The Pros and Cons of Co-Working

What is coworking? 

Coworking is when people work in the same neutral space on independent projects or in smaller groups on the same projects. These people generally work for different companies, which is one way a coworking space differs from a regular office workspace. Coworking offices are often used by freelancers, startups, small businesses and nonprofits, which can save bundles of money by avoiding pricey, long-term building leases while allowing professionals to experience a sense of community. 

Coworking locations can range from providing basic amenities, such as desks and Wi-Fi, to offering more high-tech resources, such as 3D printers. 

Types of coworking

There are four main types of coworking setups, with each offering a different kind of atmosphere and community:

• Open workspaces: As the most conventional type of coworking setup, open workspaces offer a communal place for workers from all disciplines to set up shop temporarily. They provide a collaborative environment for entrepreneurs, startups with small teams, and remote workers looking for a work environment that encourages networking. However, open workspaces don’t offer much privacy.
• Private workspaces: Private workspaces offer short-term office space to larger teams — typically those with more than eight people — making them ideal for companies with trade secrets, proprietary technology or other confidential information. These spaces are often individual suites rented inside a broader coworking space and include private amenities such as meeting rooms and kitchens.
• Industry-specific workspaces: Although they’re less common than open workspaces, industry-specific workspaces are tailored to specialized fields, providing professionals with private spaces packed with tools and advanced technology.
• Venture/incubators: Incubators offer early-stage startups a collaborative environment with a mentorship approach, providing budget-friendly office space and access to valuable networks. Accelerators provide intense, short-term training through venture capitalists or investor groups while offering a collaborative environment tailored to entrepreneurs’ needs.

What are the pros of coworking?

Here are some of the benefits of coworking.

Sense of community 

Working in a shared location with other entrepreneurs can provide a sense of community. Although members may not be working together on projects or even for the same company, coworking spaces often attract people with similar interests or jobs. These individuals can therefore serve as a built-in network. You have the opportunity to form bonds and working relationships with other professionals that can serve you and your business as you grow, and you have access to a wider network for collaboration, mentorship and support.

Increased productivity 

Working for a small business or as an entrepreneur often means working from home, which can be productive for some people but difficult for others. Roommates, chores and other distractions can hinder your focus when you’re working in the same space where you live. 

In contrast, coworking spaces offer different settings and typically include amenities that someone might not have at home. Additionally, working alongside a community of similarly ambitious professionals can serve as motivation to get work done efficiently and productively. 

Networking and collaboration

There are endless opportunities for professionals working in coworking spaces to network and collaborate with other like-minded individuals. Because coworking offices are filled with people with similar drives and passions, many workers will bounce ideas off of one another. Coworking providers often hold networking events and workshops that can help businesses and organizations make personal connections and learn from one another.

Inspiration and creativity

Another downside of working from home is a lack of inspiration, motivation and creativity. Staying in the same location throughout the entire week, especially when it’s also where you sleep and live, can create mundane routines and even affect your mental health. Coworking spaces help you get out of the house and surround yourself with new and friendly faces. These individuals might even help get your creative juices flowing, as they can provide you with unique insight and perspective.

Greater flexibility

Coworking offices allow people the flexibility to create their own schedules based on what fits their daily needs. You can come and go as you please. In addition to offering flexible work schedules, coworking spaces are often lenient with their agreements. If you eventually decide that a coworking setup isn’t for you, you can likely cancel your membership without penalty.

Cost-effective workspace

Coworking spaces can be cost-effective for small businesses and startups, as they often do not require a long-term lease. This allows companies to continue growing without the added pressure of office relocation or additional workspace expenses. Businesses can then use the money they would have earmarked for a traditional office space to further invest in their company. 

What are the cons of coworking?

While there are obvious advantages of coworking, consider these disadvantages before you decide whether it’s the right option for you.

Too much noise for calls 

One of the downsides of coworking spaces is that furniture isn’t the only thing that’s shared; sound is, too. Typically, people will be having conversations and making phone calls nearby, which can become a distraction. Private offices are sometimes available at an extra cost but are not always guaranteed due to limited space. Some people might thrive with this kind of noise, while others might find it exhausting and depleting.

Distractions

Besides noise, there can be distractions from social encounters. While a socially oriented work environment provides a strong sense of community, it can also cause several interruptions throughout the workday. This can be especially problematic for those who are naturally more social or easily sidetracked.

Lack of privacy

If you’re worried about a lack of privacy, a coworking environment may not be the right fit for you. Private offices can be hard to come by and cost extra in the long run. That means you will likely be working in the same shared space as other individuals, making it difficult to have private phone calls or discussions with clients. This could be a dealbreaker for those who regularly deal with sensitive and confidential information.

Limited capacity

Remember your school or college days? The library probably had that one table beside the window with a perfect view; you were lucky if you could snag it for some study time. Similarly, coworking spaces often provide excellent amenities, but you might not get your favorite conference table for your next meeting. To ensure prime areas are available, you may need to adjust your work schedule or use the facility only during less-busy hours. 

IT issues

Although a coworking provider wants to keep its clients happy, it may not provide the internet speeds you desire or other technology that’s essential for your work. It is also unlikely that there will be an in-house IT expert to troubleshoot problems. If the internet goes down, a printer breaks or some other issue arises, you’ll likely be at the mercy of the space’s administrators or forced to find a temporary alternative workplace.

How popular is coworking?

Companies have revamped their office structures to accommodate lifestyles that no longer require a commute to an office. Hybrid models, in which employees come to the office only on certain days of the week, cater to the changing needs of today’s workers. 

These models have become widely popular across the U.S. job market, with 89 percent of the full-time workforce supporting some form of hybrid, remote or four-day workweek options, according to Bankrate. This may be a reason not to commit to a private office building for your business. 

Employees’ willingness to embrace hybrid work models continues to drive more opportunities for coworking solutions. The first quarter of 2024 showed 6 percent growth in coworking spaces, with 346 locations added across the country, CoworkingCafe reported. 

As you might expect, major cities like Los Angeles and New York continue to lead the coworking space market, with 270 and 263 locations, respectively. However, other markets are also coworking hubs, with Salt Lake City, Minneapolis-St. Paul and San Diego showing growth up to 15 percent. These markets provide ample opportunity for those considering the coworking model. 

What is the future of coworking?

Despite the onetime billion-dollar coworking company WeWork’s 2023 bankruptcy filing, the market’s future continues to trend upward. By the end of 2024, there will be roughly 41,975 coworking spaces across the world, Statista reported. The coworking space market, valued at $10.81 billion as of 2023, is expected to more than triple by 2030, reaching a projected value of $36.92 billion, according to Next Move Strategy Consulting.

The coworking market is expected to see big changes, with providers focusing more on a community-based approach that offers networking opportunities and relevant events to its members. Many coworking spaces will also concentrate on catering to niche segments and extending their reach outside major markets. 

Artificial intelligence (AI) will likely continue to play a big role in the future of coworking spaces; in fact, many coworking providers have already begun to integrate it for various purposes. With AI, coworking providers can access insights that improve operational efficiency and optimize space usage to prevent overcrowding. They can also employ advanced features that provide a better customer experience, such as facial recognition access, automated scheduling options, and personalized temperature and lighting settings. 

In the coming year, we expect that coworking spaces will continue to leverage these technologies to improve their offerings.