Abstract
The COVID-19 pandemic has been hit the whole German society and with that the way of working as well as the trend of coworking, as it happened similarly in other western societies. With information about governmental measurements, the world of work, mobility and transportation, people’s behavior, companies’ strategies, the real estate market, and changes in new working spaces from different sources this article creates a narration of immediate impacts, medium-term and long-run effects. Finally, this article aims to draw potential coming changes and further trends for coworking spaces.
Marco Hölzel and Thomas Vogl both contributed equally to this paper.
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1 Introduction
Like many European countries, Germany imposed a national lockdown from mid-March 2020 to prevent the spreading of the COVID-19 virus. Shops—except for daily needs—and schools have been closed. Personal contacts have been restricted; borders were also closed. Employees were encouraged to work from home, and employers were asked to allow remote work. Starting from April 2020, the restrictions were slowly released depending on the regional number of infected people.
This situation caused several effects on work and the work environment. The risk of getting infected by other people require to avoid other people. This causes a push for remote work in many industries if knowledge work has to be performed. Physical work isn’t possible to be performed remotely. The rise of remote knowledge work, which started in the 1970 and was previously slowly growing and accelerating in recent years by better digital infrastructure and remote access systems [1]. This trend is often named new work, which was introduced by Frithjof Bergmann [2] and leads to new working spaces, such as coworking spaces, fablabs, or makerspaces.
The first German Hackerspace “C-base” was founded in Berlin in 1995 [3], which can be seen as the first approach to community-orientated shared workspace concepts. Apart from that, the first coworking space “Betahaus” was founded in Berlin in 2009 [3] and still exists today. Since then the number of coworking spaces has been increasing continuously. According to a market survey by the Bundesverbandes Coworking Spaces Deutschland e. V. [4], the number of coworking spaces increased from 300 in 2018 up to 1268 in May 2020 across Germany. At the same time, the geographical distribution of coworking spaces has concentrated on the big cities and metropolitan regions with good infrastructure connections.
From a real estate perspective studies show that coworking spaces are not just existing in the seven biggest and most important cities for the real estate market (A cities) but also in the German D cities [5] and peripheral real estate markets with no regional or national importance [6].
With the contact restriction caused by the COVID-19 pandemic, remote work received a massive boost ([7], S. 19). On the one hand, people were starting to perform their work from home. On the other hand, the contact restrictions caused a massive drawback on new working spaces, as those were places where people come together and work together to avoid the loneliness of working from home, enjoy encountering other people, network, and develop private and professional cooperation.
The effects of the COVID-19 pandemic and the measures to avoid the spreading of the disease cause changes in different temporal horizons.
Immediately people—knowledge workers—were forced to work from home, and new working spaces were shut down [8]. Due to work being performed from home the daily commute wasn’t needed anymore, car traffic declined massively and the occupancy rate of public transport systems was strongly reduced. If available, people moved to their cottages or to relatives in more rural regions to get out of densely populated inner cities [9]. The omitted commute allocate time and financial resources closer to the place of residence and could support shops, services and make encounters more likely in the vicinity, as has been analyzed for the locations of coworking spaces [10].
Medium-term new working spaces were reopened with hygiene concepts of distancing and disinfection. People were starting to use new working spaces or coworking spaces to separate professional and private life and avoid the stress of working at home with family and household issues such as child care, homeschooling, laundering, etc. [8].
In a longer perspective, which is already perceptible to some extent, the real estate market will be influenced. People are looking and partly moving out of inner cities, looking for more space, distance—even to other people—and green. Companies are considering moving to rural areas and following their employees, reducing the footprints of their unused office spaces, or even closing single office branches to reduce rental expenses and create more agile corporate real estate portfolios with shorter and more flexible leases on demand [8, 11].
1.1 Research Focus
This qualitative research aims to give a broad impression of the impact of the COVID-19 pandemic on work, working conditions, and the consequences on other circumstances of new working spaces and the living conditions of knowledge workers in Germany. The research focus is on new working spaces, such as coworking spaces, and is considering the chronological changes initiated by the pandemic, structured in the immediate, mid-term, and long run.
1.2 Research Questions (RQ)
The following research questions are based on the research aim and design and are pursued by a literate review and interviews.
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How have the COVID-19 pandemic repercussions on work with a focus on knowledge workers, their living conditions as mobility, mental health, work-life-balance (RQ 1),
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new working spaces (RQ 2),
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and real estate market for flexible offices (RQ 3).
In 3 temporal phases (TD):
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an immediate perspective (TD a),
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on a medium-term perspective (TD b)
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and in the long run (TD c)?
2 Methodology
To investigate the immediate effects of the COVID-19 pandemic we chose a research design based on instantly available sources of information on the regarded subject. In the meantime more evidence-based publications are available. For this paper, we chose a combination of available reports, coverage, scientific publications, and interviews to generate a narration [12] to answer the above-described research questions.
3 Results
3.1 COVID-19 Repercussions on Work (RQ 1)
Before the COVID-19 pandemic, only 4% of German workers usually worked remotely—regular telework was used mainly by highly skilled and self-employed workers on an occasional basis [13]. This may be due to the fact that in comparison to other European countries, Germany has a strong “compulsory presence or attendance culture” at the workplace [14] and to the existing legislation that has no clear definition for remote or mobile work, which are used in connection with activities outside the workplace are applied inconsistently. In principle, an employer is not obliged to respond to an employee’s wish to work on a mobile basis [14]. The Working Hours Act (ArbZG) of 1994, updated by the European Directive 2003/88/EC, also applies to employees and trainees in times of crisis. Thus, Germany was lacking behind other European countries as e.g. “The German Arb ZG” dates from 1994 when no internet, emails, or smartphones existed.
The ongoing COVID-19 pandemic has increased the number of people working remotely and forced the rapid adaptation of digital technologies in many business activities in Germany and around the world [15]. With the first version of the SARS-CoV-2 Occupational Health and Safety Ordinance (Corona-ArbSchV), which was intended to minimize the risk of infection with the SARS-CoV-2 coronavirus at work (§ 1 para. 1), contact restrictions due to the spreading of the COVID-19 virus employees were called to work from home as much as possible, and employers were forced to enable that. This option was only available for people whose professional duty is knowledge-based and with that virtualizable. Physical working people couldn’t perform their work from a remote place. Therefore, the number of people that worked from home increased to around 25% during the first lockdown in April 2020 and January 2021 [13]. This is accompanied by the temporary approval of remote working regulations and the promotion of digitization and flexible workplace concepts in urban and non-urban areas (TD a).
Indirectly, the ordinance of the SARS-CoV-2 Occupational Health and Safety Ordinance (Corona-ArbSchV) should also relieve local public transport commuters and thus reduce the risk of infection in buses and trains. Therefore, the restrictions and measures taken by governments had a major impact on mobility patterns and flows.
3.1.1 Mobility
With the contact restrictions and the allowance of the employer and the equipment and online accessibility to data and systems of the company, from them as well or partly private owned equipment, knowledge workers could perform their duty from home. With that opportunity, there was no need to commute to the company’s office anymore. As a result, car traffic on highways declined up to 50% around Eastern [16] and city traffic [17]. The government called people to avoid traveling: rail traffic also dropped by 85% in long-distance connections and 65% in regional connections [18] compared to the pre-pandemic numbers. Passenger air traffic drops by 97% [19]. Public transport falls to 37% in the number of passengers related to March 2019 in Frankfurt [19] (TD a).
The relaxing regulations after the first lockdown increase the road traffic again, more than the number of users in long-distance trains or public transport systems. It seems that people prefer the exclusiveness of car mobility to avoid contact with other people and reduce the risk of getting infected. The numbers of public transport users were only slightly rising again [20] (TD b).
3.1.2 Mental Health, Work-Life-Balance
The immediate obligation to work from home has developed different impacts on people’s mental health and their work-life balance. If working people live in a single household they get isolated, one of the main targets of the contact restrictions, but is completely different if you live in a single household or together with a family. Especially the people who live on their own, were the first and main users of coworking spaces because coworking spaces offer them the opportunity to leave their homes for work, meet other people and avoid the loose loneliness of performing work from their apartment like freelancers. Coworking spaces offer a sense of belonging to a community and therefore enhance the well-being and mental health of remote workers that suffer from social isolation [21]. More importantly, coworking space users tend to receive emotional and social support from other individuals using the workspace [22]. With the disappearance of this opportunity and the general contact restrictions the situation for this group was getting worse (TD a).
If working people live in a family, e.g. with children which normally are visiting schools or the daycare, were facing the double duty of performing their work under unknown and hence challenging circumstances and taking care of their children and pupils. Especially for children and their parents, the situation was challenging, due to the higher supervision effort, in distance teaching. Parents have to organize their own duty online and support their pupils in receiving online lessons [23] (TD a).
With the easing of the contact restrictions, people could escape their isolation, and meet others in public, private homes, and on company premises. Coworking spaces were reopened with hygiene concepts [8] similar to traditional offices with disinfection, mask obligation, distancing, and reduced number of people using a room at the same time [24]. The contact with others isn’t that intensive, as it was before without masks, close to others with hugs, cheering, together with many (TD b).
The situation for families depended strongly on the situation in school and/or daycare. If schools were operating again and taking care of the children, the situation for the parents was getting more relaxed, if not the pressure was still high under the demands of work, which were often back at the same level as before the COVID-19 pandemic. Some workers, who could or have not performed their work at the company’s office and were stressed by the double burden of professional and private life moved their workstation from home to a coworking space nearby that had positive effects on their mental health (TD b).
3.2 COVID-19 and Its Impact on New Working Spaces (RQ 2)
In Germany, the number of coworking spaces stood at 1268 in May 2020 (Bundesverband Coworking spaces Deutschland e. V., 2020) and were mainly located in big cities and metropolitan regions. This claim could be confirmed by Vogl and Micek [6] who found in the mid of 2021 that around 50% of all coworking spaces are located in the seven biggest cities but also 19% are located in small regional towns or peripheral areas (8%) of Germany.
As already mentioned the COVID-19 pandemic and the governmental regulations led to a rapid increase in the number of people working from home [25] due to the high share of the knowledge-based workforce. Therefore, companies and public services enable employees to work remotely by providing equipment, devices, and remote working/access infrastructure. The contact restrictions didn`t allow meetings and tenants stayed away. New working or coworking spaces were forced to shut down in the first lockdown and suffered losses. Applying rules for keeping distance and hygiene in the working space, the tenants gradually returned [26]. The massive gap between the contract duration of coworking operators and their tenants was seen as a high risk for the sector [27]. But during the lockdown, a new client group discovered opportunities in coworking spaces. Besides the typical coworker such as e.g. freelancers and entrepreneurs especially employees of companies who get anxious by parallel working-from-home and household duties (including schooling) evaded to coworking spaces. These new clients could partly replace a group of coworking space users which left with the lockdown and never came back to the coworking space [28] and may led to a growth of coworking spaces in more peripheral areas, where many people live (TD a/b).
Consequently, financial support opportunities were established by the European Union (LEADER—Liaison entre actions de développement de l’économie rurale), the federal government and state governments. In this context, the German Coworking Federation, in cooperation with deskmag (2022), conducted an online survey with operators of existing coworking spaces in the summer of 2020. The study found that 62% of the coworking spaces owners applied for urgent financial support in the wake of the outbreak of the COVID-19 pandemic, which nearly 40% rated as very helpful and 56% as somehow helpful. According to the findings it can be said that when help was actively sought and requested, the operators of coworking spaces were mostly satisfied with the support from the German government. Consequently, only 3% of the operators saw their financial situation as acutely threatening their existence during COVID-19 [29]. These findings are in line with Mayerhofer [8] who conducted a survey within the German Coworking Federation (GCF) from June to August 2020 and found that 46% of the respondents reported a satisfactory business situation and just 9% of the coworking space operators considered their situation as very bad and 29% as rather bad in June. Further, the investigation showed that the coworking space operators were optimistic at the beginning of the pandemic which changed with the imposition of restrictions and lockdown measures in April and finally turned back positive in June 2020 when the infection rates decreased, governmental measures were eased, and financial support was offered [8]. Besides, the study asked about the income situation and identified on the one hand an income decline of 36% and on the other hand, a decrease in costs of 18%, which is probably due to financial support and a reduction of personnel costs and energy consumption associated with unused workspaces. Further, the study showed a strong and loyal customer base. Consequently, the surveyed coworking spaces haven’t claimed any contract terminations or discounts (TD b).
After the first lockdown, the regulations got relaxed, but still with hygiene concepts of disinfection, mandatory FFP-2 masks, and distancing. It was possible to meet again in the office, but with a reduced number of people. The same was possible for new and coworking spaces, they could operate again, host workers, and give them the opportunity to meet others. Both spheres—the traditional office and new working spaces—were keeping and making use of the opportunities of remote and virtualized work, by installing remote work policies, online and hybrid meetings, etc. [30] (TD b).
3.3 COVID-19 and Its Impact on the Real Estate Office Market (RQ 3)
Major cities in Germany were already suffering from rapidly increasing rents [31, 32] and real estate prices for years [33] due to the financial market and the swarm city-effect [34]. When it was realized how far-reaching teleworking was possible, the first forecasts were made for the housing [35] and office markets [36]. Some authors detect a trend toward rurality [37] even before the corona crisis, and their numbers increased during the last year [38]. Although rural dwellings are generally larger than urban dwellings, there is a growing demand for rural work opportunities outside the home, further intensified by the increasing number of remote workers due to the COVID-19 crisis. Since 2019, CoworkLand has been committed to spreading coworking spaces in rural areas, initially only in northern Germany but now all over the country. The concept of the commuter port is interesting. This concept combines a ring of coworking spaces around a metropolis and relieves commuter traffic [39].
Before COVID-19, Germany, the biggest office market in Europe, was with 3.85% of the global coworking stock considered the fifth largest and one of the fastest coworking markets in the globe [40]. The same applies to the office markets in general. With a total office space take-up of about 4.000 million m2 in the big 7 cities, Germany shows the second highest value of the last 10 years in 2019. Especially Berlin as the “coworking capital” peaked with its office space-take up around 1.000 million m2 in 2019 [41]. According to a report published by BNP Paribas Real Estate, this development is, among other things, due to increased demand in flexible workspace facilities [42], which is associated with the entering of global coworking operators in local markets that observed a growing demand of corporate users and the increasing common understanding of coworking spaces as a real estate investment opportunity [8].
As mentioned above the majority of coworking spaces are located in the large big cities of high importance for the national and international real estate office market. But surprisingly, almost 20% were located in small regionally-focused towns with small office stocks and insignificant lease take-ups per year [6]. This shows that aside from the big cities also the secondary locations of low importance for the national and regional office market are attractive for coworking operators.
The implemented regulations to stem the spread of the COVID-19 pandemic affected the office market and therefore the predicted growth of coworking spaces. Thus, most of the studies expected negative effects on the coworking sector that went from lower growth rates to a diminishing number of coworking spaces. Besides, the German real estate office market had a difficult fight on its hands in 2020 because of the restrictions and the associated changes in working life. Thus, the office space take-up dropped sharply to about 2.500 million m2 to their lowest level in 10 years in Germany (TD a). In 2021, the downward trend has slowly stabilized and the office take-up dropped back with 3.110 million m2 to the same level as 2015 [41] (TD b).
4 Summary
Restrictions have hit the coworking sector hard at first, but only for a short period as financial support opportunities helped coworking space providers and a new type of coworking space users were found. With the trend that people tend to move out of inner cities and the separation of private and professional life, coworking spaces in the outskirts and hinterland of cities or more rural regions new locations of coworking spaces are more likely to become a substantial way of coworking.
With the contact restrictions, commuting to offices was reduced and coworking spaces close to employees’ homes became an attractive alternative for remote workers which is in line with findings from other studies [43]. Driven by these changes and supporting systems, the development of coworking spaces in peripheral locations as well as the subletting of unused workspaces in corporate premises has led to the growth of coworking spaces in non-urban areas [43, 44].
4.1 Conclusions
4.1.1 Outlook of Work, New Working Spaces, and Real Estate Office Market in the Post-COVID-19 Area (TD C)
4.1.1.1 Work
The COVID-19 crisis gave a boost to remote working [45]. When people were called to work from home as much as possible, and employers were forced to enable that, the number of people who worked from home increased rapidly [25]. Many people preferred to continue remote working even after the restrictions were lifted [46].
As a result of the developments and the expected change in the way of work in some sectors and the public sector, forms of telework according to § 2 para. 7 sentence 1 of the Workplace Ordinance (ArbStättV), mobile working and home office regulations combined with trust-based working time are now integrated into employment contract regulations or in company and service agreements. Further, the Federal Ministry of Labor and Social Affairs has launched a legislative initiative for a legal regulation on mobile work to promote and facilitate remote work [14]. The draft is currently being reviewed by the individual federal ministries.
4.1.1.2 Mobility
The numbers of road traffic and public transport systems are back to the levels from before the pandemic. In the meanwhile, other measures like the 9-Euro Ticket (a ticket that allows to ride all public transport services and regional trains for 9 Euro per month—only June, July, and August 2002) were implemented to facilitate commuting and reduce travel expenses. But it seems reasonable that, without the virtualization of meetings and other remote work options, mobility demand would be higher than now. Remote work enabled people to work from other places than the company’s office. This trend has already started, before the pandemic and only a few got the opportunity to make use of it. Due to the experience of the pandemic, more companies and people could make use of it.
4.1.1.3 Mental Health, Work-Life-Balance
In the long run, a growing share of remote work provides several options to be regarded, depending on the perspective and the share of remote work. It will be an issue for companies to keep in touch with their remote working employees for several reasons. Firstly, the level of cooperation within teams has to be kept high, and communication—formal and informal. Secondly, Employees want to be regarded, not observed—more to say—employees want their work to receive attention from the management and leader. Thirdly, avoiding the daily commute could save the time of the employees, which they can invest in their family, friends, the job, or voluntary tasks at or close to their home. Maybe the decision for the place of residence could be taken disregarding the employer’s location. Current job offers suggest this option. Some freelancers took the opportunity to work from where they wanted even before the pandemic. It is imaginable that this kind of work will increase more due to a broader acceptance of remote work.
People who get anxious by parallel working-from-home and household duties (including schooling) evade this source of stress by entering coworking spaces. On this matter, many authors predict a boom in coworking spaces after the pandemic crises [47,48,49].
4.1.1.4 Real Estate Office Market
From a long-run perspective, we have to look into the future, but it seems as if the trend of remote work and access to data, systems, and services, hybrid or online meetings will continue for several reasons, firstly, professional life is easier to organize. Not everyone on a team has to be at the same place to collaborate. Secondly, employees are saving time and money by working and cooperating with colleagues remotely. Thirdly, companies are saving money if employees do not have to be posted for a project to a remote branch office. Fourthly, companies can decrease their rental costs by reducing the footprint of the office and running desk sharing policy, and enhancing the creativity of their employees by creating corporate coworking spaces concepts.
4.1.1.5 New Working Spaces
Future predictions of a shift in the use of coworking spaces by corporate remote teams frequenting coworking spaces for their weekly meetings outside of their usual home office [50]. This may further contribute to the growth potential of the German coworking scene, adding to the initially outlined changing perception of flexible office space in the German real estate market.
The phenomena called “Entgrenzung der Arbeit” [51, 52], that comes along with work which is performed remote and hybrid, leads to some new types or models, which partly combine work and life, such as Coliving, Hoffice (combining ho-me and o-ffice) or Corpoworking, and Corporate Coworking [53]. These new modes could provide opportunities to renegotiate the relation of time and space as well as work and life.
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Hölzel, M., Vogl, T. (2023). Impact of the COVID-19 Pandemic on Remote Working and Coworking Spaces in Germany—Narrative Literature Analyses. In: Akhavan, M., Hölzel, M., Leducq, D. (eds) European Narratives on Remote Working and Coworking During the COVID-19 Pandemic. SpringerBriefs in Applied Sciences and Technology(). Springer, Cham. https://doi.org/10.1007/978-3-031-26018-6_5
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