Last week, we shared a story on the sudden decline of coworking “giant” WeWork. In case you haven’t had a chance to read it yet (I highly recommend it as it sheds some serious light on the topic) the TLDR gist of the story is that the company has very quickly declined from a $47 billion company to an $8 billion one. That said, their drop in value has resulted in a need to offload assets, such as a variety of coworking companies it recently purchased – some as recent as this year.
Despite the company’s obvious failures, according to a recent coworking survey by Clutch, WeWork is still pretty popular. When surveyed against 5 other possible choices, the company took the top spot, with 39% of respondents said they work from a WeWork location.
But watch out WeWork! In the same poll, 36% of people (only 3% less than WeWork) are opting for local spaces for their coworking needs. So what does this mean for the coworking landscape in 2020? Clutch found some really interesting data that may give us some clues into what the future of coworking may look like.
Our first trend is that coworking spaces are seemingly favored by business who prefer to be involved in their local community and offer community-based perks. This is something that niche spaces, like Enterprise Coworking, owned by Focus Property Group in Denver, Colorado, are capitalizing on.
Andrew Schuh, a marketing specialist at Focus Property Group, says that local Denver businesses tend to be drawn to their coworking space and that “being local and involved in local events and forming partnerships with local businesses has really helped us. We have a local touch that WeWork doesn’t have.”
But are other local businesses and employees around the globe following suit? We’ve found that whether or not you’re with a company or single employee, the decision to go with a larger space, vs. a smaller, local space, really comes down to a couple things: the size and type of company you work for and your company’s policy on remote working.
For example, if you are a freelancer and you do not have a dedicated space to work in, assuming you have the amount of work that warrants a coworking membership, logic would say that you may want to go with a larger space like WeWork – one with more amenities (which we’ll discuss later in the story). However, being a freelancer also means that you’re probably the one paying for the space, so both actual need and budget can be very real concerns. These concerns may force you in the direction of a local company, vs. a large company like WeWork.
On the other hand, if you are part of an organization that pays for, or subsidizes your remote workspace (lucky you!), you may very well have the means to go with a larger space like WeWork.
Another trend that certainly plays a role in the 2020 landscape is in relation to company policy. It’s important to mention that many, but not all, larger companies have restrictions when it comes to remote working. Some businesses may completely disallow remote working, while others may only offer the ability to work out of the office a few days a week.
Clutch goes on to point out that if a company has more than 100 employees, it’s more likely that their employees visit their coworking space the majority of the week. They found that 53% of employees from larger companies spend 5 or more days per week at their remote office of choice.
In the same vein, Clutch found that if a company has less than 10 employees, only 29% of employees spend the majority of their time at their coworking office. This likely correlates somewhat with what we mentioned before: smaller companies are less likely to prioritize private office expenses, typically based on budget, need, and policy. It can certainly also have something to do with the job you’re in and whether or not the position supports remote work.
Schuh says “The majority of members use the space most days, but there are the smaller businesses that come in fewer days per week…our larger members are definitely here full-time, though.”
Now, another trend that may have an impact on the future of coworking is in relation to plans and contracts. Larger companies tend to stick with coworking spaces for at least a year. We speculate the reasons are both growth-related and budget-related. In a small company, month-to-month is often a great option as it offers flexibility. However, medium and larger companies frequently go with annual plans, which may be subsidized and offer a stable work environment for their employees.
For instance, TrustPilot, a well known review-gathering service and platform, is Enterprise Coworking’s largest member, with 72 out of 800 employees working at the Denver space. All Denver-area employees exclusively work out of Enterprise as it offers them both stability and flexibility. The company has a suite-plan (vs. a desk membership), meaning they can work anywhere they’d like in the office. They also recently signed a 5-year contract with the space, saying that they have no plans to move, even as they grow.
Contracts such as these support small to mid-sized businesses who are on the right track, growth-wise, and are looking to increase their footprint long-term.
The final trend we’ll discuss today is all about amenities. Coworking spaces aren’t just for working. They’re for playing, too!
Many coworking offices come with a wide array of services and perks. Clutch found that 39% of coworking spaces have recreation rooms, for example (Enterprise being included in that statistic). Game rooms like these can have a direct impact on job satisfaction and productivity, which can prevent burnout. Enterprise’s recreational room, for instance, provides pingpong tables, shuffleboard, and Xbox access and helps to reduce daily work-related stresses for many employees. Actually, according to Clutch, about 60% of coworking employees are more relaxed at home since they started working at a coworking office.
Office Assistant, Holly Emmons, attests to this by saying “Our team loves pingpong…people take breaks from their busy days to destress for a few minutes and get away from their desks, so it is great having these types of spaces throughout the building.”
Another amenity that’s taking the industry by storm is wellness programs, and it’s no wonder why. After all, having healthier customers means more activity in the coworking space (more frequent visits, consistent payments, less cancellations, etc.), which means more revenue for the coworking space.
So, what does all this mean for coworking in 2020? With larger companies committing themselves to specific services, we predict that the coworking model will continue to be near and dear to both businesses and employees in the future. In this competitive market, it’s highly likely that many spaces will also continue bring in new tactics and amenities to rival giants and small businesses-alike.
So, without further adieu, let the coworking space wars begin!
Big retailers are opting for refunds instead of returns
(BUSINESS NEWS) Due to increased shipping costs, big companies like Amazon and Walmart are opting to give out a refund rather than accepting small items returned.
The holidays are over, and now some people are ready to return an item that didn’t quite work out or wasn’t on their Christmas list. Whatever the reason, some retailers are giving customers a refund and letting them keep the product, too.
When Vancouver, Washington resident, Lorie Anderson, tried returning makeup from Target and batteries from Walmart she had purchased online, the retailers told her she could keep or donate the products. “They were inexpensive, and it wouldn’t make much financial sense to return them by mail,” said Ms. Anderson, 38. “It’s a hassle to pack up the box and drop it at the post office or UPS. This was one less thing I had to worry about.”
Amazon.com Inc., Walmart Inc., and other companies are changing the way they handle returns this year, according to a report by The Wall Street Journal (WSJ). The companies are using artificial intelligence (AI) to weigh the costs of processing physical returns versus just issuing a refund and having customers keep the item.
For instance, if it costs more to ship an inexpensive or larger item than it is to refund the purchase price, companies are giving customers a refund and telling them to keep the products also. Due to an increase in online shopping, it makes sense for companies to change how they manage returns.
Locus Robotics chief executive Rick Faulk told the Journal that the biggest expense when it comes to processing returns is shipping costs. “Returning to a store is significantly cheaper because the retailer can save the freight, which can run 15% to 20% of the cost,” Faulk said.
But, returning products to physical stores isn’t something a lot of people are wanting to do. According to the return processing firm Narvar, online returns increased by 70% in 2020. With people still hunkered down because of the pandemic, changing how to handle returns is a good thing for companies to consider to reduce shipping expenses.
While it might be nice to keep the makeup or batteries for free, don’t expect to return that new PS5 and get to keep it for free, too. According to WSJ, a Walmart spokesperson said the company lets someone keep a refunded item only if the company doesn’t plan on reselling it. And, besides taking the economic costs into consideration, the companies look at the customer’s purchase history as well.
Google workers have formed company’s first labor union
(BUSINESS NEWS) A number of Google employees have agreed to commit 1% of their salary to labor union dues to support employee activism and fight workplace discrimination.
On Monday morning, Google workers announced that they have formed a union with the support of the Communications Workers of America (CWA), the largest communications and media labor union in the U.S.
The new union, Alphabet Workers Union (AWU) was organized in secret for about a year and formed to support employee activism, and fight discrimination and unfairness in the workplace.
“From fighting the ‘real names’ policy, to opposing Project Maven, to protesting the egregious, multi-million dollar payouts that have been given to executives who’ve committed sexual harassment, we’ve seen first-hand that Alphabet responds when we act collectively. Our new union provides a sustainable structure to ensure that our shared values as Alphabet employees are respected even after the headlines fade,” stated Program Manager Nicki Anselmo in a press release.
AWU is the first union in the company’s history, and it is open to all employees and contractors at any Alphabet company in the United States and Canada. The cost of membership is 1% of an employee’s total compensation, and the money collected will be used to fund the union organization.
In a response to the announcement, Google’s Director of People Operations, Kara Silverstein, said, “We’ve always worked hard to create a supportive and rewarding workplace for our workforce. Of course, our employees have protected labor rights that we support. But as we’ve always done, we’ll continue engaging directly with all our employees.”
Unlike other labor unions, the AWU is considered a “Minority Union”. This means it doesn’t need formal recognition from the National Labor Relations Board. However, it also means Alphabet can’t be forced to meet the union’s demands until a majority of employees support it.
So far, the number of members in the union represents a very small portion of Google’s workforce, but it’s growing every day. When the news of the union was first announced on Monday, roughly 230 employees made up the union. Less than 24 hours later, there were 400 employees in the union, and now that number jumped to over 500 employees.
Unions among Silicon Valley’s tech giants are rare, but labor activism is slowly picking up speed, especially with more workers speaking out and organizing.
“The Alphabet Workers Union will be the structure that ensures Google workers can actively push for real changes at the company, from the kinds of contracts Google accepts to employee classification to wage and compensation issues. All issues relevant to Google as a workplace will be the purview of the union and its members,” stated the AWU in a press release.
Ticketmaster caught red-handed hacking, hit with major fines
(BUSINESS NEWS) Ticketmaster has agreed to pay $10 million to resolve criminal charges after hacking into a competitor’s network specifically to sabotage.
Live Nation’s Ticketmaster agreed to pay $10 million to resolve criminal charges after admitting to hacking into a competitor’s network and scheming to “choke off” the ticket seller company and “cut [victim company] off at the knees”.
Ticketmaster admitted hiring former employee, Stephen Mead, from startup rival CrowdSurge (which merged with Songkick) in 2013. In 2012, Mead signed a separation agreement to keep his previous company’s information confidential. When he joined Live Nation, Mead provided that confidential information to the former head of the Artist Services division, Zeeshan Zaidi, and other Ticketmaster employees. The hacking information shared with the company included usernames, passwords, data analytics, and other insider secrets.
“When employees walk out of one company and into another, it’s illegal for them to take proprietary information with them. Ticketmaster used stolen information to gain an advantage over its competition, and then promoted the employees who broke the law. This investigation is a perfect example of why these laws exist – to protect consumers from being cheated in what should be a fair market place,” said FBI Assistant Director-in-Charge Sweeney.
In January 2014, Mead gave a Ticketmaster executive multiple sets of login information to Toolboxes, the competitor’s password-protected app that provides real-time data about tickets sold through the company. Later, at an Artists Services Summit, Mead logged into a Toolbox and demonstrated the product to Live Nation and Ticketmaster employees. Information collected from the Toolboxes were used to “benchmark” Ticketmaster’s offerings against the competitor.
“Ticketmaster employees repeatedly – and illegally – accessed a competitor’s computers without authorization using stolen passwords to unlawfully collect business intelligence,” said Acting U.S. Attorney DuCharme in a statement. “Further, Ticketmaster’s employees brazenly held a division-wide ‘summit’ at which the stolen passwords were used to access the victim company’s computers, as if that were an appropriate business tactic.”
The hacking violations were first reported in 2017 when CrowdSurge sued Live Nation for antitrust violations. A spokesperson told The Verge, “Ticketmaster terminated both Zaidi and Mead in 2017, after their conduct came to light. Their actions violated our corporate policies and were inconsistent with our values. We are pleased that this matter is now resolved.”
To resolve the case, Ticketmaster will pay a $10 million criminal penalty, create a compliance and ethics program, and report to the United States Attorney’s Office annually during a three-year term. If the agreement is breached, Ticketmaster will be charged with: “One count of conspiracy to commit computer intrusions, one count of computer intrusion for commercial advantage, one count of computer intrusion in furtherance of fraud, one count of wire fraud conspiracy and one count of wire fraud.”
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