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.
Covid-19 has undoubtedly helped Microsoft Teams and Zoom to prove their technological worth. But the pandemic has also underlined just how precious ‘in-person’ social interaction is, in both a work and a social setting.
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 on its way, 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 four 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 out of sight for months at a time.
As life gets back to ‘normal’, what might the long-term effects of Covid 19 be on the form and function of the office?
Here are our thoughts on some of the changes that are 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 expected to offer 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 after 26 weeks of employment (see the Employment Act 2002 and Flexible Working Regulations 2014). This will change in April 2024 when this right will apply from the first day of employment. This is likely to accelerate the hybrid working trend which according to a recent survey appears to be gaining momentum. Acas, the employment advisory service, found that 36% of employers had more staff working from home in 2023 than in 2022, some of this apparently due to the rise in the cost of living.
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 likely to become more ‘experiential’ in nature. We are therefore likely to see far more generous and imaginative break out spaces created within offices to facilitate social interaction. They will also need to inject an even greater element of fun if staff are going to invest in the commute to the office of the future.
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 of the future will have to match that of the very best home office. This might mean for example, that we will see far better acoustically protected study spaces which allow staff to carry out their focused work free from the distractions of the open plan office. Similarly, we are also likely to see 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 will be provided with access to co-working hubs close to where they live. This will allow 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 on average just one day a week working from home, it might be possible for companies to reduce their office footprint by between 25%-50%. The total availability of office space is therefore likely to increase resulting in relative over-supply in several office markets. This is likely to result in 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 will struggle 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.