The Human Factor
In 1994, Bill Gates predicted that the ‘Information Superhighway’ (i.e. the internet) would mean that commuting to an office would become “pointless”.
However, something that Bill Gates had not accounted for was the extent to which human beings thrive on face to face contact.
The Covid-19 pandemic undoubtedly helped Microsoft Teams and Zoom to prove their technological worth. But the pandemic also underlined just how precious ‘in-person’ social interaction is, in both work and social settings.
The data certainly seems to support this view. A survey of 2,000 office workers by business equipment firm Raja revealed that social interaction was what they missed most of all about their workplace.
The ‘human factor’ is therefore crucial to understanding the future of the office. Whilst change is almost certainly underway, it seems clear that the office is far from dead. In fact, it might just be about to evolve into something far more exciting!
The Covid Legacy
The last six years have demonstrated that home working is viable for most of us. Crucially though, employers have realised that they can trust their employees to do what is expected of them, even when they are absent from the office for days, weeks or even months at a time.
As hybrid working appears to be the new ‘normal’ for the majority of office based workers, what might the long-term effects of Covid 19 be on the form and function of the modern office?
Here are our thoughts on some of the changes that are already taking place:
More Autonomy
Expectations have changed. Employees now expect to be able to work from home or indeed anywhere they want, as and when they choose. As a result, employers are offering greater flexibility within employment contracts in order to attract and retain talent. Some are insisting that their staff attend the office a minimum number of days a week whilst others are adopting a more laissez faire approach, allowing staff to determine their own routines. Underpinning this, in the UK at least, is the right for an employee to request flexible working (see the Employment Act 2002 and Flexible Working Regulations 2014). Crucially, from 6 April 2024, this right applies from the first day of employment (see the Employment Relations [Flexible Working] Act 2023). This has accelerated the hybrid working trend. Acas, the employment advisory service, found that 36% of employers had more staff working from home in 2023 than in 2022, though part of this rise was attributed to the ‘cost of living’ crisis.
More Fun
The office now faces competition from the home as well as ‘Third Spaces’ (e.g.’s coffee shops, co-working hubs). As a result, offices are becoming more ‘experiential’ in nature. We are already seeing far more generous and imaginative break out spaces being introduced by landlords in order to promote social interaction, corporate and community events. They are also injecting a greater element of wellbeing amenity as they recognise that if staff are going to invest their time and money in commuting to the office they need to create some significant draws. For example, many new office developments now feature communal business lounges serving free barista coffee and snacks. Other amenities such as podcast booths, wellbeing suites and roof terraces are also becoming increasingly common features. Yet another trend is the introduction of group activity based leisure operations in the ground floor commercial units underneath large office buildings. These might have previously been let to retailers. Now the emphasis is on new leisure offers such as mini bowling alleys, crazy golf and escape rooms. These are all designed to help build social connections for the new breed of hybrid worker.
More Choice
Something that many offices currently lack is a choice of settings to suit different modes of work. This will change as the office evolves into what is termed an ‘activity-based’ working environment. Expect a far more varied palette of quiet zones, collaboration areas, project workspaces and social hubs.
More Focus
The design and specification of the office is now getting close to matching the very best home office. You can see this in the vastly better acoustically protected telephone booths and study spaces which allow staff to carry out their focused work free from the distractions that are traditionally associated with an open plan office. Similarly, we are also seeing a greater number of ‘Zoom Rooms’ for those all-important virtual and increasingly frequent, hybrid meetings. The latter involve a mix of attendees, some of whom are physically present and others that are not.
More Hub (and less Smoke)?
In some organisations, staff are being provided with access to co-working hubs closer to where they live. This allows them to work in a more agile way that removes the necessity to commute regularly into a central headquarters location whilst still providing them with a professional working environment where they can collaborate and socialise with others. A return to the ‘hub and spoke’ office infrastructure that was favoured in the late 1980’s and early 1990’s could well rejuvenate out-of-town business parks which have declined in recent years. However, a lack of public transport and other local amenities might mean these hubs gravitate instead to larger satellite towns giving local high streets a much-needed post-Covid boost.
More Availability
The overall demand for conventional leased office space in major city centres is likely to decline as organisations allow greater numbers of staff to work from home and ‘Third Spaces’. Even if staff spend an average of just one day a week working from home, it is possible for companies to reduce their office footprint by 30%. The total availability of office space is therefore likely to increase resulting in relative over-supply in several office markets. This could lead to increased competition and softening rents. Having said this, Environmental, Social and Governance requirements (‘ESG’) are leading to unprecedented demand for the highest quality space which is proving increasingly difficult and expensive to deliver. The upshot is a two-tier market.
More Obsolescence
Older office buildings with poor ESG credentials, limited lift provision and poor-quality air handling/air conditioning systems are struggling to secure new tenants and will eventually have to be converted to alternative uses or redeveloped altogether.
If you are struggling to assess your future office requirements post-Covid or you need advice on re-negotiating or exiting your current lease, please contact a member of the TAG team by calling 0161 817 5007 or emailing myfutureoffice@tenantag.co.uk.