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What is The Future of Coworking Spaces?

Updated: Jul 18

2022 Workplace Trends Supported by Coworking Spaces

#1 Remote, Satellite, and Hybrid Workplaces

During the COVID-19 pandemic, many companies – particularly those populated by white-collar workers – encouraged employees to work from home, under pressure from public health officials.

At the same time, the job market has shifted. After decades of fighting for wage increases and better working conditions, applicants now have more leverage. Both phenomena have forced American companies to adapt, with many choosing hybrid workplace models to support and attract employees.

2021 Hybrid and Remote Work Statistics

According to a September 2021 Gallup poll, nearly half of all full-time employees in the United States worked remotely, either part- or full-time, in the final quarter of this year. The number was much higher among white-collar workers, with 67% working from home either “exclusively or some of the time.”

While Gallup authors Lydia Saad and Dr. Ben Wigert, Ph.D., report that “remote working among white-collar workers has been steady in recent months…the percentage has dwindled since January [2021’s] to 79%. An increasing vaccination rate has resulted in a growing desire among both employees and employers “to return to the office.”

Thus, satellite and hybrid workplaces appear poised to overtake remote work in 2022; on Crexi, search interest was particularly high in cities such as Omaha and Florida metros. Gallup notes that workers who prefer hybrid models consider less time commuting and improved wellbeing as motivators. Employees also cite “flexibility to balance family obligations,” “option to work in person with coworkers,” and “feeling more productive” as reasons why they prefer hybrid workplaces.

Satellite Offices

In an August 2021 article for Investopedia, Will Kenton defines satellite operations. He writes that “a satellite operation is typically a smaller office space in a different location from a company or government agency’s main office.” Companies often open satellite operations “to reach an underserved area, expand the business, or address lifestyle and quality of life factors for employees.”

Kenton notes that during the COVID-19 pandemic, many companies were placed “in a precarious position when it comes to purchasing expensive, permanent office spaces in major cities such as New York and Los Angeles.” With the shift towards remote work came a mass migration from major metros to suburban and rural areas across the US.

In response, some companies “have elected to trade their larger properties for a handful of smaller satellite offices.”

Writing for The Wall Street Journal in her article “Flexible Offices Will Be Crowded After Covid-19,” Carol Ryan notes major companies “such as Google are opting for a so-called hub and spoke model: keeping a central office as well as lots of smaller satellite locations.”

Satellite offices with short-term leases like those offered by flexible workspace companies can help businesses expand and attract new talent in emerging markets without expending too much capital. For some, this means renting coworking and other flexible office spaces from groups like Regus and WeWork.

Solutions Offered by Coworking Spaces

Reporting on Gallup’s September 2021 poll, Lydia Saad and Dr. Ben Wigert write that “there is little agreement among employees regarding how often and when they want to go to the office.” Coworking spaces offer a solution by allowing each employee to choose how and where they wish to work.

In his November 2021 article “Coworking Spaces Offer a Post-Pandemic Office Alternative” for MIT Sloan Management Review, Travis Howell writes that some companies – like Mozilla, GitLab, Basecamp, and Automattic have even chosen to offer employees a coworking stipend.

These stipends encourage remote and hybrid workers to choose the best style of workspace for their individual needs and personalities. For example, Howell notes that some individuals who focus on community building “may prefer a smaller space with a tight-knit community; others, a larger space with a wider network of people.” On the other hand, some workers might opt for “a high-end, professional space that feels more like a traditional corporate office” in the business world with private office spaces. Still others “may thrive in a more creative space with Ping-Pong tables, beanbag chairs, and a startup vibe.”

Each employee’s background could also impact their ideal workspace, as “some employees may gravitate toward a diverse space with diverse people, while their counterparts may prefer more curated working environments.” Either way, access to coworking spaces increases the likelihood each employee will be able to create their ideal environment.

#2 Work-Life Balance and Mental Wellbeing

As mentioned in the introduction of this post, both remote and in-office workers often struggle to strike a balance between their work lives and their home lives.

Whether one works from their kitchen table or their company’s corporate office, many suffer from poor mental health due to a lack of boundaries. Other contributors to poor mental health are more situational, specifically impacting remote or in-office workers. And, of course, the pandemic has strained our collective mental health.

Thankfully, companies across the country have finally begun to address mental health in the workplace. Access to coworking spaces – especially those outfitted with green spaces and licensed childcare facilities – could serve as part of the solution to this ongoing issue for freelancers, in-office employees and remote workers alike.

Work and Wellbeing Statistics from 2021

The decline in the mental health of American workers has been well documented since the COVID-19 pandemic began.

Writing for Harvard Business Review in “It’s a New Era for Mental Health at Work,” Kelly Greenwood and Julia Anas describe a widespread phenomenon. A shocking 76% of surveyed workers “reported at least one symptom of a mental health condition in the past year,” representing a 17% increase from data collected in 2019. Even worse, “an overwhelming 84% of respondents reported at least one workplace factor that negatively impacted their mental health.” Anas and Greenwood note that “mental health challenges are now the norm among employees across all organizational levels.”

Mental Health Challenges of Working from Home Full-Time / Posed by Full-Time Remote Work

Those who work from home full-time often experience social isolation, loneliness, and burnout. In his article “Remote Workers Report Negative Mental Health Impacts, New Study Finds” for Forbes, Dr. Bryan Robinson, Ph.D. writes that “nearly two-thirds of people working from home feel isolated or lonely at least sometimes and 17% do all the time.”

When working at home surrounded by roommates, partners, siblings, elderly parents, or school-aged children, remote workers feel pressure to serve the household. This may involve helping with homework, preparing meals, doing laundry, or caring for family members in some other way. At the same time, remote workers must also meet the demands of their colleagues, clients, and employers.

Mental Health Challenges of Working from the Office Full-Time

Referencing their independent research, Greenwood and Anas note that many employees feel that “their company’s return-to-office plans [are] negatively impacting their mental health.” According to the authors, “the top two reasons given were the policies around in-person versus remote work (41%) and the lack of work-life balance or flexibility based on the policy (37%).”

Given the repeated emergence of novel COVID-19 variants like Delta and Omicron, employees planning to return to work in the new year expect their mental health to suffer if employers fail to protect them from the virus. We discuss the importance of in-office health and safety protocols later in this article.

How Coworking Spaces Can Help?

Many employers have committed to funding mental health initiatives and other supportive programs in the face of the global health crisis and the data outlined above.

Earlier this year, the American Psychological Association’s 2021 Work and Well-being Survey found that 87% of employees “think actions from their employer would help their mental health.” Interestingly, the biggest number of those surveyed by the APA cited flexibility as the best way employers could support their wellbeing.

Many coworking spaces create a certain degree of flexibility for employees and offer a much-needed alternative to the traditional office environment. They help workers escape physical space limitations of cramped living quarters, set schedules, dedicate workspaces, and establish boundaries while offering access to peers, technology, and other resources.

In some cases, coworking spaces also provide childcare, green spaces, and meditation areas to members – all or some of which could be included in a stipend funded by the employee’s company.

#3 Commitment to Sustainability

In addition to flexible schedules and mental health support, commitment to sustainability represents a third workplace trend from 2021. For nearly a decade, workers have made it clear to employers that environmental responsibility matters.

The report “Tracking trends: 30% of corporate real estate could be flexible workspace by 2030” from IWG / Regus’ Global Workspace Survey notes that “businesses are increasingly judged by their corporate and social responsibility, as well as the impact they have on the environment.”

Referencing a study conducted by Cone Communications, the report adds that “75% of Millennials would take a pay cut to work for what they deem” environmentally responsible. According to the report, “one way of minimizing a company’s negative impact on the environment while also helping to improve their work-life balance of staff is through flexible working environments” like the hub and spoke models referenced above.

As explained in our section on hybrid workplaces, “instead of having one central location to which staff commute, flexible working allows firms to establish smaller, satellite offices closer to where talented staff lives.” In doing so, each worker cuts their commute time.

#4 Health and Safety

Naturally, fourth on our list of workplace trends from 2021 is health and safety. Just as companies must support the mental health of their employees, so must they address the physical health and safety concerns posed by continuing outbreaks of COVID-19.

In their July 2021 McKinsey & Company report “Returning to work: Keys to a psychologically safer workplace,” Erica Coe, Jenny Cordina, Kana Enomoto, and Jeris Stueland elaborate. Coe et al. write that employees who anticipate a return to in-office work “will harm their mental health overwhelmingly attribute it to concern over safety and protection from catching COVID-19,” in addition to the concerns about flexibility outlined above.

According to the recent McKinsey report, “among those who have experienced negative mental health impacts of returning on-site, the top drivers have been concern about…COVID-19.” These include fear regarding the employee’s own “safety due to COVID-19 (45%) and risk of contracting COVID-19 and transmitting it to unvaccinated or at-risk children and loved ones (29%).”

In addition to “improved air filtration,” “mandatory on-site testing for COVID-19,” and “antibody testing,” a majority of employees also requested “flexible work arrangements [to] help alleviate stress” related to the ongoing pandemic. Erica Coe et al. write that “of those who have returned on-site, a majority report that flexible work schedules (60%) and hybrid work arrangements (57%)” reduced stress related to COVID-19.

Adopting a hub and spoke or other hybrid workplace models in which most coworking spaces serve as satellite offices could not only reduce employee fear surrounding the COVID-19 pandemic but also protect companies from incurring financial loss. This is because leases for flexible coworking spaces are typically shorter and less expensive than those for traditional office spaces.

Final Thoughts on the Future of Coworking Spaces in a Post-Pandemic World

With most workplace trends from 2021 revolving around the need for flexible scheduling and hybrid models, it should come as no surprise that the coworking industry is poised to grow astronomically over the next few years.

According to Cecilia Amador de San José in a March 2021 article for Allwork, the “global market value of flexible workspaces is [currently] estimated at an approximate $26 billion.” Referencing data from the Global Coworking Spaces Market 2021-2025 report in their October 2021 article, the editorial staff at Entrepreneur predicts this sector of the commercial real estate industry “will grow by $13.35 billion in the next five years.”
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