The future of work: what will the post-pandemic office look like?

When it comes to the future of the office, everyone has a view. And usually a strong one.

The pendulum has swung dramatically over the past year. Initially, panic over running a business from home was in the ascendancy. Soon, some were asking themselves why they had ever needed an office in the first place. This year, HSBC captured headlines by saying it will cut its office footprint by 20%, then 40%. More recently, the chief executive of WeWork weighed in, suggesting a staffer’s commitment could be judged by their enthusiasm for returning to the workplace. His own pendulum quickly swung back.

In reality there may be no right answer, no absolute truth. But still we have to plan, to prepare, to build and to right-size. How do developers, occupiers and advisers prepare for an undeniably hybrid future?

This month, EG’s Future of Real Estate podcast turns its attention to the future of work. A warning, however: the views expressed here are more nuanced than you’ll find on social media. And all the better for it.

A hybrid future?

Some sectors, such as law, are well advanced in their thinking about office versus homeworking. “It’s clearly going to be hybrid,” says Charles Russell Speechlys partner David Savage. “We are beginning to see a pretty clear picture emerging in our sector. When you ask lawyers and law firm staff what they would like, they say they’d like the potential to work three or four days a week from home and one or two days a week in the office, largely for the things they consider important around collaboration and development of talent.”

He adds: “Of course, there were always virtual law firms before the pandemic, and there will be one or two firms that are looking at issues around talent acquisition, positioning themselves as outliers to that norm. But our plan is to work with our people as they come back to the office over the course of the summer and into the autumn.

“Our summer occupation will be essentially one of encouragement to be in the office for some of the working week. But it will be an entirely voluntary process. And then come September, we’re kicking off a more formal, agile working pilot, and that will be based around teams coming together to create effectively their own agile working charter for about six months. And then we’ll take long-term decisions on how we want to occupy and use our offices in the medium to long term.”

At Charles Russell Speechlys any lingering trust issues around homeworking evaporated during the pandemic. But in answer to the big question: Savage expects the firm to reduce its office footprint, particularly in London.

Knight Frank was already trialling an agile working programme before the pandemic hit. However, for head of flexible office solutions Amanda Lim the office isn’t going away any time soon. Building personal relationships cannot be done over Zoom, she says, and nor can team bonding: “How do you train new starters to do a job when they have just sat behind a laptop and talked to people on a screen?”

It’s those water cooler moments, or that drink after work, whatever it might be. Those are the things that we all miss… I think everyone is desperate to get back into the office

James Shannon, Essensys

Agility over tradition

That’s professional services, but what about tech businesses? Surely there agility trumps tradition?

“I’ve got a very large team that has grown significantly through the pandemic,” says James Shannon, chief product and technology officer at Essensys. “There has been a lot of Zoom onboarding. Clearly, we are very well set up from a product development perspective – we have all the systems and work to support 100% remote product development. But especially the younger members of the team based in central London, who haven’t necessarily got the space around them, need to get out of their flats and into an office and socialise and be mentored.

“It’s those water cooler moments, or that drink after work, whatever it might be. Those are the things that I think we all miss. And with a strong company culture that’s very hard to maintain remotely. I think everyone is desperate to get back into the office.”

Ultimately, says Shannon, it depends: “For certain teams, there is a natural motivation to get back in and collaborate to be effective, while I think there are those parts of the business that actually relish the quiet time. It’s very much horses for courses for different parts of the business.”

Every business will have a slightly different need and slightly different approach. But generically and wearing a property owner’s hat, we’re switching from selling a product to selling a service

Alex Price, Fiera Real Estate

Selling a service

That’s the thing in a debate that has captured more, perhaps, than its fair share of social media airtime in recent months: it depends. And that’s a good thing, isn’t it – there shouldn’t be a one-size-fits-all solution. However, for developers and investors, “it depends” isn’t enough when significant capital sums depend on a definitive answer.

Alex Price, UK chief executive of Fiera Real Estate, recognises that. “We have 100 people, and our colleagues are located in three different offices. But as well as that, today we are on site building 200,000 sq ft of grade-A offices – one building in Bristol and another in Leeds. So for us, looking at the future of offices is critical both for the colleagues I work with and the customers we are trying to attract into the buildings that are coming out of the ground.

“It’s clear to me that every business will have a slightly different need and slightly different approach. But generically and wearing a property owner’s hat, we’re switching from selling a product – space in this case – to selling a service.”

That means being more service-orientated, more customer-centric. “If we can’t then we are going to struggle in a market that I think will increasingly focus on grade-A, high-quality space.”

Price acknowledges that space needs have gone down. “’Less but better’ would be the thematic that’s coming out. I think we have lost one potential customer because we didn’t have quite enough amenity space. We are asking ourselves: do we, as a property owner, know enough about offices to be a long-term owner in this sector in the way that we are not an owner of managed hotels?

“There may be offices on long leases, but the direction of travel will be towards shorter leases, and the owners of those office assets will need to be better at servicing the needs of their customers. I think every other owner is probably being asked a similar question by their customers: ‘What can you provide me to make it worthwhile for me to come back?’”

Technology is now absolutely key because if you have 10 people in a meeting then it’s probably quite likely that all 10 will never be in one room again

Amanda Lim, Knight Frank

Collaborative environment

Tech and flexibility have to be part of the answer. “How office space is being used is absolutely key,” says Lim. “Office space itself is not going to be just desks and chairs anymore. We have had a lot more requests for collaborative spaces within serviced offices – meeting rooms with videoconferencing. Technology is now absolutely key because if you have 10 people in a meeting then it’s probably quite likely that all 10 will never be in one room again. The future workspace will be very adaptable.”

Employees will have a bigger say in decisions than ever, say Shannon, including locational decisions. “The world where traditionally everyone commutes into a headquarters in the city might look very different in terms of not only coming in for partial days of the week, but actually going to different locations in different spaces for different purposes. So, it may be time to build a client relationship or have a meeting one day and maybe to collaborate with one’s team another day and maybe find some quiet space to work away from home on a third day.”

And it’s that which poses the toughest questions for developers, landlords and occupiers.

“How do you retain enough space to allow one of the main reasons for being in the office, which is collaboration, innovation and development of people?” asks Savage. “How do you maintain that, which basically is a sort of a surge model, where you want most people in at roughly the same time, versus a distributed model that gives you the better overall property dividend?

“One of the ways you do that is obviously to approach agile as not simply home versus office, but agile in the office. And you make sure that your occupation of your offices is itself very smart and very agile. There’s a clear role for technology there in terms of sensoring that environment, the seating positions, the desk positions, the other collaboration spaces, and not having people throw down their jacket on the back of a chair and sterilise that space for the entire day if they’re only sitting there for 30% of the time.

“Technology can help us with that. But it’s also a mindset.”