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Chancellor Warns Businesses to Keep Offices – But Remote Working Is Here to Stay

Gary Green
Gary Green
March 29, 2021

Despite the UK's 'work from home' guidance likely to come to an end in late June, it seems the horse has now bolted for reluctant employers.

It's fair to say there has been a growing demand for remote working over the past decade. With VPNs, full-fibre internet and tools such as Zoom & Slack becoming common-place, the technology is there to facilitate the shift.

You could make an argument that the technology has been there for many years, with the only stumbling block being the lack of an incentive or catalyst for change. But as the COVID-19 pandemic spread across the world in 2020, remote working has become a critical component for most businesses.

The Chancellor's Thinly-Veiled Warning to Employers

On Friday, Chancellor Rishi Sunak warned employers not to close their offices and instead look to bring employees back to the 'old normal' of "meetings that happen by chance" and "people riffing off each other."

The Chancellor indicated that staff might "vote with their feet" and decide to work for competitors who offered a desk and allowed full-time office-based work.

Sunak's warning came as many UK firms across the past few weeks announced office-based staff would be free to adopt a remote-working approach on at least some days of the week. This is undoubtedly troubling news for commercial real estate & city offices' investors who have already started to see declining demand in their properties.

Over 75 per cent of medium-sized firms are cutting back on office space and letting their spare offices, per a survey of 405 executives. Meanwhile, office construction has fallen from 4.32m sq ft to 3.61m sq ft year-on-year, despite companies continuing to grow and vacancies rising. Therefore, it's no surprise the Chancellor is urging businesses to stick with brick and mortar and get employees back into offices to avoid falling investments in the UK real estate market.

However, the evidence overwhelmingly suggests that if staff were to "vote with their feet" - as the Chancellor says - they would walk out on employers who don't provide the option to work from home where possible, rather than employers who insist on office-based work.

Remote Working – The Tide Has Shifted

The tide has undoubtedly shifted in terms of employees' attitudes to working from home. In a survey of its 13,000 strong non-branch based workers, Nationwide concluded:

- 57% of staff wanted to work from home full-time for the foreseeable future;
36% of staff preferred a mix of home and office-based work (hybrid-working); and
- Just 7% of staff wanted to work solely in the office for five days a week.

Following this survey, the UK's largest building society announced its entire non-branch-based staff will be allowed to work from "anywhere" after the pandemic. They cited giving their workforce a better work-life balance, insisting they shouldn't "be compelled to go [into the office] every day".

Joe Garner, chief executive of Nationwide, said: "The last year has taught many of us that 'how' we do our jobs is much more important than 'where' we do them from. We are putting our employees in control of where they work from, inviting them to 'locate for their day' depending on what they need to achieve."

Nationwide is just one of several other major firms to have conducted staff surveys to determine their workforce's preferences. UK office staff at PwC, Lloyds, Barclays, BT, Aon, and Virgin Media all resoundingly preferred a hybrid-approach rather than a complete return to the office.

Last week, newspaper group Reach PLC announced over 75 per cent of its employees would become entirely or mainly home-based even after restrictions are eased, while BP has asked all staff to permanently work from home for at least two days a week.

Additionally, a poll conducted by the Chartered Management Institute of more than 1,000 managers in the UK found that only a fifth of bosses want their employees to return to the workplace for a full five days a week. Additionally, of the 405 executives surveyed, 80 per cent said they would let some staff work from home full time.

Meanwhile, various studies in the past year have concluded remote working has generally meant a more productive workforce for many firms.

This combination of employees' desire to work from home and the possible upswing in productivity means despite the Chancellor's warning to businesses, working from home is here to stay for the long-term.

However, this doesn't mean the end of office-based working. The majority of firms will likely adopt a hybrid model for their staff, giving employees the choice to work from home where possible whilst coming into the office for a couple of days a week for meetings and other tasks that require deeper collaboration.

Reluctance to Change?

While it's clear that several businesses will embrace the new post-pandemic normal, there will also be some that are eager to return to the traditional working structure of full-time office-based work.

However, the reluctance to adopt hybrid-working could see businesses miss out on talent to competitors, given a large share of UK workers now view the option of at least some remote-working as a fundamental requirement for future employers.

Some businesses may require a mindset shift towards believing creativity and progression can flourish when people aren't physically located in the room; meanwhile, others may not have yet figured out which practices work best to increase remote efficiency.

However, it's clear that times are changing, and businesses need to adapt. Instead of a focus on what is lost by being away from the office, there should be a pivot to what is gained by working from home. Less time commuting, more time with family, higher quality work, more time to exercise, and lead healthy lifestyles are just some of the many benefits UK workers have cited.

With all this said, working from home may not be possible, feasible or preferable for everyone. Some may simply prefer the office, while others may find it hard to perform their job functions at home due to lack of technology, living situations or personalities.

Therefore, while working from home is undoubtedly favoured amongst the UK workforce, it's unlikely a fully remote structure will be adopted by most companies (although there will be some). Instead, a hybrid-approach could provide a benefit to both employers and employees.
If you have any questions about the issues raised in this article, we at Key Business Consultants can help. Get in touch with us today or call us directly on 02037 282 848.

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