Most UK Businesses Actively Shrinking Office Space Post-Pandemic

A new study has found that the majority of UK businesses are reducing their office space post-pandemic with the rise of hybrid working.

Research by insurance broking and risk management firm Gallagher recorded that 63 percent are now changing office space due to shifts in ways of working. That figure is comprised of over a fifth of businesses planning on moving to smaller offices (21 percent), over one third are considering moving to shared office space, and seven percent of businesses have already changed office space.

Neil Hodgson, Managing Director of Risk Management at Gallagher, commented:

Following the pandemic, there has clearly been a shift in the way that people work and businesses are taking a more flexible approach to how their employees split their time working from home and in an office.”

The scale of the post-pandemic shift in working is reflected in over two-thirds of UK businesses having introduced hybrid working due to employee demand for greater working flexibility (69 percent).

The success of hybrid working is captured in bosses’ responses to Gallagher’s study. Three-fifths have said they wished they to a hybrid model pre-pandemic because it’s been such a success, with three-quarters saying employees have improved their efficiency. Notably, most models are hybrid rather than remote, with four-fifths of business leaders enforcing a mandate for employees to spend some time on-premises.

“If businesses are looking to reduce office space, they should ensure the assets that employees are using in their home are covered away from the workplace,” Hodgson advised. “Similarly, employers should take into account the health and safety implications if their employees are working from home regularly.”

Gallagher maintains that businesses introducing hybrid working and minimising office space are likely to see a positive impact on costs because of reduced outgoings on rent, energy and business insurance.

Gallagher’s findings underlined that this is a period of transition, however. Almost two-thirds of bosses stated they initially believed they had no choice in adopting hybrid working to retain staff. 58 percent of leaders said they still feel obligated to check that employees are working when they are not in the office.

The State of Play of Hybrid Working and Office Space in the UC and Collaboration Industry

Many UC and collaboration vendors have innovative approaches to hybrid working and some are beginning to change their office spaces — perhaps inevitably, given their technology powered the hybrid working revolution in the first place.

Zoom opened a new “engagement hub” in London last month, for example. The new space is designed to move away from traditional offices to experience and collaboration-focused working hubs to support employee demand for hybrid working practices. The space caters to the unconventional and individualised work experiences that have emerged as hybrid working has become the new normal for most businesses.

The new building is a multi-purpose hub with built-in Zoom technology, encompassing 75 work points which vary in design and structure to support a diverse range of employee needs and preferences. There are library-style benches, touchdown spaces, agile tables for collaboration, and conventional desks. Workers can book these facilities through Zoom’s workspace reservation tool. This all-in-one solution allows its employees to plan their workday in the office.

The hub opened at the same time that Zoom introduced a mandate for its staff who live “within a commutable distance” of the office, which Zoom specifies as within 50 miles, to come on-site two days a week.

Zoom’s move to a hybrid model resembles the policies of many other tech giants. However, it differs from most other businesses in the in-office mandate is two days a week rather than the more common three.

Google’s policy, for example, which was instituted in April 2022, is three days a week. Apple also work three days a week in the office, a mandate which started in September 2022.

Microsoft currently adopts a hybrid working model with workers expected to be on-premises for at least 50 percent of their workweek unless they have special permission.

Amazon’s return-to-office policy is also three days a week, which was announced in February and established in May. The announcement of that policy prompted hundreds of Amazon workers in Seattle to protest outside the business’s headquarters.

In July, that policy expanded, with Amazon asking some corporate employees to relocate to different cities. Additionally, Business Insider reported that leaked Amazon messages implied that if workers refused to relocate to their new teams’ “hubs”, Amazon would grant them 60 days to find a new team in their current city or force them into “voluntary resignation”.

In August, Amazon CEO Andy Jassy allegedly told remote employees who didn’t want to comply with Amazon’s return-to-office policy that it’s “not going to work out for you”.

Insider reported that Jassy’s comments were made during a company call earlier that month, and that he told employees who didn’t want to abide by the in-office three-days-a-week mandate that they could leave. He also explained the reasoning for the policy’s introduction as a “judgment call”.



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