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Half of UK firms open offices outside city centres, study claims | Working from home

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More than half of businesses have opened offices or working spaces outside city centres, in response to the shift towards hybrid working, according to new research.

Flexible workspace provider IWG, which operates about 300 offices under brands including Regus and Spaces, said that 82% of firms have changed their office space needs to cater for more flexible working.

The survey of 500 businesses found that 54% now have office or co-working space outside city centres, while 38% now have secondary locations in commuter towns.

“It’s clear that the old ways of working, with a daily unproductive and expensive commute, are long gone,” said Mark Dixon, chief executive of IWG.

“Businesses are realising that not only does hybrid working make sense for their bottom lines, it also benefits their workforces.”

Employers are known to face growing internal strife after strong resistance from many staff that want to work flexibly or only for a maximum of two or three days in the office.

Assessments of productivity – as measured by output per person per hour – at businesses that have moved to more flexible working have shown no clear change from the pre-pandemic era, stymying claims by some business leaders that working from home will damage the UK’s already poor record on productivity.

Dixon has questioned the need for large-scale office space for some time, saying last year:

“If you ask intelligent people to commute unnecessarily for two hours a day, to come to an office to use a laptop that they could have used down the road from their home, they are going to question that.”

The research found that 73% of businesses have cut their office space costs as a result of trimming central city needs.

In June, HSBC said it would move out of its global headquarters in Canary Wharf after more than two decades to much smaller offices in the City of London.

The bank plans to cut its worldwide office space by 40% in response to post-pandemic hybrid working arrangements and a cost-cutting drive.

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According to IWG’s research, 36% of companies say they are paying less in expenses for staff travel as a result of reconfiguring office space needs for a flexible workforce.

“It’s encouraging to see that businesses are translating their hybrid working savings into real benefits for employees,” said Dixon. “Not only does this help in the immediate term, with improved productivity and wellbeing, but it will also help them retain and recruit the best talent.”

Last year, Tesco launched a pilot scheme with IWG to open office working spaces in neighbourhood supermarkets in Twickenham, Sutton and the revamped Battersea power station.

In August, IWG reported record revenues and a doubling of profits in the first half of the year, as it predicted the pandemic “big bang” in hybrid working would become permanent.

The company said it had signed almost as many lease agreements between January and June as in the whole of last year.


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