11-13 May 2021
DARLING HARBOUR, ICC SYDNEY

The future role of coworking

Aug 5, 2020 Workspace Design

It might not be time to write off coworking just yet. We could be about to enter the third wave of its evolution...

At first glance, COVID-19 might look like the end of coworking as we know it. Shared spaces aren’t necessarily the most attractive places to be during a pandemic. But this crisis and the rethinking of how we work might just make coworking more appealing than ever.

“I think about coworking in three waves,” says Julian Waters-Lynch, entrepreneurship and innovation lecturer at the RMIT University School of Management. “The first wave was about 2005 to 2014. It tended to be mostly freelancers and independent workers using spaces that were open plan and had a social, interactive character.

“The second wave, from about 2014, was when WeWork and other larger-space providers arose. Small businesses and even larger corporations started renting private offices, but many of the spaces lost their sense of community. Today, 80 percent of flexible workspace inventory is made up of private offices rather than shared open spaces.

“Now, I think we might see a third wave of coworking because there’s going to be a new surge of people who work from home and for whatever reason find that’s not optimal. I think the third wave will reanimate where coworking started: meeting the social needs of home-based workers.”

Outsourcing real estate

Sarah McCann-Bartlett, CEO of the Australian HR Institute, says coworking spaces, like other offices, will need to put measures in place – such as social distancing and cleaning regimes – to ensure they are safe for workers.

“There may be some people who decide to steer clear of coworking spaces due to fears about health and safety,” she says. “However, there will also be employees who are anxious about returning to their permanent workplace for the same reason.”

Coworking spaces may give employers the flexibility they need to meet social-distancing requirements, says McCann-Bartlett. “They may pay employees to use them as another flexible working option as they juggle too many employees for their ‘normal’ space,” she says.

In the longer term, Waters-Lynch says coworking spaces – large and small – are likely to be attractive to employers. IT is increasingly outsourced so why not office space?

“A provider can handle your real-estate requirements, allow you to scale up or scale down as you need to and give you options for sharing infrastructure or bringing your own,” he says. “Moving office space from capital to operating expenses on your balance sheet can have tax and other benefits, too.

“Employers are saying, why haven’t we done this sooner? We can save a lot of money here.”

Moving out

Three-quarters of American CFOs expect at least some of their employees to work permanently from home after the COVID-19 crisis recedes, a recent Gartner survey found. And 59 percent of workers would like to continue working from home, according to Gallup.

As more people work remotely – and potentially move out of the city to do so – that will mean another significant change for coworking spaces, Waters-Lynch says.

“Coworking will be decentralised,” he says. “Most coworking spaces are in inner-city suburbs. But I think we’ll start to see more small-scale, café-style solutions away from the big cities, serving freelancers and employees working remotely, and providing for their social and psychological needs.

“Employers could give employees a subsidy for using them. It’s not a question of, ‘Is working from home or in the office better?’ I think what’s better is giving people a choice that’s right for them.”

This is what Waters-Lynch refers to as the ‘third wave’: coworking arrangements meeting the social needs of home-based workers. Perhaps surprisingly, given the concerns some may have about sharing workspaces in the post-pandemic world, the latest wave could turn out to be the most successful yet.

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