has started to recover and shift toward private offices, longer-term contract durations, and higher capacities of desks needed.
In a Post-COVID world, it is expected that the demand for coworking spaces will increase as many companies will shift to a remote work environment. Hence, the large percentage of users are expected to major corporations and big companies who want to fragmentize their huge workforce into manageable remote teams. Coca-Cola was an early adopter of internal co-working. In 2013, the company established a 70-person space at its Atlanta headquarters. It was an initiative to stimulate innovation and entrepreneurial behavior, and the space has hosted a series of start-up weekend events.
CRE professionals can continue to experiment with office designs by integrating coworking spaces within an organization’s existing office environment until an environment that is suitable for individuals and teams working in the space, especially Post-COVID.
It is expected that the regular coworking space model will change. For instance, instead of having too many people in one place in order to maximize revenue, coworking spaces will have to be spacious for individual users.
As many big corporations are looking at managing their fragmented remote large force, coworking spaces are expected to boom again.
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