It would be easy to assume that the shift we’re seeing in the way people work, away from a shared physical environment to wherever is most convenient and productive, has been driven entirely by the Covid-19 pandemic.
But that assumption would be wrong. The pandemic has certainly had a dramatic and permanent effect, but it’s merely accelerated a trend that’s been underway for several years, as organisations progressively move to a ‘hybrid’ way of working: at home, a local office and occasionally at corporate HQ.
The real catalyst for this shift is the digital revolution, which started in the 1970s with the launch of the first personal computers. Today, digital technology puts into every white-collar worker’s hands all the tools they need to do their job. The shared workplace only ever existed because it contained the materials and equipment workers needed but didn’t have at home: typewriters, computers, photocopiers and filing cabinets to store countless kilometres of paper.
Herding people to the office is looking increasingly obsolete, expensive and inconvenient. The office is no longer a defined physical place, but rather it has become digital. In some cases, data saved in the cloud isn’t even in the same country as the staff accessing it. So why should workers go to the effort and expense of dragging themselves into work to spend the day working on a device that they have brought with them, and will return home with at the end of the day?
Research, including studies from the Office for National Statistics and Princetown University, New Jersey, shows that commuting is one of the least enjoyable activities that people have to do on a regular basis.
And why should companies go to the expense of providing prestige office accommodation in city centres, when their people have been proven in recent months to be just as effective and productive elsewhere – primarily at home, but also in offices ‘around the corner’?
This is not just a rhetorical question. Being a home-worker, or a digital nomad, doesn’t suit everybody all the time. While surveys regularly find that remote work is one of the most sought-after perks among employees, a study by the London School of Economics has shown that many of the positive effects of home-working can wane over time. Ultimately, it suggested, home-workers can even come to resent their employers and feel less loyalty towards them.
This is because people naturally come to miss the buzz of human interaction, the creative energy and shared spirit of inspiration and innovation that comes from bouncing ideas around, face-to-face, with other people. This point has recently been powerfully highlighted by Andy Haldane, chief economist at the Bank of England.
These are some of the reasons why the hybrid ‘hub-and-spoke’ model of working has continued to emerge as the preferred way ahead for many businesses, with a significant boost to uptake during the pandemic.
As its name suggests, this involves more than one solution working in tandem.
First, people can work primarily at home, enabled from the centre by the technology they need to do their jobs and supported by regular communication, guidance and virtual meetings.
Second, when they feel the walls of home closing in, or need to be part of a physical meeting, they can travel a short distance to a local office or business centre close to where they live so they can interact with others. For several years, we have seen companies across the world begin to shift their operations to the suburbs and the towns where their employees actually live, helping to rebalance the economy by providing more opportunities for local communities and service businesses. As a result, during the past two years in the UK alone, IWG has opened almost all its new centres in non-city centre environments; today, we are seeing enquiries and demand for suburban locations across our brands, including Regus and Spaces, increase exponentially around the world.
This is delivering spectacular benefits for employees and employers alike. Team members gain better mental health and reduced costs through not having to travel into city centres, along with greater career opportunities closer to home.
And it gives companies the financial flexibility to invest in their staff and in growing the business, instead of the buildings from which they operate. In our experience, businesses that opt for a fully equipped workspace, with everything from furniture to super-fast Wi-Fi provided, often see an immediate halving of their property costs, releasing capital to invest in generating stakeholder value.
Having a base in local communities where people actually live also enables them to recruit better people, attracted by flexible working.
These are some of the reasons why, at IWG, we are aiming to expand our network, mostly by franchise, to provide a flexible workspace in every village, town and city.
This is not to say that there’s no role for the prestigious head office, whether or not this is in a city centre. This is still important in terms of corporate identity, learning and cohesion. It provides somewhere for people to congregate when needed, giving them a focus for the emotional, almost ‘tribal’, link between an employer and its workforce. This can be a priceless cultural asset for a business, enabling people to imbibe the shared company spirit that sets them apart from other organisations.
There is one other very important reason for which the hybrid property model has been gaining so much support in recent years, and that is to do with the ESG (environment, social and governance) agenda. Companies of all sizes see addressing the need for their people to commute to work as the single greatest contribution they can make to reducing their carbon footprint. They understand that by bringing work into the home, and into the heart of communities, they will immediately and significantly reduce the weight of traffic on roads and in cities across the world.
The trends I have described here are irreversible and accelerating fast. I believe that over the next three to five years, we will see more and more companies make the property choices that so many of our clients have made during the last few years and 2020 in particular. Technology will continue to clear the path to change.
The future of work is already with us. And it’s only going to improve.
Mark Dixon is the founder and CEO of real estate group IWG. IWG has announced investment projects worth $2.1bn since 2003, according to greenfield investment monitor fDi Markets.
This article first appeared in the December/January print edition of fDi Intelligence. View a digital edition of the magazine here.