Coworking Works for Corporate Giants, Too
How Fortune 500 Companies Are Benefiting From the Culture of Coworking
Coworking and startups go hand-in-hand. You’ve got a small team, limited funding, and tech-based work—of course you’d want to work in a smaller, cheaper space with access to other entrepreneurs.
But large companies appear to have the solution to all of the problems that coworking is trying to solve. Budget is no longer in the scale of saving a few hundred (or even thousand) dollars on rent, there’s plenty of social interaction in the office, and there are enough staff to make investing in office amenities worthwhile. What appeal could coworking spaces have for larger companies?
One factor is that multinational companies may not have a significant presence in every nation that they want to do business in. Sometimes companies need to create an outpost in a new country—a small office to set up operations and hopefully attract new local employees. However, outposts don’t always mesh well with office leases, especially long-term ones. This is where coworking is perfect: multinationals can establish low-risk, short term offices in new markets, and if business doesn’t pan out, they can cut their losses and retreat.
In this overview of the market, we see that ServCorp, an Australian coworking space with property in NYC, rents out the majority of its space to non-startups. Among others, these companies are major players in finance, real estate, and law, including the likes of Techwood Consulting and Flagship Properties. Evidently, this clientele is not what you’d traditionally expect from coworking.
According to CBRE, the commercial real estate company, this may be part of a larger trend. In a recent occupier survey that CBRE released, several Fortune 500 are relocating employees to coworking spaces. Given the companies’ size and status, this decision isn’t likely to be just for financial reasons.
One of CBRE’s directors stated that “companies are under pressure to secure talent in competitive markets and innovate faster.” For some companies, what coworking spaces offer is not convenience or cost, but rather a breath of fresh air into the company culture. It’s a natural and effective way to inspire employees to innovate. After all, a big social benefit to coworking spaces is that you’re not interacting with coworkers—you’re interacting with likeminded peers. This change in perspective encourages you to share ideas with one another, rather than to view socializing as means of networking your way to a promotion (or just procrastinating on work).
The type of employees that Fortune 500 companies want to hire are precisely the type that hang out at coworking spaces. In a very real way, the motivation and culture of these spaces might rub off on the company’s own employees.
If statistics are any indication, this trend is on the rise. Over 40% of CBRE’s respondents indicated that they were considering leasing shared office space. Meanwhile, ServCorp’s strategy of attracting corporate tenants appears to have worked for them, as they’ll be doubling the size of one of their New York locations. If large companies benefit culturally from leasing coworking spaces, others are sure to follow.