Can a trend that relies so heavily on socializing and collaborative work survive at a time of unprecedented social distancing?
The short answer is: “Yes.”
The reason for this optimism is the incredible resilience the coworking industry has shown over the years, plus the fundamental appeal it has to modern workers that no single event can overturn.
Coworking growth before COVID-19
Coworking as a concept started in 1999 when Blue DeKoven coined the phrase “coworking” as a way to describe a group of strangers working together as “equals”, instead of the traditional hierarchical structure found in companies.
The last 20 years leading up to COVID-19, the industry has seen explosive annual growth. While initially concentrated in North America and Europe, coworking spaces have spread to all corners of the world in recent years, with Asia leading the number of total spaces since 2019. By 2022, it’s estimated the number of coworking members will have swelled to 5 million, double the number in 2017.
Then COVID-19 hit.
Why coworking will overcome the pandemic
In the short-term, there’s no doubt that coworking spaces will continue to suffer from the ongoing pandemic.
As a flexible, short-term real estate operator, coworking spaces are extremely reliant on short-term revenue to pay off leases on the land or space they rent. With strict social distancing protocols in place, demand for coworking spaces has plummeted, resulting in many closures, such as the recent high profile closing of The Wing.
Despite the short-term challenges, there are two main reasons to be optimistic about the future of coworking spaces.
Throughout its short history, coworking operators have shown that they can adapt to changes to their surroundings and demography in order to flourish. This can be seen in specialized coworking spaces that have flourished in recent years catering to women, legal professionals, dog devotees and more, each with unique offerings and configurations specific to that industry. In other words, successful coworking operators know how to pivot to meet the demands of the market.
Since COVID-19, many coworking spaces have begun implementing safety guidelines that resonate with their customers.
One good example is MakeOffices, a large coworking operator with spaces in many cities across the US. The company is adopting a two-pronged approach to alleviate members' concerns while introducing new revenue streams.
The first is a comprehensive set of policies for members returning to one of their physical locations. They include:
- Safe distancing: all chairs in communal tables have been spaced 6” apart. New limits on the overall number of people allowed have also been put in place
- Frequent sanitizing: medical grade disinfection is used frequently throughout the day by staff to sanitize all public areas, especially high touch points such as door knobs and printers
- PPE equipment: all employees are equipped with and required to wear PPE equipment in all common areas
In addition to the strict safety processes, MakeOffices has also introduced a “virtual office” plan to attract and retain customers that aren’t ready yet to venture out. Costing $75/mon, it includes services such as:
- Physical mailing address for mail purposes
- 2 hours of conference room time
- Monthly networking events
Virtual office services may emerge as a key driver of growth for coworking operators in the post COVID-19 world due to their scalability.
Accelerated shift towards remote working
Another reason to be optimistic about coworking spaces is the accelerated shift towards remote working that’s happening right now.
For coworking operators, while the epidemic has devastated overall attendance in the short-term, it’s also introduced remote working to millions of people around the world.
During the onset of COVID-19 in February, millions of employees in China were forced to work from home, creating the largest work-from-home experiment in the world. Since then, many more millions of workers from every continent have found themselves working from home for the first time. The overall positive outcome with remote working for both companies and workers has created a seismic shift in how traditional companies now view the whole concept of working remotely.
As “La Station”, a coworking operator in Canada shares in an interview on Coworker.com:
This could have a positive effect now that companies know that their staff can actually work outside the office and still be productive.
The long-term windfall for coworking operators can be tremendous. Pitted against working in a traditional office and from home, coworking space comes out favorably on both fronts in many studies.
According to ValuePenguin, companies with less than 12 employees can save an average of $2,700/mon by using a coworking space instead of leasing an office.
And while working from home has its unique benefits, for many people, the novelty seems to wear out as burnout and loneliness sets in. According to one survey, 52.9% of employees from companies such as Google, Facebook, and Amazon felt the ill effects of being alone. This is in direct contrast to coworking members, where 83% of participants in one survey said they felt less lonely since joining a coworking space.
COVID-19 has thrust “remote working” into the consciousness of millions of companies and employees. Due to this, coworking companies are primed to reap the benefits in the coming months as a result.
Down but certainly not out
Despite the tremendous setback coworking spaces have suffered, the industry won’t only survive the current challenge, but rebound stronger than ever in the next few years. With millions of people working remotely for the first time, a new generation of coworking spaces is perfectly positioned to capture that new market.