CREJ - Building Dialogue - March 2017
The picture has been clearly painted: We are at the threshold of an intense talent war. Not only is good talent going to be increasingly hard to find considering the global workforce crisis, but also of the existing talent pool, 87 percent self-reports that they are passively or actively open to a new employer. No wonder Forbes says leadership’s top leadership concern in 2017 should be laser-focused on talent retention. Both shrinking and diversifying, without a doubt – the talent pool is rapidly shifting to an unprecedented state. As the talent pool plummets to the staggering global deficit in 2020, another facet has reached a record pique. Over half of our work force in 2020 will identify as freelance, independent or contract, all part of what is called the contingent workforce. Helping to drive this expansion is the growing class of entrepreneurs who work as sole practitioners in their own business ventures – known as “solopreneurs” – as well as those who take on part-time independent assignments – sometimes referred to as “side-giggers.” The 1099 worker is outpacing the W-2 employee, per the U.S. Bureau of Labor Statistics. Why the shift? The contingent worker cites many positive benefits of their independence, from a heightened sense of control in their life balance, increase in revenue and swell of network, and feeling healthier and happier on their own. As for the physical workplace that serves these entrepreneurs, a multitude of alternative, on-demand spaces, called co-working environments (or incubators, ecosystems, etc.) seem suitable for serving a broad range of both start-up and tenured businesses. Users can capitalize on the opportunities of flexibility, enhanced community and shared resources. Businesses of all sizes and types – ranging from small start-ups to global enterprises – choose to locate employees or teams in shared work environments, either temporarily or on an ongoing basis. The Evolution of Co-working The global co-working movement can trace its origins to the emergence of “hackerspaces” in the mid-1990s. These open workplaces provided physical spaces where people with common digital technology interests could gather to work on projects while sharing ideas, equipment and knowledge. Brian DeKoven, a game designer, coined the term “co-working” in 1999, identifying a working style to facilitate collaboration and meetings. A few years later, a broader concept of co-working emerged with the 2005 launch of the first official collaborative workspace: the San Francisco Co-working Space, located in the city’s Mission District. Presently, the number of co-working spaces around the world has increased by nearly 700 percent since 2011. Globally, an estimated a half-million people work in more than 7,800 shared workspaces today – a number that is expected to climb to 37,000 over the next two years. Surprisingly, more than half of the users are from mid- and large-sized corporate organizations. Organizations encourage employees to work in co-working spaces for a variety of reasons – primarily to foster creativity, network, recruit and learn how to emulate the “start-up vitality” back at their corporate locations. They have chosen co-working strategies as part of their supplementary, and sometimes even primary, office solutions to anticipate positive results toward: • Attraction and retention • Innovation • Enhanced community • Improved space utilization • Optimized productivity Additionally, as businesses seek to attract junior-level employees to their organizations, they are discovering the importance of replicating the environments offered on today’s college campuses, where an estimated one-third of U.S. business incubators are located. Influenced by their campus experiences, millennials are entering the workforce with an expectation that they will have access to similar environments where they can collaborate, explore and create. What space strategies can we emulate from co-working spaces? 1. Build community through purposeful space planning and events. 2. Develop a strong culture with a clear sense of identity. 3. Foster creativity to support innovation. 4. Provide a place (or places) for focus work. 5. Create opportunities for planned and serendipitous interactions between members of the co-working space and general community. The Bottom Line Why should CRE executives pay attention to co-working environments? In short, because people are a company’s greatest investment, and their productivity and satisfaction are key to the organization’s future performance and overall competitiveness. CRE and facilities departments that embrace co-working as a practical real estate strategy can contribute to improving an organization’s overall performance by providing flexible, productive work environments that foster collaboration, innovation, extended networking and passive recruiting. As co-working principles continue to evolve and influence broader “co-learning” and “co-living” concepts, businesses that integrate these progressive strategies into their own enterprises will be well equipped to meet the needs and expectations of the future workforce. To learn more about the talent, workplace and real estate strategies related to co-working, read the full white paper on Knoll.com/research.