Coworking is the new networking for big business
From Singapore to San Francisco, big businesses are setting up in coworking spaces to mingle with nimble start-ups and early-stage entrepreneurs.
Professional services firm KPMG is one such corporation, with a number of desks leased at the Manhattan branch of WeWork, a rapidly evolving coworking giant in more than 30 cities across the globe. WeWork’s corporate clients include Merck, Dell, McKinsey & Co. and Salesforce.com, who lease desks for their employees so they can work alongside – and learn from – freelancers and small businesses.
“For corporations, coworking can offer a competitive edge, allowing them to tap into new products and ideas that wouldn’t have been possible inside their own offices,” says Karen Williamson, Director of EMEA Research, JLL.
For employees of big businesses, it can be refreshing – and a boost to creativity – to join a coworking space, where “colleagues” hail from diverse industries and varied stages in their careers.
When Microsoft shifted 70 percent of its marketing and sales team in New York City to the local WeWork, its general manager of Office marketing told Bloomberg the company hoped to “feed off the energy at every WeWork location you feel when you walk in”.
“Coworking isn’t just about the physical space, it’s about a social environment that encourages interactions and knowledge sharing,” says Williamson.
Coworking space providers strive to create that sense of community, drawing inspiration from startup culture with plenty of “breakout areas” for all things people-focused, from unwinding to facilitating those lightbulb moments. Some, including New York City’s Grind and London-based The Office Group, have apps for members to connect based on skill set.
The après-work atmosphere helps too – at WeWork, there’s craft beer on tap, ping pong tables and meditation rooms, while Amsterdam-founded outfit Spaces, home to the Dutch outposts of Facebook, Guess and Uber, holds events such as wine tastings and live gigs.
While coworking is proving popular with big businesses across industries, financial institutions have been some of the trend’s most enthusiastic adopters, despite concerns around privacy and data security.
“FinTech in particular is an area where there are a lot of new ideas happening, and established companies want to be around the start-ups making them happen,” says Williamson.
In Hong Kong, HSBC leased 300 desks at WeWork in order to “create the right environment” for its staff, while the Silicon Valley Bank, which provides financial services to life science, private equity and technology start-ups, leases desks at 16 co-working office spaces across the U.S. Its employees work next to start-ups and entrepreneurs in the very industries it operates, gleaning insight into the hurdles faced by bootstrapping CEOs – and gaining access to a ready supply of potential clients.
In Singapore, where over 20 coworking providers have launched in the last two years, the space JustCo now counts as clients Dropbox, Japanese message app Line, and San Francisco-based content delivery firm Cloudflare.
“A short-term lease commitment as provided by coworking spaces can be an effective way to test the market for an overseas company, particularly for smaller companies with big plans,” Williamson says. Companies can quickly get to know local players while on a flexible lease that can accommodate the uncertainty of how large their team might grow.
As corporate interest in coworking swells, space providers may increasingly cater for big business. Take U.S.-based provider Serendipity Labs, which offers upscale office services and enterprise-level IT to corporate clients including PepsiCo, Amazon and Deloitte. Together, these clients makes up 45 percent of its member base.
Other businesses harness the energy of coworking – and enhance their brand image – by creating their own spaces for other companies to join. The National Australia Bank and St. George Bank did just that for their small business customers, while tech consultancy Menlo Innovations added 7,000 square feet to their Ann Arbor, Michigan office to lease to entrepreneurs and startups to “spur community and inspiration”.
“As a corporate, opening up your own coworking space to other companies and people offers many of the same benefits as purchasing a membership through an external coworking space provider,” Williamson says.
By 2030, JLL predicts that 30 percent of corporate real estate portfolios will be dedicated to coworking or flexible space solutions. “Large consumers of space will seek to reduce their core space footprints, but complement them with greater amounts of flexible space,” Williamson says.
As the growing prevalence of freelance and contingent workers transforms the nature of large organization, many of those big companies are experimenting with coworking spaces to enable them to more easily scale and reduce their real estate requirements in line with changes in the workforce. .
“Companies are concerned about competing for skilled workers,” Williamson says. “Millennials in particular want agility and flexibility in their workplace.” To attract and retain these workers is a top priority for many large organizations – and a coworking space, often in a great city location around energized peers, is increasingly part of the package.