Workforce Articles

By Rieva Lesonsky

Should you share office space with another small business? While startup companies and have long shared office space in business incubators, and freelancers often rent desks in co-working spaces, the Wall Street Journal recently took a look at the growing trend of two, three or even five established businesses sharing office space with each other.

What’s behind the trend? Of course, profiting from unused office space or saving money on costly leases is a key motivator for many companies that share office space. But other companies are sharing space as a way to spark innovation, trade skills, or find new partnerships through mingling with workers in completely different industries.

The Journal cites data from Emergent Research and co-working site Deskmag.com that nearly 10 percent of U.S. co-working users in 2011 were from businesses with more than 100 employees. The article focuses on big businesses that are sharing space with each other or with startup companies, but the concept can work for existing small businesses too.

How can you make co-working work? Here are some factors to consider.

Create shared space. Set up a percentage of the office as shared space, where employees from both companies can mingle during downtime, brainstorming sessions or meetings. Create lounges, common areas or lunchrooms so that interaction occurs naturally. At ecommerce company Zappos, which is building a big co-working space, employees at headquarters only use one entrance and exit so they’re forced to literally run into each other in the lobby.

Encourage wandering. To truly benefit from shared space, you’ll want ongoing interaction, so you’ll need to let people wander around freely. Co-working works best in companies with lots of open, nonhierarchical space. To keep the interactions from being intrusive, some companies use signals such as putting up signs, closing doors or having employees wear headphones when they don’t want to be disturbed.

Test the idea in a co-working space. If you’re not sure about sharing your office space or moving into someone else’s space, test-drive the idea by looking for co-working facilities through matchmaking services such as Loosecubes.com and LiquidSpace.com. One larger company cited by the Journal rented space for about one-tenth of its staff to work at a co-working facility when they want. The benefit? Interacting with lots of different people who have different skill sets, then bringing that back to the office.

Know what you’re giving…and getting. Partnering with a noncompetitive business is key to making shared space work. Even so, the Journal notes that one reason some big companies share space with smaller ones is not at all altruistic: They like to hire employees away from the smaller firms.

Barter, but set ground rules. Companies on tight budgets can rent space from other companies in exchange for providing services. If you do this, however, it’s important to put your terms in writing so you don’t find yourself suffering “scope creep” as the landlord whose desk is next to yours constantly asks you to do just one…more…thing for them.

Image by Flickr user David Wall (Creative Commons)

By Rieva Lesonsky

Small business owners are more optimistic about hiring than they have been in a long time, according to the latest small business hiring survey by Wells Fargo and Gallup. The quarterly survey examines small business owners’ hiring outlook, their views on the conditions in their companies and their overall economic outlook.

Even though the percentage of small business owners planning to hire employees is still a minority, small business hiring intentions are the highest they have been since January 2008, before the recession began. Why are small business owners planning to hire? The top reasons cited are because their business operations expanded (64 percent), because consumer or business demand increased (64 percent), because their sales and revenues justify adding more employees (55 percent) or because they need to replace an employee who left (44 percent). Government tax incentives for hiring influenced just 7 percent of those planning to hire.

When entrepreneurs go searching for employees, how do they spread the word about their open positions? The two biggest ways by far are word-of-mouth (which was described as a “major way” of hiring by 65 percent) and employee referrals (described as “major” by 48 percent). By comparison, just 19 percent of employers said the Internet was a major way they looked for employees, and only 9 percent of small business owners said newspaper ads were a major way they looked for employees.

Some 85 percent of U.S. small business owners in the survey say they aren’t planning to hire. Why not?

• 76 percent don’t need additional employees
• 71 percent are worried about weak business conditions, including revenues, cash flow and the overall U.S. economy
• 48 percent are concerned about rising healthcare costs
• 46 percent say worries about government regulations are keeping them from hiring
• 24 percent are worried they may not be in business in 12 months

With the presidential election coming up, economic uncertainties may loom larger than usual for small business owners who aren’t certain how the results will shake out and how the election will affect factors such as taxes and health insurance reform.

Small business owners who can’t hire new employees have other places to turn for unpaid assistance. The most common place where entrepreneurs get assistance is from a spouse (21 percent), from their friends (16 percent) or from their children (15 percent). One in 10 say they get help from a relative who is not a spouse or a child, while 1 in 20 use an unpaid intern. Three in 10 say they don’t turn to anyone to help.

Are you planning to hire new employees in the coming year? Why or why not?

Image by Flickr user Brenda Gottsabend (Creative Commons)