Coworking spaces continue to pop up across the country, and the Midwest is no exception. As companies continue to shrink their office footprints and employees seek shorter commutes and more flexible working conditions, cities from Madison to Chicago and Detroit to Kansas City as seeing new coworking spaces open, often in the center of their downtowns.
And now a pair of busy coworking providers are expanding throughout the Midwest, opening new offices in cities such as Madison, Columbus and Indianapolis.
It all means that coworking will continue to make a big impact throughout the Midwest.
Consider WeWork. It ranks as the biggest name in coworking today, and it is steadily building its presence in the Midwest. The company now has 11 locations in Chicago, two in Detroit, three in Minneapolis and one in Kansas City. And it has plans to open more locations in the Midwest in the coming months.
When it comes to growth, WeWork isn’t alone. In a recent report, the Global Coworking Unconference Conference and Emergent Research predicted that there would be 5,026 coworking spaces in the United States by the end of 2019. That number is expected to rise to 6,219 by the end of 2022.
The report provides a good look at how fast coworking has grown. After all, the report sasid that there were only 14 coworking spaces in the United States at the end of 2007.
The number of people who work in coworking spaces is rising, too. The report said that as of the end of 2016, a total of 331,000 people worked from these spaces. The report predicts that this number will hit 754,000 by the end of 2019 and 1.076 million by the end of 2022.
This growth is happening quickly. Just look at WeWork. The company wasn’t always the giant in this space. The company got its start in 2010 with a single location in New York City. But as the demand for coworking spaces has increased, WeWork has exploded. Today, you can find WeWork sites in 100 cities spread across 27 countries. As of mid-January of this year, WeWork had opened 425 locations.
Megan Dodds, general manager for the Midwest with WeWork, said that the company will continue to expand, including in the Midwest. Dodds said that WeWork plans to open locations soon in Columbus and Indianapolis.
How has WeWork managed to grow so steadily? Dodds said it all comes down to demand.
“People are looking for more out of their work experience,” Dodds said. “They are looking for options. They want the ability to work in an office and remotely. They want to work differently even in the space they have. Maybe they’ll spend their morning in a private office setting but their afternoon in a conference room meeting with a customer or teammate. Maybe they’ll end their day in a lounge space. Coworking spaces provide this flexibility.”
Coworking might be a positive for employers, too. Dodds said that employees are more productive when they can work in spaces that are more comfortable for them. And this comfort isn’t just about the physical layout of a space. It’s also about where that space is located.
Some companies, then, might rent coworking space in markets in which they don’t have full-time offices. This gives employees who live closer to these other markets the option to work part-time in a coworking space on certain days and work in their employer’s main offices on others.
Other companies might benefit from the energy in coworking spaces, Dodds said. This is especially true of smaller, start-up firms. Start-up workers who are in coworking spaces might share ideas with the workers from other smaller companies that have also rented space in a coworking location. This bouncing back and forth of ideas can foster creativity.
Dodds, though, said that WeWork spaces aren’t just for smaller companies. Larger, enterprise firms often rent space at WeWork locations, too.
To serve all of its clients, WeWork offers a variety of office space options. This includes headquarters by WeWork, a standalone private office in a location dedicated solely to the workers of one company. This option does not include any shared spaces.
WeWork also offers private office suites and private offices in addition to the shared workspace areas for which it is best known.
WeWork isn’t the only coworking provider making an impact in the Midwest. Serendipity Labs recently opened its seventh Midwest location, this one in Madison, Wisconsin. This office joins Serendipity’s other Midwest coworking spaces in Chicago; Columbus; Carmel, Indiana; Wauwatosa, Wisconsin; and Pittsburgh.
John Arenas, chairman and chief executive officer of Serendipity Labs, said that the company has targeted the Midwest for future expansion plans. Midwest markets make sense for Serendipity because the company focuses on larger, more established enterprise businesses. These businesses already have locations in larger city centers such as Chicago and New York City. What they need are locations in smaller, but still major, cities to better serve their employees.
“Madison might not seem obvious to someone who is looking at the coworking space,” Arenas said. “But our enterprise clients have workers whom they care about. They want to help them shorten their commutes and work remotely. We are able to win corporate accounts and corporates businesses that we wouldn’t be able to get if we only had the big city center locations.”
Arenas said that locations such as Columbus and Indianapolis are in demand by bigger companies.
“It’s a need that transcends geography,” Arenas said. “It’s not really a matter of coworking being for big cities. It’s about where the workers are.”
Madison also boasts other positives that attracted Serendipity Labs. Arenas called the Wisconsin city a vibrant one, thanks in large part to the University of Wisconsin. Arenas said that employees want to work from the city. With its new coworking space, Serendipity Labs can offer companies the chance to offer space to these workers in the city without having to lease or build out their own offices here.
Dodds said that the biggest myth concerning coworking is that it’s only for small businesses or start-ups. But both WeWork and Serendipity Labs serve enterprise companies, too, bigger businesses that want to offer more workplace options for their employees.
“When most people think of coworking, they think of many people working out of one shared room,” Dodds said. “Then they might think of small businesses with private offices. But as we have grown, we have introduced spaces for larger companies that are looking for the collaborative experience that WeWork provides.”
Serving these larger companies does require a different kind of coworking space. The working areas must be attractive to more established businesses, Arenas said. This means boasting high security levels and the latest technology.
Providing a space for enterprise businesses extends even to the type of furniture, Arenas said. Many of the employees working in Serendipity Labs’ spaces are in their 30s, 40s or 50s. Serendipity, then, focuses on providing seating areas that are comfortable and promote good health. Even the work tables are designed to be the right height to provide the most comfort to employees typing on computers.
“These things are important to enterprises,” Arenas said. “Having a cool-looking space isn’t enough for them, even if that space is in the right location.”
Arenas said that the average age of employees working at Serendipity Lab coworking spaces is 41, with 75 percent 30 to 49 years old.
“They are not looking for a party,” Arenas said. “They are looking for a way to improve how they are working and living. They want to be inspired by the people around them.”
Will the coworking boom slow anytime soon? Arenas doesn’t think so. He pointed to two main drivers that he says will continue to fuel the expansion of coworking spaces across the country.
First, there’s the consumerization of work, a trend that gained strength during the last recession. As companies shrunk their workforces, workers had to plan their own workplace situations, Arenas said. A greater number of people began working as consultants or freelancers. They grew used to working from shared workspaces or remote locations.
Once the economy bounced back from the recession, many of these workers decided that they didn’t want to return to a full-time office environment.
“They decided that they had their own ideas of how to work,” Arenas said.
That trend has continued, with a growing number of employees preferring to work in locations closer to their homes or in different offices depending on their work schedules.
Secondly, companies today, because of low unemployment, are working harder to attract and retain the best talent. Those companies that want to attract the best need to offer flexible working arrangements. Coworking spaces can be an important part of this puzzle.
“The current generation of the American workforce wants to make good choices about they work each day,” Arenas said. “They don’t want to slog through traffic every day to get to a main office just because that’s the way it’s always been done. There might not be a good reason to go into that big central office every day. You can be more productive in a remote location.”