The 2020 Covid-19 pandemic and subsequent “lockdowns” altered the lives of individuals in a variety of ways, and some of those changes stuck. Office workers swapped the office for their bedrooms, as many city-dwellers ditched the neon lights in favor of quieter suburban living where rental dollars got them slightly more square meterage and the possibility of a garden.
Whilst some businesses economized by downsizing or getting rid of their office space to meet the growing demand for flexible remote working, other businesses decided to hold out for the return to workplaces. However, new data shows that office workers are not returning to work at pre-2020 levels, and paired with interest rate hikes, some commercial landlords are finding themselves in hot water.
According to survey data collected by McKinsey, as of fall 2022, office workers were going to the office just 3.5 days per week, on average, with the majority of survey respondents (56%) having a hybrid working schedule.
Are Inner-City Business Hubs Dead?
The McKinsey study found that office attendance varies among metropolitan areas. It said : “Employees in Beijing, for example, go to the office 3.9 days per week, on average, while those in London go just 3.1 days per week.
The other metropolitan areas we studied ranked between those extremes and were mostly clustered around 3.3 to 3.6 days in the office.”
The move raises questions over the future of purpose-built business hubs such as Canary Wharf in London where attendance has remained lower than expected. Canary Wharf themselves have announced a transformation project which will turn the district into a place to live, work and play — and not just for bankers.
Perhaps the lesson to learn here is that neighborhoods should not be dominated by one type of real estate. The main reason respondents cited for preferring working from home was saving time on their commute, therefore it makes sense to build and adapt neighborhood spaces for a mixture of uses. Buildings which have residential housing, shared office space, retail and leisure space all under one roof suffered less during the pandemic, according to McKinsey research.
How Businesses Should Navigate the Remote Work Trend
The way you tackle the return to office will depend largely on the size and location of your business, as well as how prepared you are for enabling remote work. McKinsey's report found that smaller companies had higher office attendance than larger ones.
McKinsey stated that, “One potential reason is that larger companies tend to have more resources and technology to support working from home. Another is that the sense of community may be stronger at smaller companies, prompting more employees to visit the office.”
Tips for Businesses to Adapt to the Remote Work Trend
- Consider a hybrid work model. A hybrid work model can help businesses save on office space costs while also giving employees the flexibility they want. A hybrid and flexible work environment will help to attract the best talent to your business.
- Establish a company culture of trust. The survey found that an equal number or participants cited they are more productive in an office compared to at home, this suggests it depends from person to person and on the task. Focus on disseminating a culture of trust and autonomy and build in management tactics to keep employees in the loop.
- Invest in technology. Technology can help businesses stay connected with employees who are working remotely. It can also help businesses streamline their operations and improve their efficiency.
- Locate your business in a strategic location. The location of your business is more important than ever. Businesses should consider factors such as the cost of living, the quality of life, and the availability of talent when choosing a location.