Shirley Giles investigates the impact of the information technology revolution on commercial occupiers’ space requirements.
The technological advances of the past 20 years have revolutionised the traditional working environment. But the revolution itself is not over. Advances in the speed of computer processing, developments in telecommunications infrastructure, the expansion of the integrated services digital network (ISDN) and electronic data exchange (EDI), as well as the rapid growth in use of personal computers, are posing further challenges to traditional working lifestyles.
Teleworking – the use of computing and telecommunications technology to enable workers to work away from the traditional office – is starting to make a significant impact on working practices in the UK. Several major institutions, including Allied Dunbar, National Westminster Bank, Prudential Corporation and Digital Equipment, already use teleworking. In addition, SW2000’s recent research suggests that as many as 43% of organisations are running pilot teleworking shemes.
At one end of the spectrum teleworking simply involves working from home. For example, all the Prudential Corporation’s claims assessors are home based, going in to the office perhaps one day a week. Other companies, such as Digital, use what is known as `hotdesking’. Under this arrangement, employees have no permanent desk but use common facilities in the office and personal computers at home. At the other end of the spectrum are telecottages or telecentres, local centres providing PCs, printer, fax, phone and other services to individuals and organisations.
Noel Hodson, director of SW2000, a consultancy specialising in teleworking, says the concept is already changing working lifestyles. There are currently 1.2m teleworkers in the UK and 6m in the US – approximately 4% to 4.5% of the workforce in each country. The Henley Centre for Forecasting predicts that over one-sixth of the hours worked in the UK will be worked at home by the mid-1990s, suggesting that some 3.3m of the UK’s 22m workforce could be teleworking in 1995. But the trend is not expected to continue indefinitely: teleworking is unlikely to encompass more than 25% of the workforce.
“However sophisticated the technology, 75% of the workforce will still prefer to work in the office,’ says Hodson.
Nevertheless, the implications for the property industry are tremendous. Hodson estimates that, with an average 120 sq ft of office space per worker, some 120m sq ft of office space has already been vacated by people now working away from the traditional workplace.
But the impact is not one the property industry is likely to welcome wholeheartedly, warns Hodson: “With the increase in the number of teleworkers there will be a sharp fall in commercial rents and a convergence of commercial and domestic rents, with a greater proportion of city-centre space given back to housing.”
Alan Denbigh, executive director of the Telecottage Association, agrees that there will be a decline in demand for traditional city-centre offices during the next five to 10 years.
“One would expect the demand for office space to go down. Instead, people will be using the space in their own home or shared office space in semi-urban or rural areas. What there will be is demand for smaller regional office space,’ he says.
And Professor David Birchall, a member of the Henley Future Work Forum, believes that there are a growing number of companies occupying buildings of which they cannot make full use: “Many organisations are sitting on property in excess of their requirements – a situation which has come about through changing patterns of work.”
But there are opportunities for property developers. Q Love, of chartered architect and project manager Roarke Associates is involved in a telecentre project on the South Coast. He believes that there will be an increased demand for commercial property in residential areas and at suburban and rural transport nodes. “In 10 years’ time developers could be providing organisations with the entire office environment, the technology as well as the buildings,” he predicts.
In association with Brighton-based management and communications consultants, the Beacon Group, Roarke plans to set up a consortium which will develop a full franchise package of telecentres linked to a managed telecommunications infrastructure.
Barry Eliades, co-founder and senior partner of the Beacon Group, hopes that two trial sites will be up and running by next spring. Ultimately, he envisages a network of telecentres around existing communications and transport hubs.
The internal layout of each telecentre will be identical, enabling users to feel instantly familiar with it and giving a sense of corporate identity to the franchises.
Users will be able to work from any telecentre in any location without losing incoming calls, messages or other information and each telecentre will appear as a seamless transparent extension of of the user’s head office.
The telecentres will be marketed at a range of organisations from banking and insurance corporations, to advertising agencies and individual freelancers who will pay the management company for space, telecommunications and other services. A large organisation may buy the whole franchise, selling surplus space and services to other organisations and individuals within the local community, says Eliades.
But, while the bright new hardware of the latest technology is the most obvious symptom of this workplace revolution, it is the new economic reality that it represents which is driving these changes through. Company after company is discovering that there are good commercial reasons for choosing the teleworking option. In his research for British Telecom, Hodson came to similar conclusions: “The economics are inescapable for any organisation or individual,’ he says.
His research established a range of advantages in favour of teleworking. It became clear that, although modern offices are often better heated and air-conditioned and consume slightly less energy than the worker’s home, in the longer term increased teleworking will encourage multi-role use of buildings and reduce energy consumption.
Fewer resources would be used in travel to and from work: teleworkers occupy their houses for 24 hours per day rather than offices for just a third of the day. One of the Green lobby’s pantheon of pollution demons – the company car – could also become a thing of the past for many workers. Teleworkers will typically use cars 80% less than when commuting, creating a saving to the company of £3,000 a year. But, for employers, the savings could be most dramatic on occupier costs. Adapting or increasing teleworking rather than building new commercial space could save up to £8,000 in building costs per full-time teleworker, with additional benefits for the consumption of tropical timber and other resources.
And these theories actually seem to be working in practice. A major financial institution’s pilot teleworking scheme, involving 20 managers and four clerical staff, made savings of £430,562 per year and £21,528 per teleworker, including £86,400 in rent, £21,600 in rates, £9,672 in electricity, air-conditioning and heating and £2,160 in building maintenance.
Teleworkers also seem to be more productive than their office counterparts. An SW2000 survey in January 1992 revealed that organisations employing teleworkers reported an average increase in productivity of 45%. One of the main reasons for this was the reduction in days lost through illness.
Necessity seems set to become, on this issue, the mother of increased efficiency: the original impetus for the move to teleworking was the skills shortage of the late 1980s, recalls Denbigh. Organisations found that teleworking helped retain skilled staff who disliked the amount of time spent commuting or those who wanted to leave to bring up children. This is still a major consideration, he says.
But, despite the increasing attractions of teleworking, there remains considerable resistance to it, both from employers and their staff. Teleworking threatens the status quo and the traditional culture of an organisation. Employers may feel a loss of control over the workforce if it is not visible. The traditional, hierarchical structures of an organisation will be challenged. And many managers are still unfamiliar with and threatened by such advances in new technology.
Staff might experience a feeling of remoteness and isolation, although Hodson points out that staff are just as likely to be frightened of their colleagues and fear office politics. Some may perceive a loss of colleagues’ expertise, reduced promotion opportunities, poor office accommodation and reduced equipment facilities.
Nevertheless, progress has been made – if nothing else there is no lack of widely available technology. The chief problem now, says Hodson, is technophobia. But the solution is already in our midst: “This will be solved as the Nintendo generation start work and bring with them computer and keyboard skills that the older generation did not have,” he predicts.
