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Co-working spaces: What every employer needs to know

When co-working first came on the market, these workplaces were mainly marketed to independent contractors, freelancers and IT start-ups. The communal nature of co-working offices gave the self-employed some of the traditional benefits of working in a team environment, such as collaboration and professional interaction.

Co-working office spaces will likely continue to grow in popularity as more and more businesses discover the conveniences they offer.

But co-working spaces can also present challenges for some companies. For example, what are your responsibilities for providing a safe work environment and your liabilities if a co-working space doesn’t operate as expected? How do you ensure work is getting done?

Here’s what you need to know about this newer type of office space and how to determine if it will work for your business.

How co-working spaces work

The typical co-working operation consists of some combination of an open work area with multiple work stations, individual offices and conference rooms with furniture and basic office equipment provided. You’re charged a daily, weekly or monthly fee depending on how many workstations, private offices and conference rooms you use.

WiFi, coffee and tea are usually free, with additional fee-based services available, such as printing, mailboxes or specialty equipment (projectors, TVs, etc.).

Prices vary wildly depending on your city and whether you want a long-term contract or no contract. That said, a quick online search reveals averages of $50 a month for a shared desk in an open work area where you can drop in any time, to $1,500 a month for a lockable office that seats a few people.

Pros and cons of co-working spaces

The benefits to co-working spaces may seem obvious to the self-employed or very small business owner who wants something more professional than a coffee shop in which to work. But what about co-working for larger companies?

Benefits of co-working spaces for larger businesses include:

  • Provides remote employees with a more professional, less isolated environment than working from a home office
  • Opportunities to network with potential clients, vendors and new employees
  • Affordable, flexible office space that can expand or contract quickly for cash-strapped start-ups or larger businesses moving into a new market
  • Temporary space for training, small conferences or other specialty, short-term space needs
  • May help with recruiting younger workers who expect more opportunities to work remotely

The cons of using co-working spaces are similar to any remote work arrangement. Here are some potential downsides to co-working spaces.

  • If noisy or crowded, the workspace may not be productive for employees who need a quiet place to execute their work.
  • Due to the limited structure inherent to this type of environment, employees who lack self-direction or motivation may struggle to stay engaged and productive.
  • As a manager, you’ll need to clearly communicate your expectations of accountability and ways to judge productivity from your remote employees. For example, since you won’t see your remote employees at their desks, day after day, how will you know work is getting done?
  • Your employees will be working in a place you can’t control, but you’re still responsible for providing a safe, non-discriminatory environment for your employees to work in. So, if other people working within the co-working space harass or mistreat your employees, you still must do your due diligence and investigate the complaint. Your only recourse may be to take your business elsewhere.
  • Employees working in open or communal office spaces may find it difficult to discuss or handle confidential business information.

What to consider before allowing employees to work in a co-working space

What questions should you ask if an individual or team requests to work in a co-working space?

First, consider the proposal as you would any other new idea. Require the employee or team to provide a well-thought-out rationale backed by data. This might include a cost-benefit analysis comparing co-working costs to the expenses of a 2- to 4-year lease on traditional office space with furniture and utility costs.

Next, consider how spinning off an individual or a team to a remote location might impact your company’s culture. Think through how your company’s policies apply to remote workers, whether they work from home or in a co-working space, particularly in the areas of confidential information and use of company equipment.

Discuss how productivity will be measured. Without performance standards in place, your managers won’t be able to judge whether work is meeting standards. Will you expect your employees to work certain hours in the co-working space, or is it enough that they’re available for meetings and when you call?

Vague expectations mean you might have trouble letting an employee go if deadlines are repeatedly missed or work product isn’t delivered.

Finally, you’ll need to consider the performance history and the responsibilities of the employees who are submitting the requests. Are they self-sufficient workers who can work independently and still be valuable contributors to the company? Or, do they require a significant amount of oversight and guidance from their manager? If it’s the latter, you may be setting them up for failure if you allow them to work from a co-working space.

Visit the co-working space 

It’s also vital that you visit the co-working space in person at various times of the day to judge the atmosphere for yourself. Things to look for include:

  • Does the office space meet your company’s standards for safety and security? Are the bathrooms and communal kitchen areas clean? Is the building in adequate repair? Are electrical cords from computers strung across walkways?
  • What is the noise level? Is there a party going on every time you drop in? Or, is it relatively quiet and the atmosphere professional?
  • If employees will be working at night, is there adequate light outside the building and in the parking lot? Is the front door locked after a certain time?
  • Are alcoholic drinks available? If yes, is that against your company’s policies?
  • Does the co-working space have written policies that protect users from sexual harassment, discrimination and other areas of behavior you protect in your regular office?

If you and your employees already work in different buildings or separate cities, a co-working arrangement may not create much change. For more traditional companies, sharing a co-working space with other companies may require new policies to protect confidential information or additional training for leaders used to managing workers who sit right outside their office.

It may be time for companies to get comfortable with co-working offices. According to the U.S. Department of Labor, 35 percent of employees in professional occupations worked from home in 2015. Co-working spaces may well offer companies the camaraderie their remote desk jockeys need without the long-term expense of traditional office space.

Find more ways to inspire and motivate your employees by downloading our free e-book, How to Develop a Top-notch Workforce That Will Accelerate Your Business.