How coworking spaces create a thriving working environment

Updated: Nov 28


Coworking spaces are not a very new concept in how individuals/office operate their work. Despite that, coworking spaces doesn't have a significant market share in office space industry.

Collaborative Working environment in Area52 Coworking Space in Nehru Nagar, Bhilai (Chhattisgarh)
Individuals from varied skillsets work under the same roof

As per the report by JLL, coworking spaces have market share of around 15-20% (between Q1-Q3' 2022). For the CY 2021, the share stood at around 12-13%. Clearly, there is a lot scope of development within the coworking industry.


Cash-flow friendly

For starters, a clear benefit of operating a team within a coworking space is reduced office expenses. For companies which are operating in multiple locations, coworking spaces provide flexibility of operations for the business. Office expenses are high capital intensive affair. Office development requires a considerable amount of planning (from interior design, layout development, ensuring all the safety regulations are met and of course selection of site to kickstart office development). Thus, Office space development require a dedicated team with specific skillsets (vendor management, project planning, etc.).


An office space is developed keeping in mind the demand of the location where the office space is located. Thus, businesses are susceptible to changing market conditions. Any increase in demand require increase in resources. With businesses with their own office spaces, availability of office space for additional hires becomes a constraint. On the other hand, if the market demand diminishes considerably, there will be un-utilized office space which reduces the operating margin of the business. Clearly, in development of office space, changing market conditions plays a major role in the decision making. Moreover, the leasing period for office space are for a long period of time (5-10 years). This makes the development process even more complicated because now businesses have to develop office spaces taking into consideration the market demand 5 to 10 years down the line.


Coworking spaces tackle majority of the issues as far as costs and flexibility issues are concerned. Setup costs are negligible compared to setting up of own office spaces. This eliminates hiring resources to setup office space. Since, businesses can now avail plug and play managed office space, setup time is also practically reduced to zero. In scenarios where there is fluctuation in demand (or changes in market conditions), coworking spaces provide flexibility in increasing or reducing workspaces. Moreover, the lease/rent period of coworking spaces is less (starting from 12 months) making is easier for planning office space requirement compared to setting up of office space.


Flexible Resource Management

Post-pandemic working dynamics have shifted considerably towards Work-From-Home (WFH) style of working. From employee's point of view, WFH is cost-effective for employees as cost of livelihood is reduced drastically (no cost of renting out home, utility bills, etc.). Commute time to work is one of the major factors reducing available productive time. Moreover, studies have proven that commute time reduces productivity and increases absenteeism.

From the point of view of firms/employers, an innovative way of operating would be a hybrid model tied-up with coworking spaces. This is derived from the fact that employees will have the flexibility of WFH as they don’t need to commute to work, and for employers, managing employees will be on par with managing employees within their own office space as the employees will be working within a single space.


Moreover, with the emergence of the gig economy, coworking spaces provide an ideal platform for collaboration between firms and freelancers or third-party vendors. This becomes essential, especially in the tech industry, where there is tracking of deliverables from multiple stakeholders (say, from Product team, Tech team, or Analyst team). Teams can now operate within a single space rather than operating virtually from home. Clearly, managing resources is easier from a single space than from multiple locations (WFH), where micromanagement is high and unproductive.


But again, all fancy tales, its not smooth a transition as it sounds. There are a few measures that need to be taken before transitioning to operating in coworking spaces. Few steps to achieve that:

  • Teams’ method of operations needs to be tweaked to favor operating in coworking spaces, as working from an office is different from working from a coworking space. For example, a team lead would be required (or assigned) to oversee the operations in a coworking space.

  • A feasibility study needs to be done to make sure that transitioning to a coworking space is actually more productive or not (both in terms of deliverables and cost). A transition to coworking space is not possible in locations where there are few employees (although that is also feasible, as highlighted in the next section).

  • Creating a hub within a coworking space based on the employees’ locations For example, an enterprise that has employees from a particular state can create a hub of operations within that state.

With a feasibility study, hybrid model can be created via coworking spaces. Number of employees, location of residence, synergy with current business operations are some the key parameters which needs to taken into consideration while setting up operations in coworking spaces. 15% growth - Estimated growth rate of Coworking space industry for next 5 years (CII Anarock Dec 2021). 82% - Percentage of employees preferring WFH to WFO (Tech Talent Outlook SCIKEY).
Creating Hybrid model via Coworking spaces

Collaborative Environment

The biggest drawback of operating under the WFH model is the lack of company culture, which can only be achieved with employees working from offices. For employees, the boundary between personal and professional lives is compromised, which would lead to reduced productivity.


To achieve balance between work and home, the first step is to find a place that differentiates work and home. Cafes are good places to work, but they lack the ability for people to connect and share ideas.Coworking spaces do tackle this issue effectively. It not only provides workspace for WFH employees, but it also serves as a networking platform where people can interact with others who share their interests or come from different backgrounds.


For employers, building a hub within a coworking space allows its employees to collaborate, which wouldn’t be possible if the employees were working from home. Developing a working culture within a team in a company is possible with coworking space, as employees can work within a single space. With the current hybrid model, employers might face an issue wherein not all employees are available due to the 50:50 hybrid model (50% working from the office and 50% working from home), and it's a hassle for employees to continuously switch between WFH and WFO.


A hybrid model powered by coworking space has yet to be thoroughly tested, but it is a viable option worth considering as a resource management strategy.



What are your thoughts on Hybrid Model?

  • Current Hybrid Model (50% Office + 50% WFH) is a success

  • WFH is a success

  • A new hybrid model needs to be devised