Shared workspace megabrand WeWork filed for Chapter 11 bankruptcy on November 6. The global company, known for facilitating the coworking shared space, has begun closing offices around the world, following its tumbling stock prices after the announcement. Their value dropped from $47 billion to less than $50 million with the news releasing.
WeWork’s risky business model of direct long-term leases is just one of the reasons that the company is failing in such a surprising and unsurprising way. The company chose to lease real estate directly from the commercial landlords, and use collected membership fees to pay the rent.
This method saw quick earnings from the membership fees, but the long-term lease cycles not matching the use of the spaces quickly led to issues with income. And then the pandemic hit WeWork even harder with a large cancellation of memberships, cutting them off at the knees for income. WeWork filed bankruptcy listing nearly $19 billion in debt.
“It wasn’t the pandemic that broke WeWork, it was their business model,” believes John Arenas, CEO of coworking company Serendipity Labs, which operates in the U.S. “I’ve been through four recessions in this industry in 30 years – and a pandemic, so that’s five – and a long-term lease is longer than the cycle – it’s just a mismatch that way.”
The Future of shared workspaces
Does this mean the end of the shared workspace? Sara Sutton, CEO and founder of the remote-job service FlexJobs, believes that the shared workspace is more important than ever.
“Prior to the pandemic, there was so much evangelizing that still needed to be done about why hybrid and remote work should be integrated into organizations,” she says. “We don’t have to evangelize that anymore. Everyone knows it’s established, and organizations are now formalizing their remote or hybrid stances.”
“Coworking spaces offer flexibility, and a great opportunity for social interaction and community, which are going to be very important to offset some of the elements of remote work that people are increasingly aware of, like feeling lonely or craving social interaction,” she says. “Remote organizations are leaning more heavily on [flexible] workspace as an integrated part of their strategy, offering subsidies or actually having teams in the same area using coworking spaces as a local headquarters.”
Shared SCIF Spaces?
But how can a shared workspace benefit the security clearance holder? Clearly, you can’t share a workspace in a Sensitive Compartmented Information Facility; or can you?
The Intelligence and National Security Alliance (INSA) has been pushing for agencies to fund and certify shared SCIFs to give workers with a clearance more flexibility in where they can work.
“The economy as a whole over the last 10 years or so, at least up until the pandemic, started shifting to people having a lot more flexibility in where they do their work, because the focus was really on how people did their work and what they produced,” Larry Hanauer, former vice president for policy at INSA, said on Inside the IC. “So why not apply the same logic to the trusted workforce?”
Hanauer believes that building classified co-working spaces could help intelligence agencies with recruitment and retention challenges.
“I think there’s wide agreement that we have a bit of a crisis in the cleared workforce,” Hanauer said. “It’s increasingly difficult to hire and clear people who have advanced technology skills, foreign language fluency, and other necessary abilities, particularly when Silicon Valley tech firms can hire them in an instant, at twice the salary without having to go through a clearance process. And it’s harder to hire and retain cleared personnel if they have to make a long commute into their organization’s SCIF. So the key issue is that they do their work in a secure space. Why does it matter where that space is located?”
Hanauer also stated that shared SCIFs would allow for more small businesses and startups to compete for contracts in the intelligence community.
“Right now, many small businesses don’t have the resources to build a SCIF and get it certified,” he said. “That’s a costly and time consuming process. And without access to a SCIF, they can’t get a contract that allows it to do classified work. They can’t even read or respond to a classified [request for proposal] so they can bid on a classified contract.”
Two of the biggest hangups for the creation of shared SCIF spaces are certifications that are tied to contracts, and funding.
Security agency contracts determine the security measures in places. If the agency sharing the SCIF doesn’t meet the same requirements or technology system requirements, those certifications cannot be met and they are unable to use that space.
The idea of shared SCIFs is not science-fiction. The idea will need buy-in from Congress, and further action and research. It will also need support from the Office of the Director of National Intelligence.
“That’s kind of a bureaucratic question,” Hanauer said. “It’s really not important what agency signs the paperwork and does the inspection. Because everyone who uses that SCIF would be doing work that furthers the intelligence community’s mission, the Department of Defense’s mission, and overall the nation’s interests.”
In the end, it doesn’t matter which agency sponsors, inspects and certifies the SCIF, as long as the intelligence community agrees to move forward with the idea, said Hanauer.
