Almost half of businesses plan to cut down on office space in the coming years because of changes to the world of work sparked by the coronavirus crisis, new research suggests.
With more employees working from home, companies will “remodel” their estates, said risk management and insurance brokerage firm Gallagher.
Its survey of 1,000 business leaders indicated that the flexibility brought about by working from home is set to bring permanent changes to the workplace.
Nearly half of respondents said they will reduce office space by the end of 2025, while a further one in seven have already downsized since the start of the pandemic.
The research estimated that around 18 million square feet of office space will become redundant in the next five years – 18% of all current square footage in use – having a “profound impact” on the way cities look.
The change is set to save businesses with office space an estimated £45,430 a year in rent, the report added.
The five-day office working week is set to become a thing of the past, it predicted.
Jon Phillips, of Gallagher UK Retail, said “The restrictions on office-based working due to Covid-19 have made businesses rethink the space they need.
“The majority of businesses interviewed planned to keep some kind of space, but the role of the office is changing, with time in the workspace mainly spent collaborating or attending meetings.
“Clearly many businesses will continue to need space for storage of equipment and the housing of IT. However, we are seeing a long-term sea change in terms of employee attendance five days a week.”
Mark Dixon, chief executive of the International Workplace Group, commented: “We are seeing firms taking steps towards a hybrid working model – at home, a local office and occasionally at corporate HQ.
“While the pandemic has certainly had a dramatic effect, it’s merely accelerated a trend that’s been under way for several years.
“The past 12 months have shown that businesses can largely operate effectively remotely.”
