Coworking, the Next Big Thing?
The unprecedented situation caused by the pandemic has discredited a lot of theories; and has proved a lot of them right. Foremost among them was that offices are not necessary for the smooth functioning of businesses, especially in the technology and service industries. This year has proved that businesses can not only survive, but also thrive without in-person interaction among its employees. Business pundits have already declared that post-Corona the work-from-home routine will become ubiquitous. Infosys has announced permanent WFH for 33% to 55% of its employees. TCS too has proclaimed that by 2025, only 25% of their workforce will be required to come to its offices.
A global survey conducted by Lenovo claimed that 75% of the Indian respondents want to continue working from home in the foreseeable future. There are several upsides of this for the employees, including reduced commute time, more flexibility and better work-life balance. Similarly, companies will benefit from the reduced office expenses and costs of business travel.
The remote work routine also presents certain challenges for both employees as well as their employers. It is difficult for companies to measure productivity of the employees working from home. They are at the crossroads of trust and productivity. Employees, although happy with the work, are facing personal issues. In the survey, 91% Indian respondents agree that they have increased their usage of laptops during this pandemic, even higher than the global average of 85%. This prolonged screen time not only causes various mental as well as physical illnesses (loss of focus, eye-strain, sleep disturbances), but also cuts into the social interaction of the users. In an era of declining mental health, proximity to fellow humans was comforting. The ‘new normal’ robs them of this, substituting human contact with electronics and further isolating them. This will lead to poor employee morale which negatively impacts their productivity.
How Co-Working Fits into This
Co-working can be defined as a neutral workspace, occupied and shared by individuals who may be self-employed or working for different organizations. Co-working not only is cost effective because of the use of common infrastructure but it also facilitates sharing of equipment and knowledge. It is most popular with small startups who can’t afford to rent a permanent space and freelancers who needed a break from the monotony of working from their houses.
The Co-working, or shared workspaces industry has been on an upwards trajectory in India for the last few years. Coworking in India has steadily challenged the traditional office space leasing activity, having grown from an approximately 5% share in 2016-17 to about 15% in 2019. A plethora of companies have sprung up this past decade, like Innov8, Awfis, 91Springboard, GoWork India, with ever-increasing office space, customers and valuations, waiting for their breakthrough. This is evident through OYO’s acquisition of Innov8 in 2019 for $30 million and the launch of its own OYO Workspace. Similarly, In August 2019, Awfis raised $30 million in series D round led by Chrys Capital.
The dots get closer, and it becomes easier to connect them. As more and more people are working remotely, they’ll crave human contact not available in the isolation of their homes. This gap will be fulfilled by shared workspaces, and the companies providing these solutions.
These startups and their investors have hedged their bets and are waiting with bated breaths to see how the post-pandemic world will respond to shared workspaces. Thus, the co-working space is likely to witness significant growth in the future, the groundwork for which was laid by the COVID-19 pandemic.