Businesses seek smaller, best connected offices: report
Digital connectivity, rather than physical location, is likely to be the main driver for the workspace of the future, according to a survey of Scottish businesses for the Addleshaw Goddard Scottish Business Monitor.
More than 500 businesses were asked during quarter 1 of 2021 about their future workspace priorities. Nearly all who responded (95%) said internet and digital connectivity would be the top priority, compared to only 15% who preferred a city-centre location, or 40% who named strong public transport links as the determining factors.
More than a quarter of businesses (27%) expect to permanently reduce their office footprint, even though nearly two thirds (61%) say that homeworking has had an impact on workplace innovation and culture, and nearly half (49%) say it has had an impact on productivity.
To counter this, 42% of organisations have invested in new technology to aid productivity in the last year. Virtually the same proportion (41%) say that flexible and collaborative space will be key to their new physical place of work.
Nearly three quarters of those surveyed (73%) said the cost of space would determine future location decisions, as businesses look to strengthen their balance sheets or build capital reserves as the economy recovers.
Alison Newton, partner and co-head of real estate at Addleshaw Goddard, said: “Activity in the real estate sector is busy in terms of businesses looking at where they want to be, and the type of space they want to work in. We have also been working with a number of investors active in the Scottish market.
“Organisations, while experiencing some real challenges, also have the opportunity to reflect not just on their day-to-day working practices, but also the space they want to occupy so that productivity, staff health and wellbeing, and sustainability, are built into their businesses. While some businesses will say that they want to reduce the amount of space they occupy, it may in fact be a change to the balance and style of use of the space which is needed, rather than the extent of the footprint.
“The survey results illustrate the dilemma in that businesses say productivity has been impacted by working from home, but are not sold on a clear return to the workspace (existing or newly featured). There is a real balance to be struck in terms of engaging with staff to understand how and where they want to work, and the commercial or operational needs of the organisation. There are a number of landlords starting to work with new tenants to help provide a platform for that balance.”
The survey also found a renewed optimism among Scottish businesses that volumes of activity and employment levels will return before the end of this year. The majority of firms questioned expect to operate between 76% to 100% of normal capacity over the next six months, and a quarter expect strong or very strong growth in the coming 12 months, compared to only 8% who felt the same in the previous quarter.
The Addleshaw Goddard Scottish Business Monitor is produced in partnership with the Fraser of Allander Institute at the University of Strathclyde. Click here to access the interactive report.