Posted on: 16th December 2022
Reading time: 6 mins
With the rise of remote and hybrid work styles, more and more businesses, freelancers and independent professionals are making use of coworking spaces. Oftentimes, office rent takes up a significant portion of a company's operating expense. With organisations now realising that hybrid working lowers costs, more are considering renting coworking spaces to accommodate employees. When considering renting a coworking space however, one of the major considerations is the price.
Coworking space prices are based on a range of factors, such as whether you intend to only use a hot desk or if you’re also looking to rent out other rooms, such as meeting rooms as well. Given the flexibility offered by coworking spaces, and the fact that you pay only for what you use, the cost savings can be substantial when comparing a coworking space and a traditional office.
As a reference, the Zoopla calculator can help in finding out how much your coworking space could cost, depending on your employee headcount, anticipated headcount change, location, anticipated lease term and degree of uncertainty. Other factors that will determine the cost of your coworking space include your cost per seat and setup costs. Coworking spaces often charge separately for meeting room usage, with costs depending on the size and number of meeting rooms you require as well as your anticipated usage frequency.
Shared office space is often highly cost-effective, as, unlike traditional offices, you only pay for what you use. This means that if your company only needs 10 desk spaces at the moment, that is what you will be paying for. In addition, with companies now embracing the hybrid work model, renting a fewer amount of desk spaces is feasible as teams can coordinate and set up a rotating attendance schedule. According to Global Workplace Analytics, businesses can save approximately £9,700 every year for every person who works remotely for half of the week.
In comparison to coworking spaces, companies renting out traditional office spaces typically pay significantly higher costs as they must pay for rental expenses, capital expenses, space planning and operational costs. With no need to kit out a brand new office, businesses could be saving anywhere between £78 to £780 per employee, per month, when opting for a coworking office space.
In a shared office, costs for amenities are also included in the rent and there are no hefty lease exit costs, which are present in traditional office leases. Coworking spaces offer the additional benefit of a flexible month-to-month schedule which means that you can gradually increase the space you require as you grow. In that sense, many coworking spaces are far more economical than traditional workspaces, which do not often take into account the changing needs of a business.
A number of external factors can cause the rent of buildings to rise over the years of the lease for a traditional office space. There are also costs for maintenance such as fees for the upkeep of the traditional office space. Furniture, computers, and kitchen appliances must also be bought (and periodically refreshed) for a traditional office space to ensure that the environment is functional and pleasant for employees.
By contrast, a coworking space has none of these costs. You are not responsible for paying for the maintenance of the office. At Regus, we pride ourselves on taking care of all building needs as well as knowing the staff of each company we work with. Our receptionists take care of all the small things like deliveries so that you don't have to sweat the small stuff.
Coworking spaces give businesses great value for the price at which they are offered. Not only are they a cost-effective alternative to traditional office space, they also provide companies with a chance to network with one another and form business relationships.
To understand if a coworking space is worth it, every business needs to conduct its own cost-benefit analysis. Such an analysis will need to consider not only the financial cost of renting a shared space, but also the projected savings in terms of effort and maintenance of a traditional office. In addition, businesses should consider their projected growth over the coming years. While traditional office spaces either need to be grown into (or gets grown out of), shared office spaces can be scaled up or enable users to move locations as needs change. Other more intangible benefits will stem from the environment and its ambience. Your staff may also benefit from the energy of a shared work environment, as well as its opportunities for socialising and sharing ideas.
In short, coworking space cost must be analysed holistically, with an eye also toward many of the intangible benefits. Startups, for example, have the opportunity to mingle with other business owners. As a small business, it is essential to take advantage of every networking opportunities that comes your way.
Small business owners also have the responsibility of choosing a location and office that is suitable and beneficial for employees. If you are currently considering renting a coworking space, involve your employees in the decision-making process. With 3,500+ locations across the world, there are plenty of opportunities for team members to collaborate in a coworking space that is near them - enhancing work-life balance and limiting commute times.
You may ask them to take a vote, for example, or discuss their attitudes towards the idea. Involving them in the process increases your business agility and can improve the impact of a new coworking space on your employees. Facilitating this decision involves presenting the costs versus the benefits for each option. During the consideration process, look at a range of factors including commute times, personal preferences as well as the surrounding businesses and other elements that cannot be measured simply by forecasting profitability and analysing rental costs.
After the end of such an analysis, many businesses come to find that the benefits of using a coworking space outweigh the costs. Many companies are transforming the way they work by closing down traditional offices and converting to a hot desk or shared office space model.
For more information or to get a quote, contact Regus, where we can answer your questions or provide you with a detailed cost estimate.
Want to know more about how we can help with hybrid working? Give us a call.
We’ll get you set up straight away.