Co-working spaces are basically creative office frameworks created primarily to cater to the professional needs of freelancers, solopreneurs, entrepreneurs, and other self-employed individuals. However, the concept has become more popular these days among big organizations like IT giants seeking to lease a co-working space, even in remote locations. Especially the restrictions of the unprecedented pandemic compelling businesses to redraft their operations and adapt to a hybrid mode of working escalated the need for shared office spaces all over the world.
These days, most IT companies and major organizations are gradually expanding and spreading their branches in Tier II and Tier III cities; mostly to facilitate their employees with remote working privileges. Cities like Bhubaneswar, Guwahati, Indore, Jaipur, and Chandigarh have now become bases where major businesses are trying to expand their wings. Also, big companies from outside the country have also been taking huge spaces and increasing their businesses exponentially by operating from Tier II and Tier III cities. This has also led towards significant infrastructure development; mostly enabled by the skilled local manpower with huge potential available in these cities. Moreover, there is an emerging start-up culture in Tier II and Tier III cities, which has driven the additional demand for co-working spaces.
The key reason behind industry giants renting co-working spaces in cities where they are not headquartered is to enable employees to work from their hometowns. Especially, during the pandemic restrictions, most employees went back to their hometowns and started working remotely; making the co-working spaces more and more relevant. Most companies seek co-working spaces in Tier II and Tier III primarily because they want to retain their manpower, increase the workforce and reduce infrastructure costs because establishments in Tier II and Tier III cities are cost-effective and enough spaces are available there.
The pandemic has significantly impacted the working preferences of people across all industries. Many professionals have reported being more comfortable working from their domestic locations and this is one reason there has been a huge number of resignations in the past months. To increase their employee retention ratio and thereby avoid the ‘Great Resignation’, companies are now renting co-working spaces at remote locations; which is also a significant boost to productivity.
Furthermore, remote offices have been preferred by businesses since while boosting collaboration, interaction and networking, they are well-equipped with technology and state-of-art facilities and are aesthetically lucrative. Hence, the high-end working infrastructures are cost-effective, especially in Tier II and Tier III cities, making it a smart choice for IT companies. Businesses are now focusing on leasing small spaces for a short period rather than buying big places for a longer term.
It has also been observed that a creative workplace with an aesthetic design and convenient infrastructure for the employees, providing opportunities for co-working generates higher levels of productivity than the conventional office-based work environment. Thereby, more and more businesses, especially in India, have been in line with promoting the communal work culture.
Survey reports suggest that the co-working space market is projected to grow by $11.35 billion – a steep Compound Annual Growth Rate (CAGR) of 11.31 per cent. Also, expert opinions indicate that most commercial places in India will convert to hybrid offices by 2025; which may translate to the fact that the shared office spaces are certain to witness exponential growth and will be attracting more big organizations to lease creative workplaces in the future.
(The author is Mr. Aditya Mehta CEO and Co-Founder of Akasa Co-working and the views expressed in this article are his own)