CO-WORKING: Workspaces That Inspire The Millennials
With over 15 years of experience, Prashant Thakur is a seasoned corporate strategy & management consulting professional. His areas of expertise include business research, market intelligence, business writing, and content development in diverse domain.India has emerged as one of the world’s most preferred investment markets, thanks to its thriving economy, burgeoning startup ecosystem, and the ever-increasing talent pool. With businesses, both big & small, continuing to grow and broadening their horizon, an expensive real estate coupled with new-age professionals desire to work in an aesthetically appealing environment, which has spurred demand for collaborative workspaces in India. Cost-efficient, flexible and conducive environment for creativity and networking, co-working spaces are promoting a paradigm shift in the way India works. And the so-called 'Millennials'are driving this change.
The new millennial workforce will further accelerate this changing office dynamics. As per stats, millennials are set to form 50 percent of the global workforce by 2020, which very much aligns with the fact that India is the youngest startup nation in the world with the rapid increase in millennial workforce. This younger lot is ready to ditch the conventional workspaces for swankier, flexible and cost-effective spaces that effortlessly embrace the new-age technologies into their system. Thus, to meet this growing demand of the ever-increasing younger generation, India needs more co-working spaces.
Why millennials prefer co-working spaces?
GenX & millennials together have today disrupted the conventional workspace environment, augmenting a positive cultural change. For them, the office is no longer a place to sit and sneer, but rather an environment where they can enhance their creativity, network effectively, and thereby contribute to the profitability of their companies. Besides swanky spaces, the tech-savvy millennials also prefer their new workstations to be completely technologically equipped offering hyperconnectivity solutions and state-of-the-art infrastructure. And co-working spaces are offering just that. Furthermore, these co-working spaces are proving to be the best alternative for rising number of freelancers, for women employees seeking flexibility, and for those looking to be stationed at prime locales that has easy connectivity and faster commute options.
Alternately, companies aspiring to innovate and seeking to tap into the rising new generation talent cannot ignore co-working. Both big & small companies are trying to embrace this new reality of employees’ expectations and technology-enabled style of working. Accordingly, they are ready to alter their workplace strategies. They know that an innovative workstation design
focused on flexibility and interaction in a well-connected location will not only boost employee engagement, but also attract the right talent. Thus, co-working helps companies to cater to different generations by providing an alternate work setting. Other than this, they are proving to be cost-efficient for companies by as much as 15-25 percent by cutting-down their rental costs, fixed capital investments and property maintenance. Thus, co-working spaces are proving to be the Next Gen workspaces.
The Number Game!
Without a doubt, there has been an increasing supply of co-working spaces in India in 2018, but are these enough to cater to the burgeoning younger population.
Let’s Look at the Numbers First
Stats reveal that India is all set to be the world’s youngest population by 2020 with the average age being 29 years and nearly 65 percent of the total population (approx. 1.39 billion projected) will fall under the working age bracket. To cater to this younger lot and their demand for new-age workspaces, there will be a dire need for more co-working spaces in India. On the supply side, there are more than 200 players operating the current stock of nearly 390 such workspaces (both branded and non-branded) across the country. But, this number is likely to increase two to three folds over the next one to two years due to rising demand from startups, freelancers, SMEs and also large companies.
This apart, with office rents rising across India, the total space occupied by co-working spaces is likely to witness at least a 30-40 percent annual increase. And the cities that will offer the best opportunity for its increase include Bengaluru, NCR and Mumbai, followed by Hyderabad & Chennai.
"Ownership model will offer more flexibility in developing a property according to the business needs, which will reduce costs for clients, enhance flexibility and thereafter become India’s preferred default work ecosystem"
Both Big & Small Businesses to Boost Co-Working Spaces
Breaking all conventional norms, even the big daddies of the corporate world are now scouting for more flexible and cost-effective workspaces so as to cater to the growing need of their new workforce. They prefer small teams on specific projects to work in a collaborative culture or those eyeing smaller towns favour satellite offices that are cost-effective and more viable.
Besides these, SMEs and startups are also boosting demand for co-working spaces. India, today, is witnessing a proliferation of startups. NASSCOM estimates show that India will have more than 10,500 startups by the end of 2020 and will remain third only to U.S. & UK. In fact, India is the world’s youngest startup nation with >70 percent founders less than 35 years of age. This younger generation is likely to keep the prospects of co-working spaces bright in the future.
Challenges Galore
By creating a supportive environment for collaboration and innovative thinking companies may improve performance, but co-working can also expose an organisation to several risks. For companies dealing with high volumes of confidential data, sharing space with external organisations can be potentially challenging. Cyber security is today a major strategic challenge for organisations and efficient co-working spaces will need to help mitigate these concerns. More over, from loss of privacy for their employees to imbibing this new work culture for only a selected few, companies are seen to grappling with multiple challenges.
Road Ahead
Thus, despite all the teething issues that these co-working spaces are facing, these ‘cool’ offices will be the global new norm. However, co-working spaces will also need to invent, innovate and restrategize their business models in order to create a win-win situation for all. For instance, they will need to move away from the current lease-based structure to probably ownership model developed in partnership with the landowner, developer or even the space-provider. This will offer more flexibility in developing a property according to the business needs, which will reduce costs for clients, enhance flexibility and thereafter become India’s preferred default work ecosystem.
The Number Game!
Without a doubt, there has been an increasing supply of co-working spaces in India in 2018, but are these enough to cater to the burgeoning younger population.
Let’s Look at the Numbers First
Stats reveal that India is all set to be the world’s youngest population by 2020 with the average age being 29 years and nearly 65 percent of the total population (approx. 1.39 billion projected) will fall under the working age bracket. To cater to this younger lot and their demand for new-age workspaces, there will be a dire need for more co-working spaces in India. On the supply side, there are more than 200 players operating the current stock of nearly 390 such workspaces (both branded and non-branded) across the country. But, this number is likely to increase two to three folds over the next one to two years due to rising demand from startups, freelancers, SMEs and also large companies.
This apart, with office rents rising across India, the total space occupied by co-working spaces is likely to witness at least a 30-40 percent annual increase. And the cities that will offer the best opportunity for its increase include Bengaluru, NCR and Mumbai, followed by Hyderabad & Chennai.
"Ownership model will offer more flexibility in developing a property according to the business needs, which will reduce costs for clients, enhance flexibility and thereafter become India’s preferred default work ecosystem"
Both Big & Small Businesses to Boost Co-Working Spaces
Breaking all conventional norms, even the big daddies of the corporate world are now scouting for more flexible and cost-effective workspaces so as to cater to the growing need of their new workforce. They prefer small teams on specific projects to work in a collaborative culture or those eyeing smaller towns favour satellite offices that are cost-effective and more viable.
Besides these, SMEs and startups are also boosting demand for co-working spaces. India, today, is witnessing a proliferation of startups. NASSCOM estimates show that India will have more than 10,500 startups by the end of 2020 and will remain third only to U.S. & UK. In fact, India is the world’s youngest startup nation with >70 percent founders less than 35 years of age. This younger generation is likely to keep the prospects of co-working spaces bright in the future.
Challenges Galore
By creating a supportive environment for collaboration and innovative thinking companies may improve performance, but co-working can also expose an organisation to several risks. For companies dealing with high volumes of confidential data, sharing space with external organisations can be potentially challenging. Cyber security is today a major strategic challenge for organisations and efficient co-working spaces will need to help mitigate these concerns. More over, from loss of privacy for their employees to imbibing this new work culture for only a selected few, companies are seen to grappling with multiple challenges.
Road Ahead
Thus, despite all the teething issues that these co-working spaces are facing, these ‘cool’ offices will be the global new norm. However, co-working spaces will also need to invent, innovate and restrategize their business models in order to create a win-win situation for all. For instance, they will need to move away from the current lease-based structure to probably ownership model developed in partnership with the landowner, developer or even the space-provider. This will offer more flexibility in developing a property according to the business needs, which will reduce costs for clients, enhance flexibility and thereafter become India’s preferred default work ecosystem.
