Research study: when should SMEs choose between private and shared workspaces?

As working models become more flexible, workplaces are also changing. Within these changes, some businesses may be switching out traditional offices for shared, collaborative workspaces. What factors should businesses consider when choosing one over the other, what do employees prefer, and how can companies adapt to their needs?

As modern workforces shift to accommodate new demands, workers today can pick from a range of workplaces. These can include working from home, private offices, smart offices in smart cities, hot desks, and coworking spaces. Private offices have traditionally been a desirable option. Still, with benefits such as privacy and comfort, private offices also come with high expenditures, among other challenges.

'Overall, 44% of workers reported home or hybrid working and 56% reported only travelling to work in the last seven days (September 2022 to January 2023)’, according to the ONS. Despite this, many businesses are re-calling their employees back to the office. With this, coworking in shared office spaces may have gained traction. Many companies are choosing to cut their office space, and one option could be to base themselves in shared workspaces that provide agility, aid in collaboration, offer ample amenities, and do not fall foul of upending energy efficiency rules. 

As a result, overall flexible office occupancy rates in the UK currently stand at 83%. Furthermore, adopting these spaces has also spread to multiple sectors that may have typically favoured traditional office leases, such as financial services or even science laboratories. 

However, there are many factors that businesses should also consider when opting for shared workspaces. Do employees prefer to work in these environments? Does it improve their productivity?

We surveyed 1,018 employees —some of whom work in private offices while others work in coworking spaces— to understand their preferences and gather insights to help businesses decide if they should change their workspace mode and how they should do it. The full methodology can be seen at the end of the article.

Costs, flexibility, and amenities are why some companies opted for coworking spaces

Choosing a suitable workspace can be a crucial decision for businesses. When deciding between a private office and a co-sharing workspace, several factors can be considered. These factors could include budgets, company culture, the need for collaboration, privacy, scalability, and flexibility. 

We wanted to know the main reasons why some businesses had opted a co-working space instead of private offices, and this is what we found:

• Cost reductions: Finances can be a key concern for businesses. 38% of respondents who work in shared workspaces —coworking respondents— cited cost reduction as the primary motivator for their companies choosing coworking spaces. Shared office spaces can help reduce overheads, particularly in terms of rent, operational expenses, and investments in office equipment and furniture. 
• Flexibility: The flexibility and convenience coworking spaces offer were appreciated by 30% of coworking respondents who valued adjustable opening hours and space availability. Additionally, flexible office contracts can prompt companies to choose open workspaces, according to 27% of coworking respondents.
• Shared amenities: Coworking offices can offer shared facilities that companies can leverage. These include modern meeting rooms, well-equipped kitchens, lounges, and even wellness activities. For 27% of the same subset of respondents, the prospect of accessing these amenities without the hassle of setup or maintenance is a compelling reason to choose such workspaces.

Convenience and collaboration are advantages to coworking spaces, but distractions and privacy are setbacks

We asked coworking respondents to detail the key advantages and disadvantages they experienced, and this is what we observed:

More than a third of respondents (35%) who worked in coworking spaces appreciated the collaborative atmosphere and networking opportunities these spaces provide. Increased collaboration can help foster creativity and knowledge-sharing to spark innovation and help businesses stay agile and competitive. At the same time, this group of respondents also appreciated the convenience of the locations and facilities shared workspaces can provide.

However, coworking spaces also come with challenges. The most prominently cited drawback, as reported by 50% of coworking respondents, is the prevalence of distractions and noise levels in shared offices. An open-plan layout can create a bustling environment, which may not suit all workstyles. Similarly, some coworking respondents also expressed concerns about limited privacy and confidentiality (38%). The open nature of these offices may lead to compromised sensitive discussions or the mishandling of confidential information, which can pose a challenge for some businesses. 

Furthermore, over a quarter of coworking respondents (26%) noted their limited control over their workspace or their inconsistent work routine due to not having, for example, a fixed desk. These issues can hinder comfort and satisfaction as some workers may find it difficult to personalise their workspace to meet specific needs.

Private offices offer a consistent work routine but also come with distractions and noise

There are distinct advantages and disadvantages associated with both options, and yet 66% of employees working in shared workspaces said that they would rather work in private offices dedicated to their companies. 

What is it about private offices that is alluring? We interviewed employees who worked in private offices to see their perspectives on the perks and challenges of private workspaces.

According to our survey, most respondents (89%) who work in private offices have always done so. This can suggest that they have yet to meet the challenges other businesses have found that have compelled them to consider working in shared workspaces. We will now discuss in more depth some of the advantages of working from private offices.

Some of the perks this group of respondents cited were:

• Safer IT security: 47% of respondents in this group considered private offices to be safer in terms of IT security. These spaces often come with robust security measures and controlled access tailored to the company. This can reduce the risk of data breaches or cybersecurity threats. 
• Enhanced privacy and reduced distractions: Four in ten respondents who worked in private offices appreciated the reduced distractions and improved privacy with dedicated private offices. These spaces can provide a controlled, quiet environment where employees can focus on tasks without the distractions often found in open-plan coworking spaces. 

While private offices offer advantages, it’s also essential to acknowledge that they come with some disadvantages that may impact employee satisfaction. Employees who work out of one space may witness frequent visits from colleagues or management that can be considered distractions. 

Furthermore, some respondents of the same subgroup noted a lack of workspace flexibility (30%) and space constraints (27%). This could be because private offices often come with a fixed layout and limited adaptability that can hinder employees who prefer more dynamic, spacious, and agile arrangements.

Finally, distractions can be problematic for both coworking space employees and those who work in private offices. Communal areas can often lead to noise and social interruptions that can hinder focus. In both settings, managing distractions is crucial for maintaining levels of efficiency and work quality. Internal communication tools can help teams communicate effectively without having to cause noise in the offices, and task management software can help employees keep on schedule if there are distractions at work.

5 things businesses should consider before choosing workspaces

Choosing between private offices and coworking spaces shouldn’t be a mere preference. Instead, it should be a strategic decision that aims to enhance employee satisfaction. This article has delved into the factors that may drive businesses to opt for one workspace over the other. We list some of the key insights uncovered below:

1. Businesses should understand their workspace needs: UK companies may choose their workspace depending on various factors, such as cost reduction, flexibility, collaboration, or networking opportunities. However, each business has specific needs and operational objectives, so it is important to conduct a thorough analysis with specific pros and cons considered before making a choice.

2. Coworking spaces can help in creating agile, collaborative environments: shared workspaces can foster collaboration, networking, and flexibility. These are often traits that can be attributed to innovative and diverse businesses that can leverage the opportunity of working in open spaces while also saving costs. 

3. Private offices fit the needs for less synergetic business activities: while offering privacy, consistency, and IT security, private workspaces can be ideal for roles that demand increased concentration and confidentiality. However, this can come at the expense of reduced in-person collaboration that can potentially be replaced by online solutions. 

4. Employee satisfaction matters: workspaces can affect job satisfaction. While the moderate satisfaction rate for private office and coworking respondents both stood at 50%, only 14% of coworking respondents expressed high satisfaction (‘very satisfied’) with their workplace. In contrast, 33% of private office respondents said they were very satisfied. Individual preferences, jobs roles, and tasks can inform employee satisfaction regarding the workspace.

If companies decide to move to shared workspaces, it is important to focus on providing shared amenities and perks to employees to bolster their satisfaction. Additionally, businesses should listen to their employees and take heed of their feedback to improve their office spaces.  

5. Companies should balance diverse needs: when it comes to workplaces, one size typically doesn’t fit all. Businesses should seek spaces that cater to the benefits that both types of workspaces provide. Therefore, private spaces should focus on solutions to improve collaboration and flexibility, with lounges and open spaces. In contrast, coworking spaces should cater to specific privacy needs by providing smaller meeting rooms, isolated or quiet spaces, and increased cybersecurity to safeguard data. 

When choosing a workspace, businesses should ensure such spaces are capable of empowering businesses, drive innovation, expanding networks, and enhancing the employee experience while aligning with a business’s goals, budget, and strategies.