Author’s Blurb: Coworking spaces haven’t been immune to the effects of the MCO, as many, if not all, offer flexible membership options which can be terminated easily, and depend on renting out their event spaces for revenue. Both of these revenue streams were hindered as more people began WFH and events were banned.
The global economy is already in recession thanks to COVID-19, according to economists based in the Americas and Europe polled by Reuters.
Malaysia is also now weathering its worst economic recession in its history, and this has affected the nation’s gross domestic product (GDP) and contributed towards a rise in unemployment, said Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz.
It’s no secret how hard businesses across various industries have been hit by the MCO, and lots of team and operational restructuring have happened in the span of a few months.
But while coworking spaces are also facing reduced revenue, they may be one of few businesses who will actually benefit from a recession.
“During a recession, everyone will be looking for ways to sustain their business and survive, they are prone to do more research into what can be done to save on overhead costs, reduce risks, conserve cash, etc.,” She Mun of Colony told Vulcan Post.
“And when it comes to evaluating their office options, especially those who are stuck in a traditional lease, coworking fits the bill.”
But Everyone Can WFH Now, Right?
Yes, one could argue that more companies are seeing WFH as a viable and attractive working option for the immediate future. Overseas, Twitter is allowing its employees to WFH permanently, while Google and Facebook are extending their WFH policy to 2021.
In Malaysia, Permodalan Malaysia Berhad’s (PNB) president and CEO Jalil Rasheed said that the company will be allowing WFH as a permanent option for employees.
She Mun said that businesses are definitely starting to realise that they could have their team WFH rather than in a permanent physical office space, but that it’s only a short-term solution.
“At some point, people would have to work somewhere other than home, we’re all social creatures and are built this way,” she shared.
“We work better with people we build bonds and relationships with, things that you can’t do as effectively over a conference call.”
And I agree with her. After WFH for nearly 2 months since the MCO started, I can’t even begin to tell you how much I miss our office space and the interactions that happen within it.
Furthermore, some of our homes just aren’t built as proper working environments. Take mine for example, with its myriad of coffee tables all over and no study tables. I’ve been working at my dining table in an uncomfortable chair throughout the MCO, which has impacted my productivity at times.
Well Positioned To Serve
So, how do the above translate into benefits for coworking spaces then?
Aside from being designed for work purposes, coworking spaces also provide companies that newfound need for flexibility. This is an attractive option for companies who want to mitigate risks and are wondering whether to commit to a traditional lease.
“People will avoid 3 to 5-year leases and prefer to do 1-month, 3-month, or 6-month leases for that flexibility,” She Mun stated.
“Businesses can achieve considerable savings on upfront construction costs instead of signing on new leases. On top of savings on renovation, businesses also save on utility bills, maintenance, cleaning, network infrastructure, and office equipment,” she continued.
Also advantageous to coworking spaces would be how they could accommodate companies’ social distancing needs, as many corporates are looking to split teams into different spaces to avoid working in the same open space.
“We’re lucky that Colony is built in a way that could cater to this as we don’t have many open coworking desks, most of our inventory is in private offices, so people can split into 2, 3 or 4-person offices,” said She Mun.
SMEs and micro-SMEs who are prone to scaling up and down very quickly will also find coworking spaces to be quite ideal thanks to the flexibility offered.
Colony’s CEO, Timothy Tiah pitched in to add that even landlords might now consider partnering with operators like Colony to maximise usage of their spaces and meet the new growth in flexible workspace demand.
“Landlords generally don’t want the hassle of managing the day-to-day of short-term leases,” he explained.
New Changes
As for what kinds of new members coworking spaces might see, She Mun shared Colony’s experience as an example.
“We have some enquiries from retail because our coworking space is strategically located, they would consider coworking spaces as their satellite office depending on the location, whether it is in close proximity to their physical stores, and most of the time, the back-of-the-house teams wouldn’t want to work in the physical store itself.”
She doesn’t think that there’s a specific fit in terms of industry that works best with coworking, as it’s more about one’s business goals and how they run their business, and whether or not the coworking space concept is in line with it.
Another thing that’s quite integral to coworking spaces are their events. In this time of social distancing, can coworking event spaces be salvaged? Colony believes it’s possible with the government’s set SOPs.
For example, a product launch could be converted into private sessions with different media taking up 1-hour slots, and webinars might become the next thing in events.
Colony is already preparing for the latter with a package that provides equipment like 4K webcams with noise isolation audio, high speed internet, a video conferencing system, and ring lights, to name a few.
Other social distancing SOPs that they’ve implemented include removing some chairs in their open and reserved desk areas to allow more distance between workstations, and carrying out temperature checks and compulsory registrations for all members and non-members.
Bottom Line: As someone who isn’t keen on permanent WFH, I think coworking spaces hit that sweet spot between having an office space and juggling the cost of it. This way, employees could switch from WFH to coworking spaces whenever they want, as employers will no longer feel bound to longer leases.
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Featured Image Credit: Colony