Hybrid working: Out of office… forever?
During lockdowns, many started working from home for the first time. Now, 91% don’t want to go back to the office full-time. With hybrid models of work being adopted by many, Christian Koch talks to leading CAs about the chances of a new workplace revolution…
This article first appeared in ICAS’ CA magazine.
What does your workspace look like this week? Maybe you’re Zooming in from a lavish, oak-panelled “shoffice” (shed office) or fighting flatmates for space on the kitchen table. Perhaps you’re so nostalgic for office life you’ve sprinkled your spare room with Eau d’Office scented candles recreating the aroma of a “warm 96-page deck left on the printer” (yes, it is a thing); maybe you’re digital nomading from a Bali beach vowing never to board the 07.15 from East Grinstead ever again. Or maybe, shock horror, you’re back in the actual office, gazing around at the distanced desks, mousetraps (the British Pest Control Association reported a 51% rise in rodent activity during the first lockdown, and a 78% rise in November’s) and shiny new virtual-meeting booths.
Whatever your working arrangement has been since March 2020, it appears it could – for part of the week at least – be here to stay. As pandemic restrictions are lifted, hybrid working, where workers split their time between home and office, is emerging as the favoured model for many corporates, including 43 of the UK’s 50 biggest firms. The Big Four are among its biggest advocates, with Deloitte giving employees the right to decide “when, where and how they work” and KPMG staff spending “four-day fortnights” in the office.
Most of this is driven by employee expectations: PwC’s new hybrid policy came after a “direct response to soundings from our people”. According to a YouGov survey, 68% of British staff had never worked from home pre-pandemic; within six months 91% wanted to continue working remotely now and again. While managers mull a maelstrom of issues surrounding trust, productivity and employer-employee relations, hybrid working may have wider ramifications on social mobility, the urban economy (think of reduced retail footfall and half-empty trains), town-planning, even the existential notion of what an “office” actually is. As employment-based epochs go, WFH could be as seismic as the Industrial Revolution.
The office-versus-remote dilemma is one facing many companies, says Alan Pepper CA, Chief Financial Officer/Chief Operating Officer at Essensys, which provides software and technology to the flexible workplace sector. “If you’re an SME, being in the office may be important from a cultural perspective,” he says. “But bosses will be asking, ‘Do we really need to be in? Can [flexible working] make my staff’s health and wellbeing better or attract talent? They’re also questioning whether they need to sign a 10-year lease on an empty box.”
The right to work from home could soon be enshrined in law. The UK government has launched a flexible working taskforce and is reportedly considering legislation to make remote working the “default” option by giving staff the opportunity to request it. Such moves are “dangerous” says Dan Cohen CA, founder of workspace providers Purpose Group. “It may come at the expense of people’s jobs,” he says. “If you’re never going to see your staff, it makes it easier for some firms to hire cheaper overseas labour more informally.”
Indeed, the Tony Blair Institute for Global Change has cautioned that the success of remote working could mean up to six million jobs disappearing overseas.
In or out
Permanent remote working has been embraced by some, including Facebook, Nationwide and accountancy firm BDO, which have told staff they can work wherever they want if their job allows it. At the other extreme are Goldman Sachs and Morgan Stanley, which have summoned staff back in. Such a hardball stance could lead to defections: 39% of US adults say they would consider quitting their jobs if they couldn’t work remotely. Many firms are incentivising staff to return: Goldman Sachs’ London office is offering free breakfast and lunch, while others are coaxing employees with extra childcare, parking spaces, yoga classes and Peloton bikes.
For many large firms, though, the five-days-a-week office pattern looks set to become as extinct as the fax machine. Determining how this hybrid model works in practice is a challenge for bosses, some of whom see homeworking as slacking. To ensure staff aren’t playing with pandemic pups or secretly nursing a hangover on the couch, many leaders have turned Orwellian: demand for time-tracking tools such as Time Doctor, ActivTrak and StaffCop has risen, with bosses watching potential shirkers through their webcams via Sneek (perhaps they’ve read the Instantprint poll which found a quarter of UK employees have napped when working virtually).
Karen Stewart CA, Chief HR Officer at Anderson Anderson Brown, recommends better communication: “If hybrid working is to be successful, communication around planned working hours, location, tasks, deliverables and deadlines are vital to building trust.”
Doubts over productivity may be unfounded, with research during 2020-21’s lockdowns showing workers could actually be toiling harder at home. Since Covid-19 hit, British workers have spent almost 25% more time working according to NordVPN Teams data, typically logging on for 11 hours a day, up from nine. Along with fears that burnout is increasing, our sedentary lifestyles have seen an increase in aches and pains, with more than half of UK homeworkers who responded to an Institute for Employment Studies survey saying they’d developed musculoskeletal problems.
Homeworking has its flaws. There’s no virtual water-cooler where staff absorb the “incidental information exchange”, the serendipitous office encounters that can boost creativity and corporate culture. Being less visible to senior managers could also mean home-based colleagues miss out on promotion, especially if bosses develop an unconscious bias towards staff they see daily. Part of the reason cloud storage firm Dropbox adopted its “virtual-first” model was concerns over “inclusion, promotion, career growth, cliques”.
“There’s an element of business where people socialise around work: lunches, networking, meeting for a coffee, going to the pub on Friday,” says Pepper. “You can’t have that level of engagement on Zoom. Although there will be some who like working from their country home, London’s a lonely place for young people, particularly if they don’t make the connections that come through the office.”
Indeed, many young people have missed out on life-affirming moments over the past 18 months, such as training, camaraderie, the buzz of special projects and, of course, office romances. After many months working in cramped house shares, these younger workers may be keen to return to the office. Yet, under a hybrid model, they could be spending more than older homeworking colleagues, who’d save money on commuting, not buying expensive sandwiches at lunchtime and workwear. It’s a problem highlighted by Deutsche Bank, which suggested homeworkers should pay a 5% tax (on a £35,000 salary, this works out at just under £7 a day) which could raise £6.9bn a year and fund subsidies for lower-paid workers.
Mind the gap
There have been arguments homeworking could widen the gender divide too. Although, as Cohen says, “many bosses have come to the realisation that flexibility isn’t the devil”, University of Sussex research found the proportion of mothers responsible for 90–100% of childcare jumped from 27% to 45% during the spring 2020 lockdown (a “1950s way of living” said one researcher). At the same time, homeworking may have made great advances for disability inclusion. Stewart notes: “Fully remote working opens up new geographic areas for recruitment, providing new opportunities for those with accessibility needs, particularly if there’s no commute.”
Hybrid working could reveal social divides too: after all, those in blue-collar jobs or the gig economy haven’t been flaunting their adventures in banana bread on social media. Recent ONS statistics showed that 70% of staff in Richmond-upon-Thames worked at home during the pandemic; in Burnley, it was less than 13%.
Suburban and rural economies have suffered in recent years but could be revived through hybrid working. The world’s biggest workspace provider, IWG (previously known as Regus), has seen increased demand for flexible office space outside city centres, consistent with the “hub-and-spoke model” being explored by some hybrid firms, whereby they retain their headquarters but have smaller satellite offices elsewhere.
“Enquiries for St Albans and Welwyn Garden City have risen by 60% in Q1 this year,” says Simon Loh CA, Chief Operating Officer at IWG UK. “We’re also witnessing the boom in Cornwall and Wales, where people can still work effectively but visit London or Birmingham for customer meetings or team collaboration events… Meanwhile, traditional commuter towns are now becoming thriving communities with more people using local amenities.”
For many businesses, hybrid working’s biggest boon is perhaps more obvious: a chance to cut costs by downsizing office space. One Capgemini survey found 88% of organisations made real-estate savings in 2020 through remote working. Whether it’s HSBC (shifting to hybrid and planning to cut property rental by 40%), Lloyds Banking Group (looking to reduce office space by 20%) or newspaper publishers Reach (telling most of its journalists to permanently work from home), many firms are relinquishing prime real estate.
“Rather than renting 20,000 square foot on a 10-year lease to ‘anchor clients’, we’re seeing more landlords start to offer more flexible solutions, as well as providing amenities such as cafes,” says Pepper. “We also expect to see a ‘de-densification’: fewer people working with more space: the pandemic has highlighted having lots of people in close proximity isn’t the best thing.”
“CFOs aren’t just looking at the financials [of office space],” adds Loh. “They’re also thinking about sustainability, the carbon emissions of empty retail estate. How do we make better use of that space?” One option is reimagining the office with a greater focus on staff wellbeing and collaboration: wave goodbye to migraine-inducing strip lighting and people squeezed into endless rows of desks, say hello to more meeting rooms, Zoom pods and lots more foliage. PwC is spending £75m refitting offices with cafe-style meeting areas, while Cohen predicts “you’ll get offices looking more like co-working spaces”.
Whether staff spend time here or in their shoffice/kitchen table stroking their pandemic pups, those firms that allow employees to set their own agenda will prosper, says Loh. “Those companies that truly adopt hybrid, and give opportunities for employees to find that balance of where and when they work best, will be the most successful, as they’ll be getting the best response from their workforce… There shouldn’t be any downsides to hybrid working, as it’s about getting the best of both worlds: work and personal life.”
Read “Agile office, agile mind” for more guidance on hybrid working.