One of the lasting effects of the Covid-19 crisis and enforced home-working may be a change in the way that companies use office space. For all the discussion about flexible working in recent years, fewer than 5% of employees in the US and UK have regularly worked from home – until the pandemic struck.
The FT’s Sifted newsletter this week quoted Antti Tuomela, CEO of TRACTR, a Finnish startup which provides the tools to help property owners change the way they manage their office space: “The idea of having a big head office in the middle of a city that everyone travels to — and which sits half empty most of the time — will disappear. There is growing pressure to use space differently and more effectively. People are looking for places to work closer to home.”
More co-working office space
The lockdown requirement for a majority of office employees to work at home may be expected to become a more permanent arrangement for some, perhaps especially in the creative industries where some smaller companies have long operated remotely. In the future, many more office buildings could become a co-working spaces for different companies and teams. That might be a popular option also for employees who have discovered a new work-life balance during the pandemic.
A survey by the Canada-based “people analytics” company Visier reports that 68% of UK employees said they were “more productive or equally productive” working from home and that 28% expected their employers to continue to allow flexible working afterwards.
Some 75% of home working employees believe their manager trusts them to be productive from home, although 31% said their employers had enforced new processes to check on people’s output. And almost half of employees expect a return to limited flexible working policies once the lockdown ends. That would be disappointing.
Exploiting ‘trust economics’
The issue of “trust” in home working strikes a chord with James Tye, CEO of Dennis (publisher of The Week), who believes his people in London and New York are working more productively – and more happily – at home. His management team has been formally reviewing the arrangements so that the learnings are not lost when lockdown ends.
Tye believes that a high level of remote working can bring the benefits of ‘trust economics’: “My experience is a business built on trust will do very well when many of the obsolete controls are universally, clearly and forcibly removed. The more we trust and empower people, the better results we will get. It’s really humbling for me to watch how teams and individuals at Dennis have stepped up in these challenging times. Full remote working has been a catalyst here.”
The CEO, whose company spends some £3m on property (almost 2% of total costs), warms to his theme: “As business leaders, we just need to set the perimeter and purpose, provide good data and then just trust our teams to get on with it. They will greatly appreciate that trust which will translate into better performance for all. As a result, you will spend less time on questioning and on (often misleading) control and more on adapting and innovating your business for the future. The business and its employees benefit in equal measure. It is a virtuous cycle of trust economics.”
He also, incidentally, believes that his management meetings conducted via Zoom et al are creating more authentic relationships among people who see their colleagues untidily juggling the pressures of home, family and business. It’s real life.
Tye’s views are a reminder that “distributed” working has more benefits than simply reducing property costs for companies and travel costs (and hassle) for employees, especially in high-cost London.
Social distancing ‘forever’
It may not actually be a choice. Continued social distancing rules (even after lockdown restrictions are eased) may mean that existing offices will be able to accommodate fewer people.
Companies that have grown used to remote working may increasingly opt not to have an office at all, simply renting facilities when needed. Those with expensive, city-centre offices might seek to hire-out their space. Complementary companies in an industry might share offices.
UK media executives will be watching to see how the country’s largest magazine publisher Future Plc (spending some 2.5% of its costs on office space) addresses the issue with its acquisition of TI Media (spending about the same).
A fundamental change in Future’s approach to office working could deliver not only much-needed cost savings but also a new kind of magazine-media company benefitting from Trust Economics. A real win-win for employers and employees.
