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How Coworking Will Save Corporate America

Shared office space and Coworking | CloudVO

Shared office space and Coworking | CloudVO

In CoreNet Global’s own words (and mine)

On the flight back home from an inspiring GWA conference1 in Denver last week, I read an article by CoreNetGlobal2 which reported on various research projects that revealed a profound change of mindset by Corporate Real Estate leaders, with the concept of “coworking3” in the middle of it all.
That’s when I realized that the GWA and CoreNetGlobal conversations, which until recently were taking place in parallel universes, are now on a course to unavoidable nuclear fusion.

Here is what CoreNetGlobal is saying in a recent issue of “The Leader”:

  • The average life of an S&P500 company has dropped from 60 years in 1960 to under 15 years in 2014.
  • Two-hundred Fortune 500 companies are projected to disappear in the next five years.

In other words, there is more “job security” with freelancers who are able to work with multiple clients than there is with most corporate jobs. Employees at large corporations spend a significant amount of time and energy worrying about their job security and looking for their next activity, while multiple coworking surveys have shown that the vast majority of coworkers are happy with their activity and find they are more productive in a coworking environment, as reported in Denver.

More from CoreNetGlobal:

  • 70% of the [corporate] workforce would rather be any place than at their current workplace
  • 20% of employees are toxic and better off being paid staying at home. That loss of productivity is estimated to be $1.6 trillion a year

Contemplate that for a minute: one out of five employees actually dilute value?

Expect the trend towards outsourcing major segments of the workforce to resume. We heard from Chris Hood, with CBRE, last week in Denver that Hewlett-Packard has informed many of their developers that they could continue to work for HP as independent contractors, but that the company no longer wishes to keep them on the payroll (Chris is an HP alumnus, like me).

  • The organization that changes the fastest with the least disruption wins
  • When we create a process that is social and engaging, the results produce an engaging workplace

This led the CoreNetGlobal folks to conclude that a social and engaging workplace produces tangible increases in creativity (which gives a better chance for the companies to reinvent themselves) and measurable increases in productivity (which keep successful companies competitive).

Social and Engaging: that’s what coworking is all about, isn’t it?

That kind of thinking is what is driving SAP to implement their own coworking experiment in downtown Palo Alto, or Verizon to partner with Grind in multiple locations, as Benjamin Dyett and I reported on a panel in Denver.

Laurent’s panel on the secrets to fruitful partnerships also featured Benjamin Dyett (Grind), Diana Rothshild (Nextspace), Kris Eliott (Preferred Office Network), and Mark Burke (Premier)

Jamie Russo, Founder of Enerspace, and Bill Jacobson, a Principal at Workbar, in their “New Users” panel highlighted the diversity of users in coworking places, including remote corporate workers.

Jamie Russo GWA Panel
Jamie Russo (Enerspace) and Bill Jacobson (Workbar) were joined by Sherry Romello (Hilton) and John Carey (Regus) for an enlighting panel on New Users.

Over the life of a building, a company will spend 5% on design, construction and FF&E, 3% on operation, 10% on technology, and 82% of the cost on the people.

Now, think about what a 1% increase in productivity does to the bottom line versus a 1% decrease in building costs. Do the math, and you will see that the people cost are more than 4 times higher than the workplace infrastructure costs over the life of a corporate building.

That realization lead the CoreNetGlobal research group to rightfully conclude that their focus should be more on investing in a workplace environment that will improve productivity, and foster serendipity, rather than on cutting down on infrastructure support cost.

All of this leads us back to the concept of coworking … the savior of Corporate America, as we don’t know it (but will discover soon)! 🙂

By Laurent Dhollande, CloudVO CEO


1: GWA stands for Global Workspace Association and is the Shared Office and Coworking Space providers Trade Association

2: CoreNetGlobal is the international organization of Corporate Real Estate Executives and Managers

3: The “term” coworking here is used in a larger context and includes all forms of shared office space that focus on building active communities, including WeWork-type of locations and Hybrid business centers with a keen focus on building active work communities.

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