Is remote working killing the British ‘office economy’?

The sudden shift to remote working may herald the end of the office as we know it and have a big impact on the socio-economic fabric of British major city centres. The geography of work is changing and we’re faced with the prospect of a future in which new ways of agile working must necessarily integrate and co-exist alongside traditional organisational structures.

Work from home: a new way of working is underway

The entire world is grappling with the Covid emergency again and the widespread adoption of remote working is bringing structural changes to the traditional geography and economy of labour.

Homeworking in the UK has rocketed since the start of the pandemic – rising from 6% of employees before it began, to 43% in April 2020.

Nearly half of the United Kingdom’s 30 million employees worked from home during the first lockdownaccording to the country’s statistics body, with an additional 9 million placed on the country’s furlough scheme.

Since then, only a small percentage of workers has gradually returned to the office while a large percentage of work has continued to be performed remotely.

After the summer months, the UK and the whole world is now facing the second wave of the pandemic. Once again, remote working is proving a crucial tool for containing the virus and a full return to the office still appears a far-off prospect.

Around a third of British employees under 60 are already planning to work from home more when things return to normal, according to a study by London’s UCL. Academics at Cardiff and Southampton research facilities found that some nine out of ten workers who have logged on from home during the pandemic want to continue to do so – even when social distancing is no longer a requirement.

In the meantime, major tech companies like Twitter or Facebook say they are open to their staff working from home remotely and London-based asset management firm Schroders has decided to allow its employees to work from home forever.

According to Les Back, professor of sociology at Goldsmiths, University of London, “We are at a tipping point. There’s a reorientation, a recalibration of the relationship between place and time and social life that we’re on the cusp of. We may see profound changes. Some things may not come back.

City centres becoming ghost towns

Coronavirus lockdowns accelerated the shift to flexible working in a way that could have profound implications on UK towns and cities if we consider that almost a quarter of all office space in England and Wales is in central London alone.

Business leaders were the first to warn of the damage being done to local business and city centres as people stay away from offices. The Confederation of British Industry (CBI) recently declared that, due to the shift to remote working, city centres are at risk of becoming “ghost towns”.

“The UK’s offices are vital drivers of our economy,” says director-general of CBI Charlotte Fairbairn. “They support thousands of local firms, from dry cleaners to sandwich bars. They help train and develop young people. And they foster better work and productivity for many kinds of business. The costs of office closure are becoming clearer by the day. Some of our busiest city centres resemble ghost towns, missing the usual bustle of passing trade. This comes at a high price for local businesses, jobs and communities.”

While remote working has kept many companies going through the pandemic and has also highlighted several benefits in terms of work-life balance and the environment, it could also have dramatic consequences on other parts of the economy.

“The risk is that people don’t return to offices and tourism doesn’t come back to the city centres that need it, like Edinburgh, Manchester, Birmingham and London”, said Kyle Monk, the British Retail Consortium’s director of insights.

Is remote working killing the office economy?

From public transport to Starbucks, from dry cleaners to independent shops, a massive part of the UK economy hinges on white-collar workers returning to the office, and remote working is literally “killing” this kind of office economy.

In normal times, Pret a Manger would sell 80 million cups of coffee a year in the UK, but July 2020 saw the sandwich chain close 30 of its branches and make 1,000 members of staff redundant in the face of a dramatically reduced footfall. The impact on smaller businesses is likely to be even more pronounced.

The Mayor of London himself took a firm stand on the matter, admitting that working from home is a big problem for the British capital and for all related businesses, which are struggling.

As reported by the Daily Mail, during the summer months shops in central London had only half their normal customers and won’t survive unless office workers return. The same goes for Birmingham, where the Tory mayor of the West Midlands, Andy Street, said the public transport system was carrying just 20 per cent of pre-Covid passenger numbers.

And the situation is about to get worse with the second lockdown.

Getting the balance right

The pandemic has unleashed a new era of homeworking that many employees simply don’t want to (and can’t, for now) give up. This is set to become a major problem for the socio-economic stability of city centres and the survival of local businesses related to the “office economy”.

Nevertheless, it’s looking increasingly unlikely that spending five days a week in the office will ever be the norm in the United Kingdom again. “It’s time for a paradigm shift in the way that people work,” said Taylor at the Institute of Employment Rights.

One thing that seems clear is that the geography of work is changing, along with the society and economy of our cities. We’re facing the prospect of a future in which new ways of agile working must necessarily integrate and co-exist alongside traditional organisational structures.

The challenge is on.

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