A changing need for office space?

7th August 2020

The UK Office of National Statistics has reported that nearly 30% of adults were working exclusively from home at the start of July.1 With restrictions on working in the office having significantly eased from 1st August, businesses are now allowed to be far more flexible with their working practices, albeit whilst still sticking to social distancing measures. With the BBC reporting that 91% of office workers favour homeworking at least part of the time, it will be interesting to see whether companies adapt to these changing attitudes.2


Whilst others have put plans in place to begin a phased reopening in September to coincide with the expected re-opening of schools, others have opted to re-open earlier. The investment bank J.P. Morgan has introduced a private nurse to the site and employed the use of thermal cameras to monitor the temperature of staff in order to facilitate the reintroduction of staff to the office. Elsewhere, Shoosmiths, the law firm, have stressed that workers will be able to choose whether they wish to work from home or in the office from August, with those wishing to work in the office having to register their attendance three days in advance. Due, in part, to the unpredictable nature of the COVID-19 pandemic, a few businesses, such as BP, Clifford Chance and GlaxoSmithKline, have yet to announce any timescale for when employees would be expected to return to the office.


In light of the COVID-19 pandemic, many companies have had time to reflect on their business practices and how their employees work. A recent survey by the Royal Institute of Charted Surveyors found that 93% of businesses were looking to reduce their office footprint, a trend that is predicted to continue over the next two years as demands for office space, in general, have declined by 79% in the second quarter of 2020.3   One of the reasons for this has been the ease with which employers have adapted to home-working, with one survey by Lloyds finding that 89% of their staff had adapted well to home-working and two-thirds wanted to work from home more in future. 4 The consultancy firm Stanton House, who have offices in the UK, USA and Hong Kong, found similar results from a poll they conducted on LinkedIn, finding that 54% favoured spending one to two days in the office; the survey also found that 18% favoured total homeworking and 4% wanted to go back to the office for four days or more a week.5 Many industry leads have taken note of the work-from-home trend, with Morgan Stanley CEO, James Gorman, stating that he can ‘see a future where part of every week, certainly part of every month, a lot of our employees will be at home’.6 Further to this, experiences from this pandemic, have been influential on company’s plans to rethink their office footprint, with the Lloyd’s survey influencing their decision to consolidate its office space into six strategic hubs across the UK. Similarly, NatWest, whose staff will continue to work from home until 2021, have advocated for a hybrid model between work and home, pointing to the need for an element of office work in order to strengthen company culture, a stance similar to that of Vodafone, Google and UBS Group who have all announced plans to expand working-from-home.7 Taking the work from home trend further, New York-based Two Trees Management Owner, Jed Walentas, has pointed to the fact that ‘If you got two and a half million people in Brooklyn, why is it rational or efficient for all those people to schlep into Manhattan and work every day?’, a rationale which can be applied to any major economic hub in the world.8 Along this line of thinking Facebook founder Mark Zuckerberg, following in the footsteps of Twitter, has announced that he expects half of the company’s global staff to be working from home for the next five to ten years. Whilst not for everyone, the pandemic has allowed companies and employees alike to experiment with homeworking, and its influence should be apparent to changes companies are expected to make in the near future.


A further reason for a reduction in office footprint is the ability to save on business costs. Whilst this has arguably been sped up by the economic impact of the COVID-19 pandemic this is not a new phenomenon and in the past nine years, London has reportedly reduced its office space by six million square feet. However, the impact of COVID-19 has been noticeable, with a report by Savills revealing that since the lockdown began, companies in central London have ‘have sought to offload almost one million square feet of office space’. Of these companies, 16% are banks and Barclay’s, Credit Suisse and Morgan Stanley are all reportedly reviewing their London footprints.9  With the estimated rent per office seat in the UK ranging between £150 to £1500 a month, depending on location and not including utilities, security and maintenance, as opposed to £207 annually for homeworking, the architecture firm Cornerstone posit the belief that future office space could be reserved for critical support functions such as IT and on-site servers, or ‘office space that caters to critical in-person meetings and events, such as new hire onboarding and employee training’.10 11 This money saved by reducing the office footprint could then be reinvested into setting up homeworking stations for businesses, and according to the business consultancy firm Lambert Smith Hampton, the money saved could be considerable. For example, a 50% reduction in prime office space in Bristol for 200 staff would amount to a £3.9 million saving over five years, or a £6.2 million saving when applied to the City of London.12


It would appear that COVID-19 has been treated by many businesses as a means of experimentation for future ways in which business practices could potentially evolve. Whilst some businesses may have had a taste of homeworking in the past, sheer necessity has brought it to the masses, speeding up the evolution of the workplace. Although total homeworking is neither universally wanted nor universally plausible, it is likely that some of its characteristics will become imbedded in working practices long after people return to the office.