In the US there is a mass move to remain working at home and not to return to the offices.
This makes offices unnecessary and expensive.
More expensive than just defaulting on the mortgages.
From the BBC reporting US analysts:
[b]With an estimated 44% of office mortgages in the country in that position, the troubles have raised widespread concerns about how banks - and the wider economy - will absorb the impact as loans start to sour.
Lenders in countries as far away as Germany and Japan are socking away hundreds of millions of dollars in anticipation of loans going bad.[/b]
According to this article in the Grauniad, the IMF are worried about it too
Selective quoting out of context does not reflect the article.
Yes, Neg-Eq, not sub prime but similar potential impact on banks. Lots of their money tied to office property which has gone from stable, high value and money generating into empty, unused and low value. The article talks about the know on impact to the businesses that support and supply the office workers, which isn't good new either. Basically a whole chunk of money and money generation has disappeared from the market with no obvious replacement. That is not good news for the banks as they own a large part of what has disappeared.
We have an office in a serviced block. I can't remember the exact numbers but the concierge was telling me they need to be at 80% occupancy to be viable. They're currently at 60% .
Doesn't seem a good prognosis from my small corner.
This is not new news. A big part of commercial property has lost its usage, and hence value, in the last four years.
I’ve asked the chief catonimist for an opinion on this and she says:
Change of use. It’s coming. Hopefully while we have a government prepared to enforce decent minimum quality levels on business properties converted to homes. The banks won’t lose out.
Office market has been on its arse since 2008. This is just the latest nail.
they'll all end up as spacious, but poorly insulated and laid out flats, with no outdoor space.
Weve failed to build houses, but we've built lots of offices!
We’re in city centre of Leeds, currently in 1,000sq ft (5 year lease, expires in May). We’re downsizing to a tiny 2 desk room in the same building - even that will only be ever at about 50% occupancy. Although the building is still quite busy, there are now more larger suites now standing empty.
and the banks look like they are going to get left holding the debt as refinance options are not renewed
Or, looking further ahead, the taxpayer will end up footing the bill while any overexposed banks are reconstituted to start preparing the ground for the next catastrophe.
^^^
im sure there will be a way to nationalise the losses.
The US fed has very good (daily) reporting on all major banks, with things like lcr and nsfr reporting the liquidity of their loans, which are adjusted by the risk of loss, and forces institutions to have appropriate coverage in place as the loans sour. None of this was in place in 2008. A couple of small players may go bust but this won't impact any of the banks that matter
Our office in Southampton has just installed a new shiny cafe (replacing the rather good coffee truck outside). It's supposedly only open to residents of the building which is interesting and slightly smacks of "please come back to the office"
I'm 2 days a week in the office and would maybe consider 3 days but beyond that not a chance.
AI will replace am awful lot of office jobs very soon anyway so what happens then?
Indeed… this* is why the govt are being such ****s about Civil Servants needing to do 3 days/week in the office.
A lot of very big companies around the world have settled on 3 days a week so can't see their offices going. The company I work for did it over a year ago and I still dislike it as I loved working from home full time. If a company is still growing it's workforce it is fine as you can employ a lot more people at 3 days a week that you could have when it was 5 days a week but if the company is not growing, or even getting smaller, then doesn't work out quite so well.
I think the message is get back to the office or all of our pensions are doomed
A valid concern, to be fair.
I'm that rare civil service freak who prefers working in the office. Had many of my colleagues - especially senior colleagues - gone back to the office 2-3 days a week when it came in back in 2022, the civil service could be focusing on delivering instead of micromanaging a load of overpaid petulent cry babies. Other views are available.
(I could do my job at home. With a bigger desk, multiple screens, better WiFi. All of which my wife needs as well. We don't have the facilities or the space, so I'd sooner go into the office.)
How many companies own their offices rather than rent these days though? The company I work for has a global HQ office building I expect they own but pretty sure all the UK offices are rented. They were looking at building one near me pre-Covid to consolidate a few local offices but that was shelved as it's no longer needed.
Maybe we start seeing office buildings converted to much-needed residential flats by property developers/owners as a result?
Personally I never really liked hybrid working, would prefer to do a full week or two either WFH or in the office, although I've been office-bound for a few months now as there's no remote access permitted (security reasons) to the environment I'm currently working in (although it helps I only live 3 miles from the office)
Maybe we start seeing office buildings converted to much-needed residential flats by property developers/owners as a result?
Exactly, though tne standard of such conversions tends to be incredibly poor.
In Bristol there seems to be continuous building of new shiny offices while the slightly older ones sit empty. They've just finished one enormous one, which already has To Let signs all over it, not a good sign. Meanwhile there are several more similar gigantic offices under construction close by. There just doesn't seem to be the demand.
offices need to become the new "offsite" remember how you used to get a hotel to get everyone away from the desk to focus on a problem?. this now needs to be the office. they need to be made it to interesting and fun places to be. im hoping the days of battery farm desks are gone
if some offices are changed into flats that is a good thing, helps solve some of the housing problem
banks will still get their money, one way or another
I'm with MCTD on this one.
The knock on effect on career development for grads and early careers employees from WFH is becoming noticeable. All the mentoring, learning from osmosis, behaviours and relationships that used to come from being in the offices and around colleagues is now pretty much vanished. I'd hate to be starting my career now, either sat in a nearly empty office or locked away in my own home.
Plus trying to do system concept generation and development over Teams is shit. 20 minutes around a whiteboard is far more productive than 5 hrs on teams.
How many companies own their offices rather than rent these days though? The company I work for has a global HQ office building I expect they own but pretty sure all the UK offices are rented
yes, but *someone* owns them, probably with borrowed money. And if the rent isn’t paid, the loans still go bad.
Maybe not the occupants’ loans, but it still affects the system.
I think the message is get back to the office or all of our pensions are doomed
Except my 'pension' benefits far more from me not paying for the 90 mile round-trip to the office 3-4 times per week, buying expensive drinks & food etc as I did pre-Covid.
Simple back-of-the-fag-packet maths puts the cost of a single day at 90 miles * 45 ppm + food/drink at +£50 per day.
IMO this is just another Industrial Revolution, but as someone above points out, it'll be classic "Nationalise Losses".
All the mentoring, learning from osmosis, behaviours and relationships that used to come from being in the offices and around colleagues is now pretty much vanished.
That's true, bur understandable considering that osmosis takes a long time to pay off, has a high proportion of time-wasting, and is a pain in the arse to deliver. So in the short term understandable why people like me would rather sit at home...
I disagree. Working remotely is a skill. I have watched my GF work from home- she goes in one day a week if needed. She has, in five years, built up a brilliant team around her. She has been promoted twice and is currently recruiting some fab early career graduates that are highly skilled and adapted to working remotely. Long live it.
Perfect opportunity to chip away at the housing crisis. I also agree that the office should be a place to go and work as a group, when needed.
A lot of old (and not so old) offices are standing empty because they do not meet the latest requirements for environmental efficiency and occupiers are increasingly not occupying them, banks are not lending against them and investors are not buying them. The state will not be buying them either.
The Economist ran a piece on this a couple of weeks ago. An important detail is that commercial property is a much smaller share of the outstanding mortgaged property market than residential; and it's generally a much more conservative and predictable part of the market. So some lenders will absolutely take a big haircut on their loan portfolios in commercial property, but it doesn't have the scale to become a systemic problem.
Plus of course banking asset levels are mandated to be much higher now than during the last recession, so there is more elasticity in the market.
Apparently...
Lots of interesting and valid comments on this thread and sorry for the slightly click-bait title. I reckon there is a fundamental shift in the way a large number of large companies are working.
The jobs that require you to sit at a desk, stare at a screen and talk on Teams calls were traditionally all performed in large offices. This was a very stable market with a stable demand that was pretty predictable and so considered a safe long term investment.
Covid forced companies to adopt WFH where possible and the majority of the office workers realise that they could [i]sit at a desk, stare at a screen and talk on Teams calls [/i] at home if they were lucky enough to have the space/quiet to do so. These people then realised there were lots of complimentary benefits such as good coffee, cheap food, no wasted commute time, money saved, being around to collect Amazon deliveries etc.
Now companies face a dilemma. Do they try to get their workforce to come back to the office, how and why?
How seems to be by company dictat - YOU MUST BE HERE 3 DAYS A WEEK! and possibly free coffee.
Why seems to mostly focus on the soft benefits of interacting with each other and mentoring new people plus the real benefit of a 30 minute discussion around a white board can be more productive than a 2 hour teams call.
As a WFH person for the last 7 years I really believe that hybrid working is the best of both worlds. Being at home to focus on getting stuff done is great but 100% at home can drive you mad and I miss the interactions with others - which are really important - Zoom/Teams etc just can't deliver that.
I'm heading to the London office on Weds for a couple of days of meetings to try to problem solve, discuss issues, meet clients, etc. etc. I understand that for some people in some roles, WFH is ideal but if you are part of a team the face-to-face working is often invaluable.
Maybe more of a USA problem. They have zoned development laws which means you can't usually have a mixed retail / office / apartment building and converting from one to the other is nearly impossible. Which means if an office isn't viable then a whole building isn't viable. Add to that their commutes are typically twice as long (partially as a result of the first point).
Whereas in the UK we just convert them into flats.
Little benefit to a multinational bank, but I don't think the arguments apply here as much as they do in the USA.
thisisnotaspoon - Banks invest globally. As per the original article "Lenders in countries as far away as Germany and Japan are socking away hundreds of millions of dollars in anticipation of loans going bad."
I found an interesting article in Forbes that listed 18 benefits of returning to the office based on interviews and suggestions from many industry experts.
1. Live Observation - Observing the way people move and carry themselves in a business ….to promote faster human connection … unprompted discussions … mentoring.
2. Mental Health Benefits - Adverse effects some experience with the isolation … in-person social interactions …a net positive in terms of mental health. [b]What about all the mental health issues that working in an office environment is proven to cause? This is not an argument FOR or AGAINST anything, it is simply that employees may face mental health issues such as stress, anxiety and loneliness[/b]
3. Mentorship For Young Professionals - Young people disproportionately benefit from hands-on mentorship and coaching. This is more easily achieved in a face-to-face context. [b]This is a duplicate of point 1[/b]
4. Impromptu Connections - The ability to network, build relationships and understand different perspectives …[b]This is a duplicate of point 1[/b]
5. Nonverbal Communication - Nonverbal communication is often lost in remote environments through video lag, sound quality … [b] Makes you wonder if the telephone will ever catch on[/b]
6. Shared Experiences - Shared experiences in the office are how we build bonds and make friends [b]This is a duplicate of point 1[/b]
7. Employer Brand Growth - In-person collaboration offers a multi-sensory, human experience that deepens employees’ connection to and perception of your employer brand. Enhance this impact with shared, immersive experiences that reinforce your vision, values and what you have to offer as an employer. [b]WTF does this actually mean?[b]
8. Collegiality - There is always collegial energy in any workspace. Some conversations aren't worth "jumping on a quick Zoom." They used to happen in hallways and lunch rooms. [b]This is a duplicate of point 1[/b]
9. Proper Equipment And Fast Technology Repairs - While hybrid work can improve work-life balance, it can also mean working without the proper equipment or employing home remedies for workstation setups. [b]Instead of spending all the money of an office, provide the employees with the required kit?[b]
10. Stronger Connections - One benefit of returning to the office is to build relationships for stronger connections. [b]This is a duplicate of point 1[/b]
11. 'Goal Contagion' - You might bump into colleagues while thinking about a problem and the chat leads to a new solution. "Goal contagion" is when you see the actions of other people and you embrace their same goals. [b]This is a duplicate of point 1[/b]
12. Organizational Culture And Identity Growth - Enhancement of organizational culture and identity is a benefit. [b]Is this a duplicate of point 7?[b]
13. Sponsorship - In-person interactions and close proximity enhance the ability to discover, forge and nurture sponsor relationships, fostering deeper connections… [b]This is a duplicate of point 1[/b]
14. Passive Learning Opportunities - The benefit of passive learning is enormous …Think about the utility of proximity for new hires, those changing roles [b]This is a duplicate of point 1[/b]
15. Work-Life Balance - Hybrid work enables the team to both build a great company and manage their lives in a respectful manner. "Returning to the office" call in the age of video conferencing and fast-developing AR solutions goes against progress. [b] Umm, this doesn’t sound like a benefit of returning to the office[/b]
16. Opportunity For Those Seeking A Promotion - For those hoping for a promotion …proximity bias can cause management to show preferential treatment [b]This is exploiting a bad thing and is also a duplicate of point 1[/b]
17. Visibility For Marginalized Groups - For marginalized groups … it’s easy to be shut out of meetings—maybe you don’t even realize the meetings are happening [b]True but this also existed in the office. It is a culture problem more than a location one[/b]
18. Togetherness - The biggest advantage is for the employees to create a feeling of togetherness [b]This is a duplicate of point 1[/b]
Just to save you reading the long posts, the 18 reasons are:
1) Observing the way people move and carry themselves in a business ….to promote faster human connection … unprompted discussions … mentoring - Basically all of the human interaction that you struggle to put a hard $ value against but we all feel is there.
2) Some tech and work space in peoples houses isn't great
3) In-person collaboration offers a multi-sensory, human experience that deepens employees’ connection to and perception of your employer brand. Enhance this impact with shared, immersive experiences that reinforce your vision, values and what you have to offer as an employer.
I don't understand point 3 so have just pasted it in complete but point 1 is valid and point 2 has merits but then the tech and location in offices is rarely perfect so it is not totally valid.
Forcing x days a week can be brainless. We're forced to if we are within 50 miles of an office, regardless of wether or not there is anyone in the office we might want to talk to. As a remote worker my team of 8 is all over the world, and I don't even talk to them. I'm rarely working with anyone on my continent let alone my country. And yet I would have been forced to waste a day's worth of my own time every week and about £150 a month to sit on my own not talking to anyone in an office rather than my house if they (fortunately) hadn't closed the office that was 45 miles away.
On top of that, the only place in the UK it is worth me going is 2hrs away and they took away my standing expense approval to go there so I don't any more.
I am supposed to turn up to the Team Meeting in the office each week. That is £70 plus 4 hours of travelling to take a 1 hour phone call between the normal calls I have with my teams in India and the US.
Molgrips - Have you tried the 'environmental' argument? "In line with our corporate standards on reducing our environmental impact ... I propose taking the 1 hour Teams call from home instead of 4 hours of unnecessary travel causing XXXkg of CO2 discharge. I am sure you understand but please tell me if you still want me in the office and what the environmental justification is, just so I don't break the corporate rules".
There's bound to be something along sooner or later of course. And recession in the States has been called for the last couple of years ... To no avail.
But currently, economic data is good in the USA. Distribution of wealth is a massive problem though.
A large number of desk jockeys will be redundant anyway once Al kicks in. Best start planning for reuse of buildings!
Perfect opportunity to chip away at the housing crisis.
Perfect opportunity for middle aged IT managers with a bit of equity in their houses. Not so good for junior employees who either still need to live close to the office and still need to come every day OR live further away, rent an additional room to work in, and be prepared for intercity commutes at the drop of a hat.
I agree with much of what you say but everything in this area is very "multi-factoral".
If you remove the need to go to the office then you remove the need to live near the office so you remove the price premium of accomodation near the office...
...and we all work out of the back of a van in the car park of your favourite Bike Park
My company has just spent millions extending and refurbishing offices in London, Manchester, Leeds and Birmingham, and yet they're empty. I'm supposed to do two days per week and rarely go in more than twice a month. Of course now according to my boss there's a 'board level discussion' going on about cancelling home working altogether. I told my boss if that happens the software development team I lead will all leave. I also told him they'd have been better off using all that money they've spent on offices to give people a pay rise to help them with commuting costs. There are some proper idiots running British industry.
In-person collaboration offers a multi-sensory, human experience that deepens employees’ connection to and perception of your employer brand. Enhance this impact with shared, immersive experiences that reinforce your vision, values and what you have to offer as an employer.
I think this means providing free coffee, snacks, cake and beer to your staff. I'll bring this up with my boss.
Solution: provide an office, and pay expenses for people to get there, but don't force people. That way, people will be more likely to come when there's a reason to because it'll be much less onerous; but those who really don't want or need to don't have to.
pay expenses for people to get there
That's ridiculous. When you start a job you know where you live and the commute to the office. If that changes then a discussion with HR will set out the new arrangement.
Expecting your company to pay for your commute is a nonsense.
Expecting your company to pay for your commute is a nonsense.
I'm not expecting it. I'm saying it would be a good way around the problem whereby people don't want to be forced to travel when there's no point. If you pay expenses, that should prevent people staying home to save money.
Regardless of what people 'signed up for' when they took the job, the world changes, people and companies should change with it.
Regardless of what people ‘signed up for’ when they took the job, the world changes, people and companies should change with it.
Exactly. When the subject came up at my place I said the world had changed and they weren't going to get the genie back in the bottle no matter how militant they became about it. For every employer like mine who spends massive amount of money on fancy offices there will be many smaller, leaner companies who have figured out remote working who will have massively lower overheads and be more competitive whilst paying higher salaries. Companies like mine won't be able to compete for staff or projects. Going back to full-time office working is no more feasible or likely than going back to working 6 days per week with no holidays or sick pay.
I'm OK with going back to the office but part of that bargain is providing facilities. It's annoying that my employer has withdrawn stationery and printers "because you didn't need them when WFH" and halved the size of the canteen so I can't get a seat at lunchtime. It's a bit of a one way street.
Crunch time will be when the next major office refurb is needed - will they spend the millions required on the existing office, pick up a newer cheaper office or just give up on the office?
Housing is the bit that gets missed out. People would be much happier to go to the office if the commute was 30 mins door to door. For london, thats only possible if you are earning millions
The offices are only half the story. Millions of jobs service commuters and offices. Trains, shops, coffee, lunch, taxis, cleaners. What happens to those jobs?
People would be much happier to go to the office if the commute was 30 mins door to door
Would they indeed. My commute is around 20 minutes and I would rather work at home so I can do other things in between working and also not have to put up with annoying people sat around me.
There are no positives with me going into office and I only do so to keep off the disciplinary list. Things have changed, people have changed, a lot of companies don't want to accept it.
All the offices in the building I ran my business from are now flats, which are worth more than the business property was before. In an economy with a residential property shortage such as London and much of the UK many will see it as an opportunity rather than a crisis.
I'll go against the concensus here and say I much prefer working in the office. I manage quite a big team and I find it far easier to do that in the office than at home. My employer has a rule of a minimum two days per week in the office which feels like a reasonable balance. I usually do four days.
That’s ridiculous.
No it's not. Employers needs to understand the cost of commuting is key for their staff. By all means mandate 5 day a week 9-5 presenteeism presentism, but expect your staff to be poached by employers who have working out the economics of all that obligatory peak time travelling.
I manage quite a big team and I find it far easier to do that in the office than at home.
Undoubtedly it's easier to manage a large team if everyone's in one place. One of my directors said he spent £350 per week commuting so if he was taking the hit everyone else should. Obviously he wasn't too happy when some of the younger staff pointed out that he could afford it on his 200k salary as opposed to the 30-40k they were on. Home-working makes it much harder to be a manager, but that's not a reason to get rid of it.
We're getting a new office after 3+ years of not having one and being 100% remote (bar a small lab for storing some equipment).
I'll probably cycle in a couple of days a week. After three years of being 100% remote I've reorganised my life around this eg I have a French lesson mid morning Tuesday and a PT session mid morning Thursday, which makes going back to an office on those days a PITA as rearranging those slots won't be possible.
3) In-person collaboration offers a multi-sensory, human experience that deepens employees’ connection to and perception of your employer brand. Enhance this impact with shared, immersive experiences that reinforce your vision, values and what you have to offer as an employer.
I don’t understand point 3 so have just pasted it in complete
Sounds like HR gibberish to me...
If you remove the need to go to the office then you remove the need to live near the office so you remove the price premium of accomodation near the office…
…and we all work out of the back of a van in the car park of your favourite Bike Park
Again - that's great if you never need to go into the office and can buy a £40k day van and buy a big place in Devon. It's not so great if you're 23 yo and can barely pay rent on the single room and would actually like a social life in a large city. This is a change (like everything else) favours the older and richer.
I’d hate to be starting my career now, either sat in a nearly empty office or locked away in my own home.
our new guys prefer to be in the office than sat at home on their own. they all hated it through covid - why would you want to continue it if there is an alternative? We all live local rather than commuting hours though.
That’s true, bur understandable considering that osmosis takes a long time to pay off, has a high proportion of time-wasting, and is a pain in the arse to deliver. So in the short term understandable why people like me would rather sit at home…
i can imagine some old guard hate teaching people stuff, and sometimes its annoying, but for teh most part i actually like it and find it rewarding when someone i trained does something decent.
it does depend on what you are doing i suppose. we are engineers so it really helps to be able to talk it through and explain stuff and wotnot. yes we can do it over teams (we did it through covid) but its not the same.
I want to buy an office soon so my business can rent it off my pension. so much cheapness appeals!
I manage a big team and I find it far easier to do that from home than in the office.
It’s amazing what you can afford when you don’t need an office that fits everyone in:
We have a small managed office for the folk that live nearby and want to get out of their houses/flats.
We provide a stipend for folk that want to use a managed office/wework and don’t live near HQ.
Decent allowance for home working kit.
Decent hardware and software for remote collaboration and constant reviewing of it.
Expenses paid when teams want to arrange to meet up for work or fun.
Regular pretty much mandatory away days for whole company F2F time. All expenses paid, and done in an extremely inclusive way.
There are some real benefits to having offices but a lot of the benefits are only real benefits when the assumption is that you 'should' be in the office or if you don't look at it from the employees side.
Imagine if everyone had always worked from home. Now explain to me why the business should take on the cost of renting / buying an office.
1) It will bring all our people into one place. How is that a benefit and to whom?
2) We will have a central location. Central locations require costly travel, buying more expensive food & drinks etc so why is this a benefit?
3) ...
Other than, it is nice to meet people and handy to bounce ideas off them face to face and occasionally you will get some random cross fertilisation of ideas I don't see any real benefits on the list of 18 I listed from Forbes on the last page.
I’m not expecting it. I’m saying it would be a good way around the problem whereby people don’t want to be forced to travel when there’s no point. If you pay expenses, that should prevent people staying home to save money.
We're moving offices this year, back of an envelope calc implies that the concessions made to people commuting by car amount to £0.4-0.8million per year, and that doesn't include the parking already included as part of the building (about 350spaces per ~900 desks).
And yet it's a seemingly impossible argument to get a drying room added to the plans to at least make cycling viable year round. It's an office of ~900 people, no one will want the smelly kit and towels on the hat stands.
And it's the same everywhere, car driving commuters already generally get massive subsidies compared to anyone on public transport or walking/cycling.
Again – that’s great if you never need to go into the office and can buy a £40k day van and buy a big place in Devon. It’s not so great if you’re 23 yo and can barely pay rent on the single room and would actually like a social life in a large city. This is a change (like everything else) favours the older and richer.
This in other words.
Commute lengths are proportional to wages for all sorts of reasons, but it's not a desirable thing to encourage.
Housing is the bit that gets missed out. People would be much happier to go to the office if the commute was 30 mins door to door. For london, thats only possible if you are earning millions
Depends on the commute though.
I've done both train (+Boris bike) commutes into Westminster via Paddington and car commutes to Staines barely into the M25. They took about the same time, but if you can get on a train it's 'productive' time, whether that's work or just enjoying a book/podcast. Car commutes are just lost time though, I hated it.
Paying for your commute is nonsense. Am I right in thinking companies did not cut peoples salaries when they worked from home so people had more money? If they want you back in the office why should they reimburse you for it now? Loads of people working in other sectors(health, service, retail etc etc) don't get their commute paid for.
Why should colleagues who commute, possibly have cheaper accommodation outside the city, get more than those in the office who live in the city, maybe pay more for their accommodation, and walk to work.
There are offices around here that were built over 10 years ago and have never been occupied.
I'm guessing this area isn't even special in any way?
Expecting your company to pay for your commute is a nonsense.
And yet many/most office-based employers pay for:
Sick pay
Annual Leave
Private medical care
Free tea and coffee
Life insurance
Pensions
Social events
Why not travel?
In the pre-covid world the onus was on workers to decide whether commuting was worth the cost, now it's the other way round. Employers need to decide if limiting themselves to employees who live locally is a disadvantage they can endure in the marketplace. If you can't recruit good staff, then your business will suffer, that's the bottom line.
paying for your commute is possibly nonsense, but if you wfh the majority of the time it'd be reasonable for the company to only pay you wages that are competitive for anywhere that job can be done (ie, anywhere in the uk), rather than the expensive area you may live in - if they want you in the office they have to pay a rate comparible with the local area. In some places there's no difference, but in a lot of the south east, paying north east wages would be a very significant drop
If they want you back in the office why should they reimburse you for it now?
Because they want to keep you, not lose you to a competitor company that effectively pays better. Mandating expensive commuting every day will increasingly be taken into account when employees are considering their pay package. Somewhere else offering slighting more money AND either less frequent commuting or pays for commuting? That's a big draw. "Sucking up" the cost of travelling peak time five days a week is no longer acceptable to many people (or simply isn't affordable anymore for some).
No it’s not. Employers needs to understand the cost of commuting is key for their staff.
Absolutely. I'd have taken a significant pay cut simply due to some distant exec's whim, for no benefit. Two of my team mates are facing 3hrs per day extra travel for no benefit because they are not co-located with anyone they work with.
There are offices around here that were built over 10 years ago and have never been occupied.
I’m guessing this area isn’t even special in any way?
Same round here, but there was a bit of a boom for a few years pre-covid where occupancy increased.
Apparently the reason is it's often cheaper to be paying the loans on a decent loan to value ratio, than it is to cut the rent, reduce the value and pay higher rate loans. Cynically I think it was just easier to get planning for office space, then convert to apartments at a later date.
Office and other commercial property rental prices aren't coming down though. My wife is trying to expand her business by taking on a small office/warehouse space and there just aren't any decent ones locally and anything even remotely suitable is vastly overpriced. Plenty of shared offices where you rent a desk but who's using this stuff?
Working from home would do my nut it - I don't want work anywhere near my home life. I can fully understand why people with long commutes love it though.
Plenty of shared offices where you rent a desk but who’s using this stuff?
Those who work from home but are bored and want some company! 🙂
Meh. Landlords/Property investors thought they would be above the risk of becoming redundant.
Just the same as any other industry lost to progress. MS teams is the steam powered loom, they are the luddites.
I like going into the office a few days a week, and at home a few days. My company has gone for this model, its working well for all involved. People are happier, people have better work life balance. Theyve off hired half the office to save the cash, so we couldnt all go in at the same time if we wanted to
Landlord continues to do the bare minuimum of maintenance on the building, as they always did.
I totally agree companies will lose colleagues if they don't offer a good package but that's all about the Ts and Cs you sign up for and a different matter.
A company has 2 people working in an office pre covid, one lives in the city and one lives in the countryside. The colleague in the city pays more rent for the pleasure but balances it by not having yo pay to commute. The colleague in the countryside pays less rent but balances it by paying more to commute. WFH now saves the second colleague money but not the first. Now you are to work in the office again and the second colleague gets their commute paid for saving money again but the colleague in the city has gained nothing. This doesn't feel right to me.
Coming back sort of to the original point, some areas are still trying to build office capacity. Leicester city council are desperate to increase the city's office capacity as their information is that businesses are moving elsewhere due to lack of good office space.
This could've linked to the earlier comment about the environmental performance of existing UK office stock.
This doesn’t feel right to me.
The solution is fairly obvious, give those who work in the office every day more money. Just like most big companies have a london weighting (worth about 10% of salary at my place), change that to an office-working weighting. That way city workers paying higher rents get more, commuters are helped with their travel costs, and those working from home can carry on doing that if they wish or go and work somewhere else which fully supports home-working.
In some places there’s no difference, but in a lot of the south east, paying north east wages would be a very significant drop
Just off-shore the jobs completely and save a fortune. Remote working can cut both ways