How Do Coworking Spaces Benefit?
There are multiple reasons why corporate companies are increasingly choosing to use coworking spaces, but how does this benefit the provider of space?
Improved Service Levels
There are many benefits of hosting corporate members. First and foremost, corporate members have high expectations in terms of service levels and standards. Although there is greater pressure to meet these standards, there is the added benefit of truly raising the coworking bar when they are met. Providers of coworking spaces must ensure the employees of corporate companies are safe, comfortable and productive. From environment and design to service and professional amenities, how should a coworking owner react to the pressure to meet such standards?
Serendipity Labs claim “these demands have propelled us to continue to raise the bar on our service delivery to not only meet, but exceed expectations. This benefits all of our members. Corporate business is easier won than kept, and we are thrilled that corporate teams continue to turn to us as their solution.”
This exact sentiment was also emphasised by Mindspace, who reinforce that “given the stricter needs of large enterprises for network connectivity, privacy, and security, they drive our product forward for the benefit of the entire community.”
Increased Occupancy Rates
In the US, new policies mean there could be a significant rise in the take up of space by corporate companies. This is thanks to the Federal Accounting Standards Board, who have introduced a new rule requiring companies to post leases against their profits by disclosing lease liabilities as debt on their balance sheets. This takes effect in 2019 and completely changes the equation for companies who will no longer be able to keep leases on a separate spreadsheet.
As a result of the new policy, many companies are now avoiding signing big, traditional leases and are actively trying to escape any leases they may be tied to in the long term. Susan Harrison from Serendipity Labs explains that “established companies are introducing policies to reduce conventional office lease obligations, especially with small leases under 5,000 square feet. Companies will now make even better use of coworking memberships, since those active for 12 months or less do not have to be disclosed under the new guidelines.”
Anchor Members and Added Value
Corporate companies can add value as anchor tenants, helping to attract new members by diversifying and extending the existing service offering of the coworking space. KPMG UK is a prime example. Their ‘High Growth’ team works from numerous coworking spaces to support innovative scale up businesses and aid their growth. Having built a specific ‘coworking route to market model’, they work directly with coworking owners to deliver support to members.
KPMG’s Director of Coworking outlines their strategy: “We identify teams of individuals who are complimentary to the space and task them with getting to know all the business owners. They then make new connections as appropriate, build relationships and roll out education. Even if businesses don’t yet know what type of support they need, that’s when the magic happens! ”
It could be a win-win situation as KPMG simultaneously benefit from a vibrant market of businesses, not just because they understand them, but because they work side-by-side. With 15 employees working from 3 coworking spaces in London (LABS, Second Home and Office Space), KPMG has plans to have 30 employees throughout 6 spaces in 2018, in addition to other sites outside London. Their Global member firms also use coworking spaces, most notably teams in Israel and the United States. Kirsty states that “people want to be closer to their clients, closer to the market and closer to disruption – regardless of industry. What better way to achieve these things than to be sat in the middle of them?”
Retention of the Millennial Workforce
The Millennial workforce can be retained by spaces embracing corporate firms. In the words of Mindspace, “Millennials make for the lion share of both startups and enterprises these days and it’s their values that influence their work values. People today want more flexibility in their workplace and work hours, they want to connect with other people openly, they want to develop themselves personally and professionally, and they want to work to live (not vice versa).”
Company coworking spaces like Mindspace design their business to embrace such values. As an integral part of the coworking membership, Mindspace offers community meetups, workshops, social events, wellness classes and on-site gyms. As a result of this, they are successful in attracting Millennial managers and forward-thinking enterprises to enjoy the future of work.
Serendipity Labs add that “large employers are keen to respond to employee desires by adopting modern work values through the implementation of structures including remote and flexible working.” This is no surprise when, according to research by Gallop, the highest employee engagement is seen amongst those who work remotely up to 20% of the time.
Utilization of collaboration spaces
Whilst smaller coworking spaces may not have space to accommodate large teams, their spaces are still utilized by corporate companies for events and meetings. KAPTÁR recently started a pilot project with local and multinational corporations, allowing their employees and clients to use meeting rooms, community areas and event space to experience the coworking environment.
Matild Márta from KAPTÁR’s Community Team emphasises “coworking is still a novelty for many companies in Hungary. They are still discovering the potential it brings in terms of atmosphere and collaboration with freelancers, frsh talent and innovators with special industry knowledge. We’re planning to turn this intrigue into memberships and widen our clientele by improving our offerings for the corporate segment.”
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