WHERE DO YOU WORK? FROM HOME, HEADQUARTERS OR A NEW REGIONAL HUB?

Estate

There is anecdotal evidence that some big professional employers are saying adios to their spacious city offices.

They’re not abandoning them completely, but many are considering sizing down to something that will accommodate fewer staff – because with the cost of energy alone, why heat and light a huge office space if only a handful of staff are there at any one time?

“We are in a transition phase,” according to Guy Parkes, partner at commercial property agents Vail Williams. “There isn’t yet a clear trend from office occupiers. It’s more about getting staff engaged back in their workplace, wherever that may be.

“Office occupiers have been using this year to encourage their staff back into that rhythm and are starting to move from a defensive position into a planning phase.”

What is certainly happening is that large firms, which have traditionally occupied thousands of square metres of office space in central city locations, understand that how staff worked pre-pandemic, is not how they want to work in the future.

In August, Somerset MP Jacob Rees-Mogg, then Secretary of State for Business, Energy and Industrial Strategy, made headlines after laying out plans to sell off £1.5 billion of government space in central London. He said taxpayers should not have to fork out for half empty buildings.

Other tenants and owners are likely to follow his lead.

Employers must tread carefully to keep staff

But professional firms need to tread carefully. They don’t want to lose valuable staff by forcing them back into the office, equally they realise that collaborative office life boosts camaraderie and productivity –and helps maintain a company culture. It’s just not the same on Teams, Zoom or Slack.

As employees began to return to the office last year, employers said: “Come into the office if you feel you need to. Don’t if you don’t want to. It’s up to you”.

Many companies felt they had to offer flexibility in a tight job market, but employees are also realising they may need to be in the office more to ensure visibility to employers.

Few company bosses will admit this, but the expectation is that those who want promotion will return to the office. Employees who aren’t in every day could miss out on the corporate culture and real-time contribution to decisions and actions.

Some companies are starting to mandate at least three days in the office. A common suggestion is that they come to work on Tuesday, Wednesday and Thursday so work can be done together. Mondays and Friday can be for report writing or reflection time.

What does this mean for office real estate?

Guy Parkes at Vail Williams says that he expects companies to adopt a “hub and spoke” approach, although it hasn’t happened quite yet.

“When a tenant’s lease in London or another big city ends, it is possible they will look at a smaller hub space in London and grow their regional spokes to be closer to residential areas.”

That means that staff can work from wherever they are most efficient. If a workplace isn’t accessible, they can work from home, or serviced offices.