After a year of many businesses being forced to adapt to working remotely what are your longer-term plans?
Due to the successes we have seen with remote working, businesses large and small will be looking to cut costs by reducing their spaces. Physical space will always have its benefits… however not like we are used to!
At the end of 2020, Property development firm Accumulate Capital surveyed more than 500 UK business decision-makers and found that: 73% expect to downsize as a result of the COVID pandemic.
In line with this, HSBC recently announced plans to cut their office space by 40% and in February KPMG reported their plans to cut office space with the intention for staff to permanently split their time between home working and working from the office permanently after the success of their emergency COVID-19 measures.
Locally, we have also seen this pattern with the number of businesses downsizing in STEP’s business space tripling since last year.
In the same respect, The WFH Zone’s latest figures as of February 2021 reported that 74% of voters want a blend of home and office working. With only 22% of voters suggesting full-time remote, if you’re thinking of vacating and cutting the cost of office space completely you may need to think again.
In summary, whilst it’s true many of us have woken up to the benefits of remote working and expect this to be part of many working patterns in the future, the office is far from dead.
So let’s say in the not too distant future (fingers crossed) COVID restrictions are a distant memory, but the experience has inspired us to change our ways of working, to adapt our cultures and our staff to re-align their priorities. Allowing your team to work remotely whilst still offering a physical environment that supports teamwork, collaboration, an escape from the home and a place to meet with customers could allow you to cut your office space and costs as a result.
Because we understand small businesses need to change quickly to suit demand, at STEP we support our tenants to expand or downsize as they wish without any additional fees for moving. Therefore our property team know the common considerations involved in downsizing.
As good as it may sound, downsizing isn’t as easy as handing in your keys to your landlord and finding new space there are many factors you should consider:
Rent and Operating Costs
Obviously, downsizing will reduce your rent and other costs that are related to this such as Business Rates. Another thing to consider is your utility bills. In a study by the Better Building Partnership, the average cost for electricity, gas and water in offices was £2.88 per square foot. Therefore, naturally reducing your size of space will reduce these bills.
As an employer, you may wish to consider if there are costs your staff will incur by working from home that you wish to cover such as heating, electricity and internet. However, ensure you check what your legal commitments are, as your staff may benefit from tax benefits, and other reductions in their usual spending by working from home.
If your employees are sitting in rush hour traffic or trusting unreliable public transport, they are bound to be late at least a few times over the year. It is common also for individuals to spend the first 30 minutes of their shift complaining about the traffic/transport, making a coffee, and getting settled.
If you’re a flexible employer you might have a problem with this, however, staff may feel – rightly or wrongly- they need to stay late to make up their hours or simply to get their workload complete; this causes stress.
People who spend more time at their desks (home or office) tend to be less stressed, which means they are more productive and fulfilled in the workplace.
Does your business involve staff meeting clients? Having clients visit your office means less travel time for staff. Less travel time means reduced mileage, fuel, maintenance costs and time. So by vacating your physical space you may think you are saving costs but in the long run, you may find your overheads get higher due to paying more travel expenses. In downsizing and allowing a blended approach to work, there is a positive impact of your team not having to commute every day.
Research carried out by OddsMonkey in 2019 polled 2,000 full-time, part-time and self-employed people in the UK. It found that the average UK worker spends over 164 hours (7 days) commuting per year and are paying roughly £1,738 per year to do so. So if your workforce is working remotely this could be a monetary benefit to them.
The same survey also found one in three people also find their daily commute stressful. Stress has an impact on businesses directly through increased absenteeism, low employee morale, a negative impact on productivity and profits as well as an increase in costs to deal with the problem.
Of course, there is also a clear environmental impact to having fewer people travelling to work each day. Whilst you might feel this doesn’t directly impact your business, consumers are socially and environmentally conscious and tend to buy from brands that focus on being sustainable.
With the majority of businesses switching to a blended workforce, traffic might even become a thing of the past we can only dream!
Staff Software and Equipment
Before fully embracing a blended working style, you should take stock of what software and equipment your staff are using and what they might need.
When in offices, traditionally staff would be using PCs rather than laptops. The average PC desktop set up costs around £71 (per person) per year to run. In comparison, a laptop needed to support a blended working style can cost as little as £13 (per person) per year. However, if you have already invested in PC’s there can be a high initial outlay to purchase laptops.
You then need to consider employee workstations in their homes and ensure you carry out regular desk assessments. Will they need an additional screen, a wireless mouse and keyboard, a desk and a computer chair or other equipment? Remember, you will need to have fixtures and fittings in your office too, but if your downsizing you may have equipment leftover that staff can take home.
Having cloud-based software is also crucial to being able to perform efficiently when working from different locations. Many companies have found that allowing staff to access files from anywhere allows for better time management and prioritising. Some people may log on at night to tidy up their e-mails and to-do lists, some at a free weekend hour and others will no doubt stick to the 9-5 pattern they are used to.
The Future of Physical Distancing
Under the current COVID rules we can expect, as restrictions are lifted, we might be allowed to return to offices with social distancing measures. With a 2-metre gap around every person, your office will accommodate fewer people. Maybe only half of your workforce can physically be in the office at any one time while the rest work from home.
Hopefully, this is a short-term measure, however as quickly as COVID appeared, who knows what the future holds, physical distancing may return. Dubbed ‘Six Feet Offices’, some businesses have decided to keep the 2-metre gap in the hope that this stops the spread of flu, other viruses and minimises workplace sickness.
When downsizing it is worthwhile considering how important to your businesses resilience, being able to have several staff physically together is.
If you’re still confused about what the right move for your business is, our property team is on hand to discuss what’s right for you and your team. They’ll work with you to define how much space you need going forward. You can contact the Property team at email@example.com.