Coronavirus hasn’t marked the death of the office – it’s just a new beginning

After months stuck in the same place, the pandemic has put quality of life outside the workplace into focus. It hasn't caused remote working or the flight from the big cities, but it's accelerating those trends

“You’re on mute” is now undoubtedly the refrain of 2020, during which a great many office-based employees will have spent months working from home. But despite the tedium of interminable video calls punctuated by pets and children, it has become fashionable to speak of offices as a relic.

In this vision of the future, children will go on school trips to the Museum of the Office, and peer at models of suited office workers talking to each other around the water cooler, having meetings in conference rooms, and tapping away next to each other at long-forgotten full-size keyboards. They will ask, “Why don’t they just Zoom each other, mummy?”

There are good reasons to doubt that this is how things will really play out. Polling carried out last month (June 2020) by business website operator Verdict found a majority of employees want offices to be a part of their working pattern after lockdown. Three in four said they wanted to work in the office at least some of the time, with only a quarter saying they prefer to work remotely full-time.

This means the anticipated wrangle over whether people come back to their offices or not may never materialise. As an employer, we have – of course – enabled everyone to work from home through the crisis. But our office has been open to those who want to come in since the beginning of July, and a number of our team members have started returning voluntarily.

We’ve followed government guidelines to make the working environment safe. In turn, our staff have been coming to the office because they want to and because they see the productivity and social benefits, not because anyone decreed they had to. It has been really positive for colleagues to talk together and enjoy each other’s company again, sharing their experiences post-lockdown.

Some of the world’s most successful businesses, including Facebook and Google, have designed their offices to increase the chance of “collisions” – unplanned interactions – which they believe increase productivity and creativity. Even with social distancing, in an office environment, employees will still make coffee and talk informally in the day, and they will share knowledge and ideas as they do so.

The bonds of affection or respect built up for our colleagues prior to lockdown have sustained us through this period. Now we need to return to seeing each other in person to renew those bonds, and to make new ones with recent recruits. The psychological benefit of genuinely knowing those we work with – in three dimensions – remains powerful. They may not have thought they would before Covid-19, but people have missed their colleagues.

Today, easy headlines suggest there are cost savings for any business willing to downsize their office space. But the reality is more complex. Our research shows office costs today are a much smaller part of a company’s overhead than staff costs. Whereas in the 1970s firms spent as much on their premises as on their personnel – the balance has shifted considerably over the last five decades. By the 1990s office costs were 30 per cent of salary costs; today the figure is seven to 10 percent.

Recruiting and retaining talent is now the highest cost for employers. People stay in companies often due to the teams they get to work with. They do not get the full benefit of those teams while working from home. Employers run a real risk of losing their most valuable assets – their people – for only a marginal saving by not providing a shared space to use at least part of the week. So keeping everyone at home is a false economy.

Firms will, however, evaluate what they need office space for, how long it is needed each week, and by whom. Flexible spaces – appropriately adapted for social distancing – will become more attractive to growing companies so they can expand and contract with the needs of their teams. That means demand for office space may not come back commensurately with the re-growth of the economy, or even to previous levels. But flexible spaces should see benefit earlier and disproportionately.

While most of us will not live, long-term, without some degree of personal interaction with colleagues, almost everyone would be pleased to live without lengthy commutes. Crowded tubes are essential to life in many parts of London but also vectors for infection should the pandemic spike again. Even as coronavirus dissipates, the uneasy feeling that crowded, enclosed spaces are unhealthy may not.

Before the pandemic, London was already the only region in the UK with more people leaving for elsewhere in the UK than arriving. According to data from the Office of National Statistics 94,000 more people moved out of the capital than moved in, during the year to summer 2019. Outward migration was higher still in 2016 and 2017, and there is every reason to expect it to increase again. Were it not for international immigration, the size of London’s overall population would actually be going down.

It is easy to see why. After months stuck in the same place, the coronavirus has put quality of life outside the workplace into even greater focus. Office spaces outside central London are more popular than ever, and Britain’s buoyant “second cities” are booming. There is a vigorous competition on metrics between Birmingham and Manchester, with many other wonderful cities competing in spirit.

Remote working and moving out of the capital are phenomena accelerated – not formed – by the coronavirus. Neither means consigning banks of desks and swivel chairs to the scrapyard forever. But both mean a change to what offices are like, where they are located and how often people will be expected to be present. If the result is a UK economy less reliant on London and the south-east, and an improved quality of life, it cannot come too soon.

Brandon Hollihan is a founding partner of real estate investment firm Castleforge Partners