Authored by Manas Mehrotra, Chairman, 315Work Avenue
The coronavirus outbreak has globally disrupted the business cycle leading to a slowdown. Resilience of business models, resourcefulness of the teams, and responsible cash management of the companies are put to test. While concerns around Covid-19 have also led to reduced footfalls in co-workspaces which have been growing at a rapid pace for the last few years, this blip could be temporary and last till precautions are deemed necessary.
As coworking companies navigate the great unknown, not all remote workers have access to the amenities they need to productively work from home, making coworking spaces appealing during this time of crisis. Many businesses will now seize the opportunity to rethink their working arrangements to provide more flexibility to their employees than ever before, especially considering the benefits of productivity and engagement, and, this will push up the demand for co working spaces. Once the pandemic passes, more businesses will more likely give flexible working arrangements the tick of approval, which would include shifting away from traditional office spaces to more co-working spaces. As long as hygiene practices and health precautions are enforced, coworking spaces provide an alternative for businesses in need of a substitute workspace that may prove useful.
Once the lockdown period ends, companies would also lay more emphasis on cost optimization and prefer flexible workspaces. Most corporates would avoid capital expenditures and look to co-working facilities to expand their business. The co-working industry might also see some consolidation soon and companies will explore acquisition opportunities. The current situation will also see larger enterprises seeking smaller spaces to ensure synergized business continuity in the near future.
People need options and access to a collaborative environment is needed for success in life and work. It’s an opportunity to show how the coworking models can also offer new solutions and make our economy more resilient in such circumstances. Hence a silver lining in all this is that this has offered coworking providers an opportunity to re-think their strategy and make the segment more attractive for consumers.
Longer-term innovation and changes in trends will come about as businesses try earnestly to normalize the impact of the current crisis caused by the pandemic. A recession usually brings about an acceleration in business model change, driving down costs and such pandemics definitely tend to enable entirely new categories of businesses. Companies, particularly start-ups tend to innovate with new ideas for survival and expansion. The shifts will continue, creating a long-term digital disruption that will shape businesses for decades to come.
Coworking companies will score high on the social quotient and it’s only a matter of time before coworking spaces churn out in a new form. Once the isolation measures are reduced, flexible working will emerge stronger than ever and we anticipate a strong desire for startups and entrepreneurs to have access to fit for purpose office facilities with community support, collaboration and knowledge sharing provided by shared spaces. Moreover, not only the startups but SMEs and giant players might also prefer coworking spaces in the near-term.
In the backdrop of the COVID-19 pandemic, while the businesses may reel under pressure temporarily, investor sentiment remains buoyed and the commercial operators are hopeful of better days ahead. The COVID-19 is certainly not an end to the co-working culture as people would discover that the benefits of social gatherings in terms of emotional and intellectual fulfillment would be a crucial necessity for the overall health of a society.
