Despite recent setbacks at companies like WeWork, coworking is still one of the hottest trends in global business. Although the COVID-19 pandemic forced many coworking spaces to close for several months, the industry is only expected to see a 13% decline in 2020 and resume its once exponential growth by 2021.
Coworking has become increasingly popular among freelancers, small businesses, and even multinational corporations. As global business shifts and changes in response to new trends, perks like remote work, extended weekends, and coworking stand to define a new age of more convenient, employee-friendly business practices.
Whether you’re an individual considering joining a coworking space, or you run a small business that wants to downsize from an office lease, these are the coworking statistics you need to know in 2020.
Worldwide, there were nearly 19,000 coworking spaces in 2019. That number was projected to pass 26,000 by 2020, although it may have been hampered slightly by the pandemic.
If you do the math, that’s an average of about 160 people per space. That’s a good deal larger than most small business offices.
Of the 19,000 coworking spaces in the world, 11,000 are located in the Asia-Pacific region, which includes Japan, China, and South Korea.
Despite the large market value, however, as recently as 2017, less than half of all coworking spaces were profitable.
One of the reasons that profitability is so low? The vast majority of coworking spaces are independently owned. Because they often have to buy real estate, coworking spaces often have significant overhead and it takes time for them to earn a profit. Just 26.2% of coworking businesses have two locations, while only 8.6% offer more than two locations or operate as franchise businesses.
Of the 19,000 coworking spaces in the world, only 36% are located in the United States, although that number is poised to grow in the near future.
While 6% may not sound like all that much, when you consider that coworking spaces barely existed in the U.S. just 15 years ago, it’s impressive how much of the market they’ve carved out. Overseas, it’s even more significant as 13% of non-American business is expected to be done in shared spaces by 2022.
Despite the growing popularity of coworking in the U.S., however, it is not growing at nearly a top-five rate. Where is coworking growing the fastest? Luxembourg.
One of the reasons why the U.S. lags behind in coworking growth is because of sky-high real estate prices. It’s expensive for companies to acquire space, which makes it expensive for workers to get space, too. Nationwide, it costs an average of $939/month to rent space in a WeWork. Boston is the nation’s most expensive coworking market, with an average cost of $1,889, more than double the national average.
Millennials are the largest generation in the workforce today, and an astounding 62% of them work in coworking environments. That’s compared to just 5% of Baby Boomers. If there’s any single statistic that suggests coworking will continue to grow, it’s this one.
Coworking space demographics lean in one direction: The numbers show that a majority of coworkers (60%) are male, which is worth knowing for HR directors who will have to navigate high-energy environments with lots of cooperation and very few boundaries between people.
You may not be surprised to know that 41% of coworkers are freelancers. Corporate workers come in close behind at 36% of the workforce.
Larger companies stand to continue cutting into freelancers’ share of the workforce, too. In 2017, WeWork statistics showed a 90% increase year-over-year in the number of enterprise companies in their spaces, and a 360% increase in employees. Some of the big names utilizing coworking spaces include Microsoft, Spotify, Pinterest, and HSBC.
According to research by The Royal Society, coworking spaces ironically foster an environment where people rarely interact. These numbers are partially driven by the fact that many independent contractors use coworking spaces and may not actually have coworkers to interact with. Still, less face-to-face communication often leads to increased productivity so it’s not necessarily a bad thing.
We know that decreased interaction isn’t a bad thing because research shows that coworking actually makes employees happier. A whopping 89% of coworkers say they feel happier after joining a coworking space and 83% say they feel less lonely. They may be interacting with people less, but just working in this kind of environment may be beneficial to their mental health.
According to a GCUC survey, 84% of coworkers say that working in a coworking space makes them more motivated. Additionally, 69% say they’ve developed new skills and 68% say they’ve improved existing skills since joining a coworking space.
It may be obvious, but it’s worth clarifying in data: 82% of coworkers report that they’ve expanded their professional network since joining a coworking office space.
They don’t expect items like computers, but they would prefer printers, phones, and even fax machines to be available for public use.
Offices help teams collaborate and work towards common goals. Nearly half of businesses want coworking spaces to do that as well. While some people would prefer to use coworking spaces to simply have a place to go to work, these spaces should still aspire to create an environment where people can collaborate.
People do their best work at different times, which is one of the primary advantages of coworking spaces. If a coworking space is open 24/7, you’re not beholden to office hours, you can work when you want and when you feel most able to succeed.
Although it was dealt a tough hand by the COVID-19 pandemic, coworking was a thriving industry before and it will likely be thriving again once things normalize. More and more companies are rethinking the way they work, making coworking a more appealing option even for giant corporations like Microsoft. These statistics should help you understand the coworking industry a little better, so you can make an educated decision on whether you want to get involved.
Nick Perry is a freelance writer based out of Boston. After working in Hollywood and Silicon Beach, he launched his own small business and frequently referenced Fundera’s resources. Now, he’s a contributing writer at Fundera. Nick has written extensively about small businesses, ecommerce, the restaurant industry, and entertainment. His work has appeared on Entrepreneur, Digital Trends, Toast’s On The Line, and more.