The evidence is overwhelming, and it pretty much all points in one direction. The post-pandemic future will see a substantial reduction in office space as people become accustomed to working from home.
Let’s take a look at some of the many surveys carried out over 2020. A global survey by Global Workplace Analytics and Iometrics found that before the pandemic 9% of people were working five days per week from home, another 22% doing so at least one day per week, and a further 20% doing so 1-4 days per month. During the pandemic this rose to 77% working from home five days per week, and only 6% never doing so.
Figure 1: Work from home before and after the pandemic
(Source: Global Workplace Analytics & Iometrics, Global Work-from-Home Experience Survey, May 2020.)
You can see in the second chart how the percentage of working from home are redistributed up the chart, with the highest preferences around 2 and 3 days per week.
A survey conducted by IBM of 25,000 US workers found that 54% of employees would prefer to work primarily remotely. And a survey by CBRE found that 85% of employees would prefer to work remotely at least two to three days a week in the future.
And overall, these surveys are showing people are generally finding home working to be just as productive if not more productive than being in the office.
So many of the blockers that existed before the pandemic have been removed. These constraints include management lack of trust, lack of familiarity with working on or managing distributed teams, paper-based process and lack of the right technology provision (infrastructure, kit and software).
There are numerous such surveys with similar findings.
For context, though, it’s worth noting that the Office for National Statistics (ONS) in the UK found that while in April 80% of white-collar workers were working from home, it was 46% of the workforce overall. The 54% who were not working from home are of course in essential services like healthcare and other hands-on sectors, including those who were furloughed during this time.
What does this all mean for the “return to the office” post-pandemic?
There’s a growing consensus that hybrid and remote working will become the norm for the majority of office workers. An analysis by Boston Consulting Group found that 65% of employees expect to work remotely at least some of the time, with the majority (47%) expecting to work a hybrid pattern between home and office:
Figure 2: Expectation of days at home, in the office, and hybrid pattern
(Source: Boston Consulting Group, Remote Working and the Platform of the Future, 2020)
The Global Workplace Analytics/Iometrics survey found 2-3 days per week working remotely as being the most likely scenario post-pandemic.
A report for Microsoft for the Wharton Business School, Building resilience & maintaining innovation in a hybrid world, found 88% of leaders expect a more hybrid way of working in the longer-term.
In the 27 countries of the European Union, official data is available covering all workers, not only office workers. In 2019, 11.1% of the workforce were working from home “usually” or “sometimes”.
During the pandemic, this has risen to 33.7 only working from home, plus 14.2% working from both home and other places.
Figure 3: European workers’ location of work during lockdown
(Source: Eurofound, Living, Working and Covid. 2020)
In the countries most badly hit, the rate is higher. Spain, France and Italy all have rates over 40% and Belgium over 50%. For the total workforce, this is similar to rates in the UK (now, of course, not part of the EU).
Looking to the future we can see again an increased appetite to work from home. The next figure shows the varying appetites for this according to their experience of working during the pandemic:
Figure 4: Expectations of frequency of working from home, based on where people mainly worked during the pandemic
(Source: Eurofound, Living, Working and Covid, 2020)
Overall, 78% of employees want to work from home at least occasionally. And this is much higher amongst those who worked at home exclusively or partially during the lockdown.
In essence, having had the experience, workers are voting with their feet as far as the return to the workplace is concerned.
Local offices and coworking spaces
Some studies have also looked at the option for using local offices or coworking spaces post=pandemic.
CBRE’s Workforce Sentiment Survey in the summer asked about the option of working closer to home – “When the COVID crisis is over, how often would you consider working at a company-provided location closer to your home (e.g. coworking space, satellite office, etc.)?”
Figure 5: Willingness to work at local office/coworking centre, by travel distance
(Source: CBRE, Workforce Sentiment Survey, August 2020)
Coworking spaces and flexible serviced offices have been through a difficult time during the pandemic. However, there is evidence for the industry that interest is reviving. One change that is evident is that coworking spaces, which in the past have mostly been used by freelancers, startups and small businesses, are now attracting more employees of larger organisations.
This sees to come from two directions. First the need for a more professional environment than the home sometimes offers, and a reluctance on the part of people to use public transport to go to the workplace. Something much more local is preferred.
JLL predicted in a report in early 2019 flexible space will grow by average 25-30% per annum to 2025. Their project was that “flex space could represent as much as 30% of some corporate portfolios by 2030”. “Flex space” incorporates more traditional serviced offices (like Regus centres), coworking spaces and premises that provide a mix of the two. That growth has been interrupted, but is likely to resume in due course.
The bottom line for real estate
There are a few outliers amongst commentators who think that organisations will increase their real estate footprints due to the need for social distancing. But the options for remote working are leading in the opposite direction. Most organisations are looking to reduce the amount of property they occupy. This will intensify trends that existed before the pandemic.
The Times (28.11.2020) reported that “Britain’s 12 largest property funds have lost more than £636 million in value since the first lockdown in March amid growing uncertainty over future demand for offices, retail spaces and hotels.”
Savills, the global real estate services provider, has reported increased negativity around future office demand from occupiers, though investors are keeping their fingers crossed:
Figure 6: Investor and occupier expectation of future demand for real estate
(Source: Savills, Assessing the Long-term Impact of Covid on Real Estate, in Impacts magazine, 03.2020)
Gartner, surveying nearly 900 Chief Finance officers, has found that 74% of CFOs believe their will be a permanent shift towards remote working. The implications for property rationalisation are stark.
“Yes, but …”
There are regular articles in the media about the limitations of working from home, the need to ensure team cohesion and, for many people, a preference to be together in the same space for more intense conversations and social interaction. There are issues about suitability of home environments, especially for younger workers, and about people new to an organisation or new to the workforce finding their feet.
These are issues that have been raised many times over many years as organisations move into smarter working. There are known solutions.
Research, e.g. by Leesman Index and by Marco van Gelder, University of Tilburg and Veldhoen + Company, show that for the majority working from home the advantages outweigh the disadvantages. We’ll explore this more in another article, and also look at ways to address the issues involved.
Overall, it seems unlikely that the “Yes, but…” arguments will deter organisations from rationalising their real estate. The challenge now is how to optimise office and other spaces for the best workplace experience, and how to manage the interface between activities in work locations as seamlessly as possible. More on that in a future article!
A future with work activity permeating through all geographies
We’re looking at a future of workplace where the office is smaller, but the alternative places to work are more abundant.
Even allowing for some return to previous working practices post-pandemic, we can expect a doubling of the numbers who work full-time and part-time from home. Those who work part-time from home will do so more frequently.
The increased level of interest in working in a local office or coworking space adds an additional dimension to this. Probably the demand for these shared working spaces is a little suppressed at the moment due to the need for social distancing. But when that passes, as hopefully it will by later 2021, we can expect to see considerable development in this field, picking up on trends that were well established before the pandemic.
So the future landscape of “the workplace” will be much more varied. Change looks set to be driven by greater employee choice, increased remote work options, and organisational aspirations to reduce real estate.
The decentralisation of work, trend already underway over the past quarter century, is set for a major acceleration over the next decade.
The implications of this for workplace design is explored in After the Pandemic – What’s next for Smart Workplaces