April 7, 2020 Last updated April 17th, 2020 752 Reads share

How Durable Is The Coworking Model?

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The Coworking model has grown incredibly popular over the past decade, particularly since digitization has made it easier for many workers to fulfill their duties in the presence of other workers who would previously have been obstacles to productivity. Coworking arrangements that see numerous employees from various companies working together in one shared space are highly favored because of how affordable they are, but some are beginning to question the durability of this somewhat novel business model.

How durable is the coworking model, really, and how can it fare in the face of major global events like the spread of the coronavirus? Here’s a review of how the coworking industry is responding to the current economic crisis, and whether or not it will endure for long.

Coworking Companies Are Still at Work

Most of the economy in the United States, UK, and other developed states has been effectively shut down on a temporary basis. Those companies which remain are either “essential businesses” or simply find themselves violating the law and social standards amidst the pandemic. While it may come as a surprise to some, coworking companies have remained open amidst the spread of COVID-19, though their response has varied widely on a business-by-business basis.

WeWork, one of the largest coworking companies in the United States, has been taking some heat for how it’s reacted to COVID-19. The company’s claim that it’s “essential” has come under fire after the New York Times reported on the existence of an internal memo. Workers were directed to return to work in order to receive small bonuses, and those renters who didn’t show up to work for health reasons were still expected to pay their rent to WeWork.

The company has faced some particularly angry criticisms for its decision to ask cleaners to keep showing up to clean buildings, some of which may be somewhat empty. The Guardian claims that the company expects workers to use their limited sick leave or paid time off if they get sick. It also claims that the internal memo sent around by the company directs workers to argue for their “essential” nature in order to remain open, despite concerns that many of WeWorks offices are far from essential to the economy.

In the UK, coworking companies haven’t received as much criticism. The UK’s Second Home, for instance, shut down all London sites recently to prevent COVID-19 transmissions. Non-essential office space in the north of England may also be closed  for a short while, as companies in the UK appear to be taking the public health and well-being of their workers more seriously than across the pond.

Expect the Model to Endure

There’s really no denying that the coworking business model will endure COVID-19; what remains to be seen is whether or not specific coworking companies currently at the top of their industry will survive. There are many reasons to believe that COVID-19 won’t be the downfall of coworking arrangements simply because their affordable nature renders them so irresistible to startups. Entrepreneurs need to cut costs in order to earn profits for themselves, after all. Some of today’s leading companies could be permanently shuttered by this crisis, however, even as the industry as a whole endures.

WeWork is facing some seriously negative press coverage for its response thus far, for example, and it’s likely to get worse as time goes on. This is because the company was already struggling with its public reputation; as far back as 2015 it was forced to deal with very negative headlines about its treatment of cleaning staff. Now, as COVID-19 keeps spreading across the globe, we’re seeing ever worse headlines about the way they’re directing employees and cleaners in particular to behave.

But that doesn’t mean the death of the coworking model. After all, the current economic crisis we are facing, unlike the financial crash of 2008, isn’t a systemic failing of the system. It is in fact triggered by a virus which will, at some point pass, just as the Spanish flu did. Either enough people will develop the illness over time, leading to herd immunity, or a vaccine will be produced to immunise us all. At this point, many analysts predict, we will likely see a marked economic recovery and with it, the coworking sector will also grow to become more viable.

The model of shared workspaces will endure this period of social distancing, as will the desires and needs of startup owners to cut costs by finding affordable office spaces. Whether or not industry giants like WeWork get out of this with their reputations intact is a whole different question, however. As governments around the world race to pass stimulus packages and implement new quarantine measures, keep an eye on today’s top dogs in the coworking industry. When tomorrow rolls around, their commercial sector may be devoid of their presence.

modern coworking office -DepositPhotos

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