Microsoft. Amex. GSK. Facebook. IBM. Adidas. What do they all have in common?
If you answered, ‘All of them have taken out leases in flexible working spaces’, then you’d be right (and also an absolute whizz at Only Connect).
Large corporations have become more and more interested in coworking over the last few years, with demand from corporate clients increasing 21% in 2018.
But why are these large companies adopting working environments that have traditionally been associated with freelancers and startups?
First, a few definitions. Coworking is often used synonymously with flexible workspace, which is simply office space that doesn’t involve a long-term lease. In many cases, flexible workspace is offered in a building that also provides coworking space - which is when people who work for different businesses share the same working environment. Therefore, although different companies opt for coworking spaces or flexible workspaces depending on their needs, many of the benefits are the same since these are often in the same building.
1. Flexible Working is Key to Recruitment and Staff Retention
Offering flexible working is crucial to attracting high quality candidates: in one survey, more than 80% of people said that when given two similar job offers, they would turn down the one that did not offer flexible working. It is also key to keeping staff: three out of four organisations believe that flexible working improves staff retention - not something to be sniffed at in a marketplace where it takes £11,000 to replace a worker on the average UK salary of £27,721.
Flexible working can mean many different things, but most people use it to refer to working flexible hours or working from home. However, working from home comes with significant downsides: at-home workers are far more likely to overwork and working from home is often associated with loneliness.
Enabling staff to work in coworking spaces overcomes the problems associated with working from home while still allowing employees to work remotely. The use of coworking spaces also sits well alongside more flexible hours. In one survey, more than half of corporations using coworking spaces said they turned to it in order to facilitate flexible working.
2. The Startup Culture
Coworking spaces provide a readymade culture of drive and enterprise - something that more established corporations are eager to tap into. When HSBC took a second WeWork space in London, they spoke about how stimulating it was to work alongside “young businesses that have ambitious growth plans and to get involved in that journey with them”. It’s a quick way of injecting some entrepreneurial flair into a team.
3. Workspaces Designed for Work
The most productive working environments are not just quiet individual offices or buzzing open plan spaces - innovative companies are five times more likely to have spaces for both individual and group work.
A way of balancing these conflicting needs is through a design model called activity based working, where different areas are set up for different tasks. This is linked to increased productivity and lower costs: when the National Grid remodelled four of its offices to support activity based working, individual performance improved by 8% and operational costs went down by £8 -10 million a year. Not only that, but their employees were happier with the new way of working, with 86% saying that they preferred the new layout.
However, refitting offices is expensive and time consuming, with a high specification fit-out in London (including furniture) costing an average of £139 per square foot - that’s almost £1.4 million for a 10,000 square foot project. Most coworking spaces are already optimised for activity based working, providing facilities like private booths for calls, hangout areas for socialising, meeting rooms, and even creative spaces.
4. It Makes it Easier to Manage Property
When staff make use of coworking spaces, they aren’t occupying desks in the company's existing offices. One model that fits corporates is the ‘hub and spoke’ approach, where a central headquarters is supplemented by flexible workspaces which are used for staff who can work remotely. With staff working remotely, fewer internal desks are needed and those that remain have a far higher occupancy ratio. .
If a company needs to scale up quickly or start a satellite office in a new location, flexible workspace can quickly fill that gap without the fit-out costs or long-term commitment.
5. Because They Can
For many job functions these days, all staff need is a laptop and an internet connection; no longer do colleagues need to work in the same building - or even the same country. It is easy to hop on a conference call with a team member or collaborate on a document when the traditional tools of the office have shrunk to a computer.
Ultimately, adopting coworking is one of those rare things that makes sense from all perspectives. It gives staff what they want by allowing them to work flexibly, while at the same being more economical - thanks to better staff retention and fewer direct overheads - and has less risk exposure as companies are not tied into long-term contracts.
For many companies they are embracing coworking because they’d be missing out not to.
If you are interested in exploring coworking for your company, get in touch. Desana’s app gives your business access to a network of high-quality workspaces so your employees can always work in the most convenient location.