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The Significance of Co-working

“Flexible workspace culture is promoting a lifestyle, not just a place to do business” (J. Brooke, Director, Business Centre Association).

The 21st century has been dominated by technological advances that have complimented the way we live, work and go about our day to day life. COVID accelerated the development of some of these initiatives which, as businesses globally return to their day-to-day workplace, necessitated a degree of a re-think around how spaces were used and the contracts that were agreed.

Over the decade preceding COVID there had been a spike in the number and size of flexible workspaces/co-working centres. These spaces were revolutionary for the time and supported the way businesses were working to afford flexibility around contract length, location, and size. Ultimately COVID impacted these centres’ offerings in the short term, but their value has been proven up as the smoke clears and business gets back to work.

What are ‘flexible workspaces’? 

A flexible workspace is typically a community-based space that can be used by a number of businesses simultaneously for a variety of different reasons, on a range of contractual terms. In some buildings this will be as simple as a shared meeting room able to be used by tenants of the building, whereas others will partner with established providers who commit to long term leases and construct multi-floor facilities, subletting their high quality spaces to smaller businesses that appreciate the flexibility afforded through a shorter lease and an easier growth path to visualise. These established premises typically provide an array of permanent workstations and offices, co-working open plan areas, and well-equipped meeting areas.

Who can use flexible space?

Just about any business is able to benefit from using these flexible offerings. For big businesses, flexible space is tactically used in different ways around the world. It is great for projects teams of up to 50 or 70 staff who will be working on a pitch or a contract for a condensed period of time (i.e. 6-12 months) as the business does not then need to expand its primary floorplate for what is a short term in the context of their main lease.

For smaller businesses, particularly those who are wary of their growth trajectory, flexible spaces provide a great opportunity to stay nimble while their staff numbers vary and uncertainty over the business’s requirement increases. Additionally, the limited capital requirement in the way of bank guarantees reduces some of the barriers to entry.

In pre-COVID times, these flexible spaces also provided a great opportunity for businesses to have multiple national or international sites, acting as a virtual office or temporary site for travel visits.

What are the pros of occupying flexible workspace?

  • You can move straight in – unlike a conventional lease or sublease where there are often lengthy legal negotiations, flexible workspaces simplify the process by reducing paperwork and limiting costs.
  • Reduced guarantees – these flexible spaces don’t require a bank guarantee to the same volume or formality of a direct office lease, which means capital preserved in your pocket.
  • Everything you need is already provided – while some directly leased office spaces require you to fit out the space – all of the amenities and furnishings are part of the package. Typically this will also include power points and an internet provision, as well as servicing and cleaning of the kitchen and facilities.
  • You can work from anywhere – if you’re in a role that has travel involved, companies such as WeWork have membership structures that allow you to utilise their other locations as you require.

What are the cons of occupying flexible workspace?

  • Mounting costs – although you will pay a true gross lease, there are often additional costs for minor things like printing, moving furniture, faster broadband and private meeting rooms.
  • Branding – being in a serviced office space, a business will often struggle to display branding that would otherwise easily be accomplished in their own private traditional space. Opportunities to personalise the space will be limited which may be a challenge, particularly if you are a trying to cultivate a strong culture or bring clients into your environment.
  • Sharing facilities – renting office space in a serviced office building comes with the fact that you have to share amenities, such as a kitchen, meeting rooms, and bathrooms. This might rule this out as an option entirely for businesses that require a high level of confidentiality. You can often be at the whim of the availability of meeting rooms, making it difficult to arrange meetings at short notice.

What is the future of flexible workspace?

Flexible workspaces boomed pre-COVID and have held their own quite well, overall, with the impact of the virus. As with anything, older facilities were shown to be more redundant and outdated, so they have failed, but newer facilities with better service offerings in great locations have thrived.

Speculation about the role that co-working will play into the future has been rife. Suggestion of a “hub-and-spoke” model for larger businesses’ secondary offices has played into the idea that co-working centres will act as a good halfway point between establishing fringe or decentralised offices on a permanent basis. In a separate line of thinking, some businesses have suggested that a company-wide ‘Work From Home’ policy may be able to be employed, with co-working centres picking up the demand for daily or weekly requirements when needed.

Whichever way it goes, in a world where short contracts and non-committal flexibility are preferred, co-working will have a strong position to fight against the traditional office model of a long term lease in an inflexibly sized space.

Not sure how much office space you need? Our calculator could help.