"Thanks to the pandemic-induced remote working shift and advances in technology making it easier to operate from virtually anywhere, the reality is that the need for a large, centralised office space is rapidly diminishing."
- Simon Bateman - Lakeside Harbour North
Once again, it would appear that we are witnessing a marked new phase in the workplace. At one point, of course, it might have seemed that the need for a physical office footprint might be nearing extinction as employers, in their droves, shifted to a predominantly remote-working set-up. However, this is changing and fast.
Largely coined ‘the Great Office Return’, the past year has seen an increasing number of businesses introduce regular office days in a bid to help reinforce company culture and strengthen relationships. Equally, employees, while clearly fans of flexible working, are pivoting to the associated benefits of a physical workplace in terms of enhanced collaboration, access to resources and the all-important coffee break camaraderie.
In fact, according to a recent study, 36% of UK employees said working in the office helped them with their weekly routine and 26% found it helpful for brainstorming with colleagues.
The result of this emerging ‘new normal’ is yet another shift in the workplace dynamic. Historically, the corporate property market has been dominated by large, centralised office spaces in the biggest city centres. Hereby the remit has been to gain access to the widest possible ‘commutable’ talent pool and take advantage of market proximity.
However, recent trends have begun to challenge this long-standing paradigm. Thanks to the pandemic-induced remote working shift and advances in technology making it easier to operate from virtually anywhere, the reality is that the need for a large, centralised office space is rapidly diminishing.
Add to the equation the high cost of doing business and living in major cities, and it’s easy to understand why both companies and employees are seeking more affordable alternatives. This is seen as many major cities like London, Manchester and Birmingham have witnessed an exodus of businesses and workers to smaller cities or rural areas where the cost of real estate and other expenses are lower.
For example, it is estimated that Canary Wharf, once thriving London’s financial hub, has lost almost £1bn of value owing to a recent string of corporate exits from the district.
Amid this rapid decentralisation of the modern workplace, one recent study reveals that an estimated half of UK firms have now opened offices outside city centres.
Smaller locations, big benefits
And it’s easy to see why. Foremost, there are the vast financial gains to be had. As we all know, real estate in big city areas comes with a big cost and usually entails extortionate service fees and the like – meaning decentralising can significantly reduce outgoings. Additionally, operating in multiple smaller locations can decrease expenses related to utilities, maintenance, and property taxes.
But it isn’t just about cost – it’s about the employee experience too. Fundamentally, decentralised offices closer to where employees live can reduce commute times, contributing to enhanced productivity and a better work-life balance.
Moreover, moving from a big sweeping office floor to a smaller office with less square footage to navigate can also help foster a stronger sense of community among staff. It could be argued that this new typology will help facilitate deeper, more meaningful connections, essential for strengthening existing teams and boosting morale.
From a business development perspective, what’s also great is that moving to less built-up locations can also allow businesses to tap into a wider talent pool. Often, employers may assume that being located in a big city will mean that they have access to the widest and most diverse range of potential candidates.
From our experience, that is not the case. In fact, we know from the various major businesses that have relocated from the Capital to our premier Portsmouth office premises, that occupying a new, less dense region has enabled them to access a broader reach of skilled workers along with a much less competitive market.
The office of tomorrow
And this is just the beginning as we continue to dismantle our traditional perception of work. In the not too distant future, decentralised offices will be the norm, operating as a fluid and adaptive network of workspaces effectively blurring the physical and virtual environments. Different teams will no longer sit in the same corner of the office, where they can simply talk to each other in person as required.
Instead, a combination of smaller, flexible co-working hubs, home offices, and virtual reality meeting spaces will take precedence, allowing employees across any one team or department to work physically in the office or virtually with colleagues spread across continents and time zones. As we are already now seeing, advanced AI and collaboration tools will be at the heart of this, facilitating real-time communication and providing a variety of collaboration spaces designed to deliberately encourage teamwork and communication. In this way, the future office will evolve into a dynamic ecosystem that supports diverse workstyles, is able to respond to market changes with agility and remains primed for innovation.
So long London
As we look to the evolving modern workforce, there is no doubt that the once staple bustling, city centre HQ will become more of a rarity, as more companies seek to benefit from the vast advantages of a decentralised location. While this may require time and investment in relocating and restructuring, the good news is that it provides a vast and exciting opportunity to reduce commercial overheads, improve efficiencies and enhance the effectiveness of talent acquisition efforts.
Looking ahead, the big question for many businesses will not be whether to make the move, but how quickly they will harness the decentralisation opportunity while others are left paying above the odds in Britain’s increasingly ghost-like city centres.
