Broker briefing: What will hybrid working mean for your clients this year and beyond?

Broker briefing: What will hybrid working mean for your clients this year and beyond?

The term ‘hybrid working’ – the concept of a workforce mixing time in the office with remote-working from home or a local office nearer to where they live – has become a hot topic in recent months, as companies move from the traditional centralised office, and a period of predominantly home working, to something in between. But what will businesses be looking for in this new world of hybrid work?

Is hybrid working here to stay?

Yes. All the evidence suggests that hybrid and flexible working are very much here to stay, with 55% of people in the US wanting to see this kind of working model become the new normal, while numbers in the UK have risen from 18 to 37%. Globally, a JLL survey of 2,000 office workers in 10 countries showed that a majority want to work remotely for two days a week on average – double the number from before the pandemic.

How will it affect my client’s business and office space?

As the hybrid model gains popularity, clients are likely to want to move away from having one fixed, long-term office location and towards leasing smaller, more convenient office spaces closer to where their workers live. In an August 2020 survey, EY found that 74% of employers were planning moderate to extensive changes in real estate. This is something IWG is already seeing evidence of: research published this month shows that there has been a 32% rise in demand for suburban office space compared to 2020, while enquiries for city centre locations have fallen by 10%. IWG has also seen a spike in enquiries about rural locations, especially around and outside of the M25 - up by some 20%.

Which companies are doing it?

Some of the biggest firms on the planet are already embracing this way of working. UK-based bank Standard Chartered last month signed a deal that will give 95,000 of its staff access to 3,500 global IWG offices; Japanese telecommunications brand NTT has also joined the hybrid revolution by signing a deal that gives 300,000 of its employees access to 3,500 IWG workspaces.Virgin Media and Deutsche Bank are both looking at rolling out this type of working, as is Google. In Japan, tech giant Fujitsu has switched to a ‘borderless office’ model, halving its real estate footprint and giving employees the option to work from home or from workspaces outside of the major cities.

How should we approach office space with the hybrid model in mind?

When thinking about hybrid working, the big question is: what do we need from the office? What can an office provide that staff cannot get at home? This could mean factoring in varied-use areas such as meeting rooms, breakout areas for group discussions and hosting clients, and collaborative workspaces. Some of your clients’ employees will need the space and set-up to collaborate and create; others may simply need the proper technical set-up, backed up by strong WiFi and professional IT support.

Once all this is taken into consideration, your clients’ desired office could look strikingly different. It’s unlikely to resemble the past: rows of people from every department – accounts, HR, sales – all uniformly sitting at desks, even though they may not need to be there.

Is a hybrid-friendly office more expensive?

Not necessarily – in fact, using a hybrid model can save companies money over time in a number of ways. One of the most obvious benefits is that companies only have to lease the amount of space they need, when they need it. It makes sense to move to this ad hoc approach to property, rather than retaining one large, all-encompassing HQ – often in an expensive business district of a major city – on a long-term lease. Taking advantage of flexible, short-term and membership-based arrangements like IWG’s also reduces costs for big companies rethinking their real estate footprint.

There are also carbon-reducing wins for those making the change: Regus’s report on the Flexible Economy found that the average flexible working centre could help generate carbon emission savings of 118 metric tonnes annually between now and 2029. In the UK, transport is the most polluting sector, so shortening or eliminating a workforce’s commute is a priority for many.

What will the long-term effect of hybrid working be on businesses?

Hybrid has the potential to revolutionise how organisations work. In a survey of UK CEOs by PwC, 86% felt the shift towards remote collaboration would continue, with 68% saying there would be a transition towards lower-density workplaces, with fewer people working together in person.

The potential consequences of this upheaval are profound. Not only could it give companies access to a global workforce, but it could lead to happier and more productive employees, too. In a Microsoft report of UK workers published in February, 56% of people surveyed said they felt happier working from home; meanwhile a Flexjobs survey found that 66% of workers felt they were more productive working remotely, while 32% felt that productivity levels were the same.

How does flexspace fit into this new landscape?

This is where flexspace steps, forming the local or satellite offices companies are using as a third option for staff who do not need to work from headquarters, but who require more sophisticated facilities than they can access at home. There’s already huge demand for flexspace as a place to host client meetings, or provide space for staff to work centrally as and when they need to, instead of retaining one permanent or long-lease workplace which may go unused.

The shift to hybrid – and the use of flexspace to make it happen seamlessly – is already well underway, but IWG’s CEO Mark Dixon predicts that this style of working will be “the norm” for businesses within the next two to three years. “It’s what people want, and it’s what companies need.”

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