It’s a new business model that is emerging within the property industry around the globe. It is referred to by various names, namely. Co-working workspaces, on-demand workplaces, shared offices and so on. The workspace model is gaining momentum due to the rising costs for real estate. It’s also extremely effective for businesses who don’t want to bind themselves by long-term lease agreements and instead prefer to have a flexibility in their cost structures. In this article, we’ll take a closer look at the trend of shared offices.

Common Reasons Companies Opt For Co-Working Spaces

• Cost: This technique is especially useful for companies that are just starting out. The majority of startups nowadays are in the high-tech area. That means they require offices equipped with features like video conferencing, VOIP based phones, internet line leases as well as other. However, the process of establishing the entire infrastructure by hand is quite costly for startups that are often in need of cash. Therefore, it’s financially and practical to utilize this plug-and-pay system to rent office spaces. If you are a start-up company, it will cost more per month. However, larger corporations discover this model to be less expensive by about 25%.
• Infrastructure: Coworking spaces enable the price of operation to be cut without impacting the quality of infrastructure. Most co-working spaces have conference rooms, and sometimes even video conference facilities. The infrastructure is ready for use starting from the beginning. They are able to concentrate on the primary tasks carried out by the company rather than doing administrative tasks that add the time and expense, but don’t provide any value for the client.
• Travel Convenience: A lot of multinational companies select this method in Tier-2 cities and Tier-3. This is due to the fact that these businesses do not require a complete offices in those cities. Instead, they employ the capacity comprising 10 to 15 employees. They don’t want to reduce the quality of offices or the facilities they offer to their employees. They also want office spaces that are located centrally since, most of the time, employees are part of their sales team and have to travel a lot. It is because of this that shared workplaces are an option. Infrastructure is shared by other teams. It’s just that these teams could be part of an entirely different organization.
• Shorter Commute Times: People in cities have a hankering to spend long hours traveling to and from work. Along with a 9-hour working day, Many people also spend an additional four hours driving between work and home. This time spent commuting does not provide any value and must be cut out. One method of reducing this issue is to implement shared workspaces. Workers are not required to travel to a single location to work. Instead, they should be able to access the closest shared workplace center. The time saved by not having to commute leads to greater productivity of employees, who are able to perform longer hours on tasks that add value to the company.
• Flexibility: The growth of a company can be an issue for logistical reasons in conventional offices. For example, a business might want to expand its staff strength by ten people. However, they are unable to rent an additional space with only 10 more employees. They will have to lease an entire office space. In addition, they need to expand the space and make sure that they have ten employees who can fit in the office. With co-working spaces, this won’t be the situation. Businesses can lease the amount of desks they need and for the precise amount of time they need.

Issues with Workspaces that are shared Workspaces

• Cost Allocation: Sharing costs for a shared workspace is a difficult task. In a fully-leased office, the business pays for all water, electricity and power bills, property taxes, etc. In an office shared with others, the costs have to be divided. This is where disputes begin to occur. Certain businesses believe that headcount is an appropriate way to determine the cost allocation. However, some companies might believe that headcount is a better metric. Additionally, because the cost is shared among companies, they do not have a reason to reduce their use of water, electricity or any other precious resources. Developers attempt to avoid this issue by including these costs into lease rates. But, this causes waste of resources, and may lead to disputes in a lot of instances.
• Privacy: The shared workspaces are more affordable and might have a more infrastructure. But, many companies will not be comfortable moving their most important operations in such spaces. The reason is quite simple. There is a good possibility of data or intellectual property being taken. If the business plan of a business is revealed to competitors, it might be unable to maintain its competitive advantage. The model of shared workspaces, by definition, can’t solve this issue.

Future workspaces could be a blend of these two models. Work that is routine and mundane that isn’t mission-critical could be carried out in shared workspaces due to the their lower cost and other advantages they provide. However, more complex tasks that require sensitive data and strategic information could be assigned to shared workspaces.