In 2020, there was a huge decline in the growth of the co-working industry due to the COVID-19 pandemic. As countries went into lockdown, millions of people were forced to work from home, causing a monumental shift in the way we work. As a result of this changed circumstance, many businesses realised that they could operate effectively with staff working from home. Other companies are now investigating the hybrid work model, meaning less need for formal office space. These are just some of the changes that impact the co-working sector. Read on to learn more about the top trends to watch out for in 2022.
1. Satellite offices and localised workplaces
One of the major shifts that we are going through in how we work is the growth of satellite offices and localised workplaces. A combination of three factors is driving this trend. Firstly, and arguably most importantly, is the shift to hybrid work. According to a report by Accenture, 63% of high-growth companies offer employees hybrid work opportunities. Meanwhile, according to the Remote Work and Compensation Pulse Survey, 44% of employees favoured hybrid arrangements. Other surveys on working practices consistently show similar interest from the workforce in the hybrid work model. Companies that implement the hybrid work model have a reduced need for office space. Yet the majority of people still want to come to an office to work.
2. Corporate Co-working
Corporate co-working has been around long before the global pandemic. Corporate companies invented flexible, remote working schedules long ago. One of the best-known examples is Yahoo, which experimented with remote work more than a decade ago. Now that the coronavirus has fundamentally changed everything about how people work, more small and large enterprises are turning to co-working to:
- Provide support for employees who want full-time remote work
- Provide support for those employees who want to work from an office
- Ensure their office space is desensitised and de-densified
- Reduce any long-term lease commitments they have
Large, well-established companies such as Pinterest, BP Plc, Dropbox, and Fujitsu have already demonstrated how the pandemic has played a role in developing and altering how corporate headquarters are operating. For example, Pinterest terminated the lease on its corporate headquarters in San Francisco, while BP plans to sell its London headquarters. Reducing the size of office space that a company needs can generate enormous cost savings. The fact that more employers are getting rid of their office space does not remove the need for office space. As mentioned previously, most workers recognise the importance of being in the same physical location as colleagues. In this context, it should be unsurprising that global corporations are starting to use co-working space. Many corporate clients have made the switch including Microsoft, Uber, Instagram and Verizon.
3. Growing demand for flexible workspaces
Providing companies and employees with more flexibility is probably one of the most significant trends of recent years. We’ve talked a bit about the new demands from employees and how companies are reacting to these trends earlier. It’s worth quickly exploring how landlords are reacting to these demands for more flexibility too. After all, they are key stakeholders in this equation. According to recent statistics, landlords will allocate 10-25% of their property to flexible leases. The Instant Group predicted a 21% increase in flexible workplace supply for 2021, a trend that is expected to continue to grow in 2022.
4. Greater competition
As a proportion of total office space, co-working space has seen continued and sustained growth over the last decade, rising from 1.1% in 2017 to 2.1% by 2020. That figure coincides with a global increase in the number of co-working spaces. The growth in this sector is a positive for businesses that expect more from their co-working space. In fact, increasingly, these facilities provide much more than just office space. Many co-working spaces now offer various facilities including meeting rooms, spacious common areas and outdoor areas for socialisation and a bit of relaxation. As co-working expands these facilities are going to become the basic fundamentals that employees expect co-working operators to offer. Further, operators should ensure that their business has different strong points to keep tenants satisfied. Providing a unique co-working experience is increasingly important for co-working businesses, especially for those operating in first-tier cities.
Final thoughts
It’s time to start thinking about how flexible office operators can keep up with the competition as these new co-working trends start to arrive. The co-working industry has been here since the mid-2000s and has been continuously changing and developing ever since. Since the pandemic began in 2019, there has been a dramatic increase in demand from national and multinational corporations seeking flexible workspace. Many of these corporations embracing a hybrid work model, working in the office 3 days a week with their team, spending the other 2 days working from home. Collective_100 provides a boutique premium office space, that allows corporate companies to embrace this hybrid work model, setup specifically to accomodate any requirements from these national and multinational corporations. As we come out of the pandemic and into 2022, we will only see the co-working industry flourish and continue to grow. This article discussed four important trends to monitor. Those trends cover things like increased competition, the growing demand for flexible workspaces, corporate co-working, and satellite offices and localised workspaces.
