Just Under Two Thirds Planning To Do So Within The Year
UK businesses are getting to grips with the fall out following the pandemic and are now reassessing their office property needs, according to a new YouGov survey commissioned by Irwin Mitchell.
The survey of over 500 office property decision makers shows that nearly half (46%) of large businesses and (39%) of medium sized companies plan to move their office space- whether by upsizing, downsizing or relocating.
The survey shows that one in five large businesses plan to increase their existing office space, with the same proportion looking to reduce space and 5% to relocate. In addition, 11% are looking to reconfigure their existing space. While 37% plan to stay the same.
Those companies looking to make changes but are putting off doing so for more than 12 months cite existing lease terms as the main constraint. This is followed by financial or operational restraints in their business and uncertainty following the pandemic.
Overall financial motives are driving those changing their space requirements, with one third of large businesses citing a desire to save on occupier costs. And over a third (35%) also say they are responding to the changing ways their employees work following the pandemic and are looking at providing greater flexibility in how or where their employees work, as well as means to attract and retain staff.
Looking across all businesses surveyed as a whole, the number looking to change their office space drops down to 29%, with 56% of businesses overall planning to keep their existing space and another 11% planning to reorganise their current offices. The difference in attitude is most acute in smaller and microbusinesses where only 21% of such businesses are looking to alter their office space in some way – probably as a sign of financial caution following the pandemic.
Expert Opinion“This report reveals a fascinating insight into how businesses are viewing their office requirements as we move out of the pandemic. Spending money cautiously appears key to all, but there also appears to be a divergence of attitudes among companies according to size. Larger companies appear more able to progress change to their space to reflect current or projected needs, accommodate new methods of hybrid working, to nurture and retain staff and to follow the ESG agenda. Smaller companies appear to be pursuing a more cautious strategy and sitting tight amid the economic uncertainty.
“What is good to see however is a vote for the office and the realisation that for all its many advantages working from home full time is not the ideal for all. We are social animals. The office gives us a place to collaborate, inspire, train and mentor our staff. The office is certainly not dead- it’s just evolving into a more exciting place to work.”
Adrian Barlow - Partner
The survey also revealed:
- Asked to name the two top drivers for having an office , 40% of all businesses (and 54% of large businesses) said they see the office as an important space for collaboration and 40% of businesses said they feel their staff work better in an office.
- 37% of larger companies also see the office an important place to nurture employees in a way that embodies its organisational culture. 61% of large businesses and 56% of medium businesses said having the office as a place to nurture and mentor staff was important.
- In terms of location, cities remain popular with 50% of businesses saying they’d prefer to be either in a city/town centre or on the edge of the city. This was particularly high with large businesses where 68% gave a vote to being in or around the city.
- Nearly a quarter (24%) of businesses planning to change their property requirements said they would be looking at flexible space. This rose to 35% among the large corporates.
- 43% of all businesses, rising to 62% of large businesses cited recruiting and retaining staff as one of the biggest threats their business. Larger businesses revealed that their employees want and expect to work in modern, quality space (48%), with great WIFI and technology (44%), have agile/flexible working (43%) and be in an environmentally friendly/healthy building (37%). Good shops and leisure conveniences nearby were not as big a vote winner as might be expected- only 8 % of large businesses said this was important to their staff , perhaps reflecting the move to a more hybrid way of working with employees now shopping and gyming nearer to home.
- 15% of respondents from large businesses are willing to pay higher rent for greener office space with an additional 29% saying they would pay more if there was some financial benefit as a result, such as a reduction in service charges or energy bills. By contrast 51% of small businesses said they would not be willing to pay more rent to follow the green agenda. It looks like currently green decisions are still being driven by financial considerations with only the larger companies able to take the long-term view and invest accordingly.
- Asked for their top three choices, 37% of large businesses said an environmentally friendly/ healthy office was important to staff who want fresh air and natural light. Fresh air/good ventilation was mentioned by (76%) of those surveyed, Natural light (76%), Space between desks (37%) and Personal space individuals can control (31%). Only (2%) cited having a gym as important. The choice of these factors again reflecting a reassessment of what is important in the working environment post-pandemic.
- 68% of all businesses say they’re not willing to invest in proptech. However, support for proptech increased significantly across larger businesses with 28% of large businesses and 23% of medium sized businesses saying they would use it to support their ESG agenda. This may be in the form of energy regulation for their offices, or online document systems to reduce their paper output or maybe to support employee wellbeing,
- 75% of large employers said compliance with the Government’s Disability Strategy was either important or very important when deciding on office space. This fell to 61% for medium sized companies and 39% for smaller and micro businesses. 13% of respondents in microbusinesses said they did not know about the Strategy at all.
All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 503 senior decision makers who have a responsibility for office occupancy decisions, 'Facilities/ premises/ health & safety' in private sector businesses (excluding sole traders). Fieldwork was undertaken between 25th January - 9th February 2022. The survey was carried out online.
Business size definitions:
Across all business, N=145 are planning to change property requirements
Large businesses (250 + employees ) N=87
Medium business (50 to 249 employees) N=87
Small businesses (10 to 49 employees) N=143
Micro businesses (less than 10 employees) N=186