If you are reading this article, chances are that you are no stranger to the meteoric rise of the coworking industry in this past decade, both globally and in India. The number of coworking spaces in India is set to increase from 2600 in 2017 to 49,500 by 2022. This number seems especially impressive, considering that the industry has seen an increasing rate of growth every year from a humble 4% in 2017 to more than 10% in 2019. Coworking spaces now occupy a notable 12-13% of all commercial real estate, rented or otherwise. The popularity of coworking spaces is due to the challenges that the industry helps its patrons overcome. In this article, we discuss what some of those significant challenges are.
The biggest attraction of coworking spaces is most definitely its affordability. The cost of rent in office space in India has surged exponentially in recent years. This is mainly attributed to a tremendous rise in demand, especially in the premium office space segment – most pronounced in Tier 1 Cities. Bangalore witnessed a massive 17% rise in office space rent in 2019, followed by Delhi and Mumbai, which also saw significant increases of around 5%. For smaller businesses and freelancers, it is prohibitively expensive to rent an office in a business district of a major city.
This is precisely the challenge that coworking solves. As the costs are shared between so many participating businesses, coworking spaces can afford to be located at major business districts in tier 1 cities. Thus, not only do businesses get access to state-of-the-art offices at the cheapest prices which they otherwise would not have been able to afford, they get the added bonus of being situated at prime locations that offer the best visibility and attract the most amount of clients. In fact, the rising cost of office rent has seen the migration of even big corporates to the coworking industry as well, who can save upto 15-25% on operation costs with coworking. As much as 40% of the future demand for coworking spaces worldwide in 2020 is predicted to come from corporates.
Let’s face it, in today’s uber-competitive and fast-paced environment, making the right impression to your clients can make or break your business. Having at least a basic conference room, meeting area, and employee workspaces goes a long way to convince your client to trust your capabilities and invest in them during the infancy of a business relationship. A capable office can not only land you new clients, but it is essential to run a modern agile business as well. While the information age has made instant communication possible, that brings with it the weight of responsibilities and expectations that a client has for a business to be ultra-responsive. Emergency skype calls, e-meetings, and joint project collaboration over the web has become a norm, which requires a capable internet connection and audio-visual hardware.
Unfortunately, getting professional equipment and infrastructure is expensive for corporates and downright impossible for freelancers and bootstrapped startups. Coworking provides a convenient and affordable solution to this dilemma by providing access to modern, full-fledged state of the art offices. Facilities such as ultra-high-speed internet, fully-stocked conference rooms with teleconferencing equipment, lobby and reception areas, ergonomic office desks and chairs, canteen facilities, security, IT support – everything is available at a fraction of the actual cost and without long term commitments. Such modern facilities traditionally only available at expensive offices of MNCs have attracted even large corporate clients to the industry in recent years.
The traditional office setting, with its closed cubicles and departmental segregation, can often be stifling, which not only slows down decision making and communication in the organization but can decrease employee motivation as well. It has been widely recognized that a well-managed office environment can increase company performance and employee interest and motivation. Here is a letter from the legendary entrepreneur and innovator Elon Musk to his employees, asking his managers to practice free communication and an open office environment as a condition of their employment at Tesla.
An open and collaborative office environment is exactly what coworking provides. According to a survey by the Harvard Business Review (HBR), people who use coworking spaces were found to consider their work more meaningful than average. HBR also found that the primary reason people stick with coworking is that they find the culture to be collaborative and feel that they are part of a community. As coworking spaces are populated by individuals from different organizations who are not in competition with each other, the study also found that negative office politics between employees was also minimal, which provides a friendly and productive work environment.
Networking is an essential tool for both individual professionals and modern businesses. The age-old notion that it matters who you know holds considerable sway today, as an over-abundance of options has pushed recruiters and professionals to value recommendations from people already in their professional network to make a decision. The traditional office setting, however, provides inferior networking opportunities as employees rarely get to interact with people from outside their own organizations. This also results in breeding of ideas that are severely lacking in originality and out-of-the-box thinking, which are essential for businesses to stand-out from their competitors.
Coworking industries, on the other hand, are a hot-bed of networking opportunities. Professionals get to meet and interact with people of diverse expertise from many different organizations, which not only expands their professional circle but also exposes them to new industry-sectors and business practices that widen their experience as well. The Harvard Business Review (HBR) reports that heterogeneous interactions in coworking spaces can “spark new business ideas”. A 2018-19 study about networking in coworking spaces reported overwhelming positive responses from professionals – 82% of those surveyed said that coworking spaces had increased their professional network, 83% reported decrease in loneliness levels, and 64% cited the networking opportunities provided by coworking spaces as a significant source of business referrals.
One of the most widely held misinformed opinions about freelancers (held by people who aren’t freelancers themselves) is that they have a relaxed work schedule. Having hosted and interacted with a lot of freelancers ourselves, we can bust that myth with confidence. While they have “flexible working hours” and aren’t bound to the 9 to 5 schedule, freelancers working from home regularly end up working into the odd hours of the night, as they are never strictly off the clock” for clients. Studies have found that working from an informal environment like one’s home can adversely affect your psychological well-being in the long-term as you are never able to mentally switch off due to your workplace and home being the same; not to mention the ample family and social distractions that working at home brings.
Using coworking facilities provides such freelancers and independent businesses with proper office environment and a much needed work-life balance. Work stays at the office as it should, and clients understand professional boundaries and respect the fact that they cannot regularly expect to ring you up for work at home. According to HBR, being part of the coworking community also helps professionals to design “structure and discipline that motivates them”.
If you are looking for state-of-the-art coworking offices in Bangalore, connect with us at Goodworks. We are one of the market leaders and awarded as the no. 1 coworking space by popular vote. We have offices in prime locations like Whitefield, Indiranagar, Electronic City, Millers Road, Manyata Tech Park, Outer Ring Road(Sarjapur- Marathahalli), Church Street and Varthur-Whitefield.
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