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The future of the office

Harri Jaaskelainen from our Property Services Integrator team shares his thoughts on the growing discussion around home working and, more importantly, why it is important that offices remain part of the fabric of towns and cities.

Three months of lockdown, 45,000 plus deaths, an increase in unemployed claimants of over 120% to almost three million since March and public sector borrowing increase of about £50 billion in comparison to the same time period last year. 

These are times and statistics no Government official wants to reside over. Whilst these staggering numbers may have discredited some of the earlier medical expert assessments about Covid-19 when the first UK cases emerged at the end of January, this article is not about the Government’s handling of the pandemic (I leave that to the experts). Instead, I would like to add my thoughts to the growing discussion about home working and, more importantly, why I think it is important that offices remain part of the fabric of our towns and cities.

Let’s start with a little story which prompted me to write this piece. 

When lockdown began, we were all asked to work from home. Many of us office-based workers were already working from home on a regular basis so in that sense there was nothing new about it. The biggest difference was that now there was no option to go back to the office in the foreseeable future. On the face of it, the prospect of saving £200 on the monthly ‘standing-in-the-aisle-only’ train fares and getting back approximately two hours a day from the missed daily commutes sounded like a proposition that was both appealing and helpful. 

A few weeks ago, after putting it off for weeks on end, I decided to join a departmental wide social catch-up call on Microsoft Teams. This is a weekly call, organised by our managing director, that has been in the diary since the start of lockdown. Participation is on a voluntary basis so for some reason I had always found myself ‘too busy’ to spare an hour to chit chat about something not work related. At the risk of sounding not genuine, I was genuinely positively surprised as the conversation covered random topics such as our favourite childhood toys, among other things…good belly laughs aside, the call got me thinking about the future of our office strategy.

The last few months have proven that there is little that is preventing our team from being full-time home-based. Provided IT works, we are being just as productive (if not more) as we would be in the office. I suspect, most other office-based businesses would attest to these findings. The million-dollar (read, multi-billion pound) question is: what impact would that have on the wider society? 

City-centre food and drink outlets, their UK-based supply chains and retail shops are the obvious ones that will bear the brunt, as we have seen already with several leading high street names having to lay off staff. But there are others too such as hairdressers, beauty salons, bike shops, taxis and gyms – all of which will face reduced demand as a direct result of office-workers deserting our city and town centres. Then there is also the second wave of impact. City and town centre shops shutting down due to lack of business, and growing vacancy of corporate real estate will drive down not only the face value of the assets, but also the value of the underlying institutional investment funds that so often are the majority owners of these assets. 

One could still ask: why would I need to be concerned if I have no financial interest in any of the above?

We need to remind ourselves that our economy is, for want of a better phrase, an “eco-system” where the different agents are dependent on each other. 

The more redundancies there are – and assuming these jobs won’t be replaced by new job creation – the less disposable income there will be circulating in the economy. This will lead to further reduction in demand; further job cuts, rise in unemployment. These in turn will increase public sector spending in some areas and cuts in others. Public sector borrowing and taxation will go up as well. The chain reaction and the negative impact is clear – wherever you are located along the wealth continuum.

The Government responded to the lockdown with unprecedented financial rescue packages. Whilst the taxpayer backed financial support has offered a lifeline for hundreds of thousands of individuals and businesses to tide them over the worst, economic recovery rests ultimately with us, the consumers. As always in life, we need to consider what impact our individual choices will have on society at large as these choices will inevitably loop back round to impact each and every one of us once again. If we get back to spending again in our town and city centres, we can all play our part in aiding the recovery from the economic fall-out of the pandemic.
rise
Heading back to the office, when it is deemed safe to do by the Government, could be the way to achieve the objective. Sodexo has created a programme to help organisations reopen with confidence that the safety of its clients’ employees and guests is assured.  Click here to find out more about rise with Sodexo.

Sodexo’s concierge service, Circles, is also helping employers navigate the new normal, providing vital solutions and support to ensure employee engagement and wellbeing, you can find out more here.



 

HarriAbout the author 
Harri Jaaskelainen, Portfolio Planner - Property Services Integrator, Sodexo.  Harri is a member of Sodexo’s Real Estate Strategy and Portfolio Planning team, working on our Integrator property management contract at the Department for Work and Pensions to rationalise its leasehold property portfolio that includes over 800 sites across England, Scotland and Wales, including jobcentres, medical assessment centres and corporate offices.

 

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July 29, 2020

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