The coworking revolution – how office work is changing
There are currently more than one million people working in various coworking facilities. This particular change in office work can be traced back to 2005 when the world's first coworking space was launched in San Francisco. In 2010, the number of people coworking had reached 22,000. According the international coworking survey conducted by Deskmag in 2017, the growth in the number of professionals using various communal work spaces shows no sign of slowing down.
It would also appear that investors are also sharing this growth expectation: the Japanese-based SoftBank invested 300 million dollars in WeWork, the world's largest coworking business, with a valuation of nearly 20 billion dollars. In August, SoftBank invested another 4.4 billion dollars in WeWork. The commercial property markets in Finland have also taken note of the global trend.
Coworking facilities operate in multispace offices, including various desk and work spaces, meeting rooms and quiet rooms and zones. The biggest pros of the multispace office are the communality it can create and the increasing communication between the users of the space. From a business perspective, a multispace office is very efficient in terms of space, as the need for floor area may be less than half of that needed for a conventional office. This efficiency can be capitalised on either through lower overheads and/or relocation to a more prestigious area, which helps improve the public image of the company.
Coworking spaces differ from typical office layouts in that they typically house several companies under same space. Coworking is about meaningful encounters between people from different companies, allowing for ideas and creativity to flourish. The premises are maintained and managed by an operator who liaises between the property owner and the users. The operator signs a long-term lease and offers the tenants various agreements subject to monthly charges. The operator of a coworking facility plays a key role as the developer and realiser of the service concept. For many coworking spaces the tenancy includes various benefits, such as the Internet, furniture, refreshments or events, that normal offices or office hotels are not necessarily able to offer.
Change at work
The change in the way we work in the office is the result of the wider transition in the nature of work, which has altered significantly due to globalization and the digital age. Thanks to the developments in information management and communication, we are no longer tied to place or time in the way we used to be. Moreover, employees are increasingly seeing their working environment as part of their package and it may play an important role when competing for the best talent. The change is also driven by the rapid increase in the number of SMEs, who currently employ more than 60 per cent of private business sector employees in Finland.
Another major factor is the generation shift in workplaces. The number of millennials has now exceeded that of baby boomers among the global workforce. By 2030, 75 per cent of the workforce will be millennials. They value flexible working hours but also an active approach to work. They expect to have access to the latest technologies and their employers to provide motivating and inspiring working environments. These new expectations will inevitably lead to a demand for new types of spaces.
Large corporations around the world are showing interest in coworking environments, and companies such as Bank of America and Microsoft have already moved into spaces run by outside operators. In a rapidly changing world, signing long-term leases is regarded as a risk. It is more desirable to be able to reserve spaces for teams possibly only for the duration of a single project, in which case the flexible terms offered by external operators provide an excellent alternative.
In Finland, the coworking space markets are still fairly fragmented, as the whole concept is still quite new. However, there is every reason to expect that coworking spaces will start cropping up especially in larger cities. Many large companies have converted or are about to convert their offices into multispace facilities. Usually, the easiest way to switch over to multispace working is in conjunction with relocation, when there is a better chance of finding the optimal property and location.