Could A Swap To Hybrid Working Benefit Your Business?

Chris Shaw, CEO at Utility Bidder LTD, explores the benefits of swapping to hybrid working for your business.

A key trend of hybrid working is the introduction of smaller more collaborative spaces where those employees working in the office can do so together in more social and creative environments. A survey conducted by Open Access Government showed that 29% of small business owners are planning to downsize their office as soon as they can to accommodate a hybrid workforce with 37% expecting to save on office costs giving them extra funds to spend elsewhere in the business. 

Although hybrid working has been endorsed with open arms by employees across the nation, a prevalent concern for modern businesses is whether hybrid working could benefit them long term and if there are any opportunities to save on expensive overheads such as utility costs.

Utility bidder looked into how the potential of new hybrid office spaces could impact utility cost savings for small businesses in the UK. Taking an SME that consists of 49 employees and assuming the office size is on average 100 square feet per person (based on UK standards) results in an average non-hybrid office being roughly 4900 square feet in size. Then by taking into account the average energy consumption of commercial buildings and average energy cost per square foot they calculated the potential savings if the business were to decrease its office sizes to accommodate for the shift to hybrid working.

From their calculations it showed that SMEs of 49 employees could save up to £7586 annually if office sizes were decreased by 40%, a downsize that is not uncommon when embracing a hybrid model of work. When applying the same calculations to offices across the UK, it could result in small businesses saving a net of £1,607,056,170 across the whole country.

However, it is not just small businesses that are able to capitalise on the opportunities that hybrid working offers, big businesses are also looking to benefit from the shift to hybrid working and more top enterprises embracing remote such as Google, Twitter, KPMG and Nationwide. A BBC poll interviewing 50 of the UK’s largest employers showed that 43 of the 50 firms were embracing the mix of home and office work as the UK eases out of lockdown and even those who are not said they are keeping the notion of hybrid working under strict review. 

The scale at which larger employers are aiming to downsize is not currently known and will most likely vary from business to business however, the Chief executive of advertising firm WPP believes that due to the amount of remote work taking place, they could expect office space to drop by 20%. 

When looking at official UK statistics there are currently 8000 large-scale businesses across the UK (comprising 250 employees or more) contributing to a total of 10,896,000 employees.  

When applying the previous calculations in terms of office space required per person and the average costs of utilities if these larger businesses were to collectively reduce their available office space by just 20%, it could save up to a total of £943,427,800 a year in utility costs and when averaged across the 8000 businesses individually it could potentially save up to £117,929 a year. 

The incorporation of hybrid working and flexible workspaces can bring significant financial benefits to a business regardless of size and could be a vital component in staying competitive as the UK begins to come out of a long lockdown. 

Could location impact hybrid working?

The effect that remote work has had on accessing new talent is game-changing and is now creating the potential for businesses to open more flexible micro-offices across different areas of the UK to accommodate a geographically diverse workforce. 

According to research conducted by Instant Office, when taking into account office space needed per employee, it can be more than £4000 more expensive per year to acquire a conventional leased property, compared to a flexible office space. Nowadays flexible office costs are often bundled into a simple, monthly fee that allows a business to relocate into different offices when they are required and not when a lease is set to expire giving them greater control and flexibility over office arrangements. 

Cost to rent flexible office space in UK cities 2021

(Source: Instant Offices)

Looking at the data the average cost of an office space per person per month in Birmingham is 53% lower than in London and could result in significant savings if a business was looking to acquire and accommodate hybrid workers in different regions. 

When looking at this data from a cost savings perspective London based businesses could be looking to save between £1248-£3336 per employee per year if they were to look at hiring flexible office spaces outside of London. 

The demand for flexible office spaces has seen a lot of growth in the last few years with pre-pandemic figures showing that the market for flexible offices increased by 11% throughout 2019, and although it experienced difficulties due to the widespread disruption caused by lockdowns the top markets have continued the trend resulting in an extra 4% growth throughout 2020.

As businesses continue to adjust and adapt to the ease of covid restrictions costs are becoming an important factor in staying competitive and more businesses are beginning to seriously reevaluate their office portfolios to adjust for a hybrid workforce. The decision to downsize office space to more flexible hybrid offices could lead to businesses saving across the board freeing up important resources that could be reinvested into better technology and expansion.