Monday, May 1, 2023

Coworking spaces: the challenge for company loyalty

Coworking spaces are something new

Over the last year, I've spent a couple of weeks working in coworking spaces in London and New York. After spending the last week at a coworking space, I've come away thinking that these spaces represent a profound change for workers and a challenge to how companies relate to their remote staff.  

Of course, the rental office space market isn't new; it goes back decades in different countries around the world. What is new is the price, flexibility, and type of workspace. The lowest price tier offers you space in an open-plan office with good wifi, coffee, and maybe other facilities thrown in. The low price, high density, and open-plan nature of the office are what's driving the change.

(A coworking space.)

My experiences

Three things stood out for me in my coworking experience: diversity, energy, and business focus.

I was surprised at the diversity of people I met, they were a much more diverse crowd than any company I've been a part of. By diversity, I mean many things. Obviously, racial and national origin diversity; the people I met were from many different countries with a range of racial backgrounds. But also job roles, I met artists, digital marketers, sales reps, planners, and more. The stereotype is that coworking spaces are full of coders, but that hasn't been my experience. The types of business were wildly different too, everything from infrastructure to car leasing, to contract marketing, to diversity hiring. I heard some really engaging stories that have caused me to think, more so than happens from day-to-day outside of coworking spaces.

The energy was high at all times. Everyone seemed to have a sense of purpose and focus on what they were doing plus the drive to work at it. That's probably a selection bias as these spaces tend to be full of young companies and people working for themselves, but even so, it was good to experience.

Despite the wide range of businesses, everyone was focused on their customers and what they need to do to sell to them. Everyone was keenly aware of the need to make money and the mantra "everyone is in sales" seemed very true for them.

Notably, not all career stages and ages were equally represented. I saw very few people at the start of their careers, the youngest tended to be a few years out of college and on their second or third job. At the other end, I saw very few people who looked to be in their 50s and no one who looked close to retirement. On the whole, people tended to be late 20s or early 30s.

Where things get interesting are the events and services these coworking spaces provide. Many spaces offer a barista and some serve beer and wine after 5pm. I've seen wine tastings and other social events. Some places have one-off business services like professional headshots and so on. These are exactly the types of services and events companies offer to their on-site staff, and this is where the challenge comes.

The coworking challenge

All companies try to promote loyalty, which requires staff proximity and communication. Loyalty helps with productivity, goal alignment, and stability; a loyal workforce will stay with a company during tough times. Social programs, 1:1 meetings, and group meetings all help with proximity, and newsletters and Slack, etc. help with communications, but these things are much harder with a remote workforce. 

Look at what happens in a coworking space. You get proximity because others share the space with you and the coworking space runs social events to encourage mixing (and loyalty). You get communications too, many coworking spaces send out email newsletters, and so on.

Now imagine you're a remote employee working out of a coworking space. Imagine it's 3pm on a Thursday and your company is running a social event over Zoom. At the same time, your coworking space is offering an in-person social event with all the people you meet every day in the office with beer and wine. Which event would you go to?

What about lunches? Some companies offer to pay for remote employees' lunches on special occasions, but the employee has to order their lunch and submit an expense claim (effort). By contrast, if a coworking space offers a free lunch, all the employee has to do is turn up and eat. Which would you prefer?

As a remote employee, would you be more loyal to your coworking space or your employer?

What this means

There is a form of loyalty competition between the company a worker works for and the coworking space the worker uses. The coworking space has the upper hand in the way the loyalty game is mostly played today. But there are other ways to generate loyalty, for example, promotions and pay rises, training and staff development, conferences, and so on; things which add lasting value to an employee.

Companies need to realize that the remote experience is different, especially if someone is in a coworking space. If companies want loyal staff, they have to offer something meaningful because coworking spaces are using loyalty levers too and they have the decisive physical advantage.

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