The Future Of Hybrid Working For Business | Utility Bidder

The Future OfHybrid WorkingFor Business

Hybrid working looks to be here to stay post-pandemic for a number of businesses, meaning there are changes afoot for several employers.

We have looked at how employees are perceiving the new hybrid working model, including all the positives and negatives surrounding it, as well as how this can impact business energy usage.

What is hybrid working?

Hybrid working is a location-flexible arrangement that allows employees the choice to mix on-site with off-site work, usually between their office and home environments. Hybrid working is by no means a new phenomenon, however, due to the recent COVID crisis, it has seen a massive uprise in popularity across the modern workforce. A recent report from Accenture states that 83% of workers surveyed prefer a hybrid working environment in which they can work 25% of their time fully remote.

Is work from home the new normal?

The significant increase in uptake amongst flexible forms of work, with hybrid working in particular, has given employees a new set of expectations in the workplace – 72% of employees now want a mix of remote and in-person working. Therefore, businesses that are not supporting hybrid working are putting themselves at risk of higher employee turnover and limitations of what talent they are able to acquire as remote working rises in popularity worldwide.

As organisations begin to look at moving forward in a post-pandemic future, many will be considering the permanent implementation of a hybrid workforce (us included) - a sentiment that is met with resounding positivity amongst employees across the globe. A McKinsey report showed that 50% of employees now say they do not want to go back to a full-time office work model, with over a quarter of those surveyed considering switching jobs if employers returned to a fully on-site work model.

A supporting YouGOV report stated less than four in ten people want to leave their house to go to work once the pandemic is finally over. Employers are also coming to terms with the fact that their employees have become accustomed to a hybrid model of work, with a report from Acas revealing that more than half of employers expect to see increased flexible working requests as the UK comes out of lockdown.

It is quite clear that the implementation of hybrid working doesn’t appear to be going anywhere anytime soon, and it is important to be aware of the pros and cons of hybrid working and how it can impact a business.

Benefits of working from home for employers

Access to more talent

Hybrid working has redefined the ways in which businesses can find and recruit talent - the ability to remotely recruit employees means businesses are no longer hindered by geographical barriers. The hybrid model allows for companies to access a cheaper and more efficient workforce by having the ability to utilise experts worldwide, saving money on ineffective recruiting practices.

The supply of remote employment opportunities is also rising during the pandemic, as professional networking site LinkedIn saw remote job postings increase by more than five times. There are growing signs that the job market has been affected permanently as, more than a year after the pandemic caused employers to shift their teams to working from home, there are more remote roles being advertised than ever before across all sectors.

A Robert Half report states that the majority of UK businesses expect hybrid working to become a permanent part of working life moving forwards from the pandemic, supported by the fact that there has been a 190% increase in the total number of remote work job postings since the pandemic began.

Cost reduction

When it comes to a hybrid working environment there is no need to have numerous offices filled with rows of desks and expensive hardware. When implemented on a larger scale, hybrid working can allow businesses to scale back office space and decrease expenditure on overheads.

When a business has determined how many employees will be at the office, it can optimise it for new occupancy levels and plan to cut down costs of rent, supplies and other business expenses. The full extent to which businesses can reduce costs is not fully known, however a report by Global Workplace Analytics and Design Public group stated that up to $500bn per year could be collectively saved by businesses if employees had an equal split between working from home and in the office.

Increased productivity

The degree to which hybrid working can benefit productivity will vary from business to business and will often depend on accompanying factors, such as how effectively the model has been implemented and received through the different layers of the workforce. However, research from CIPD has found that in the UK, a third of employers have said that working from home during the pandemic has brought increased productivity to their business and, more specifically, businesses that offered manager training for remote employees reported a 43% increase in productivity across the board.

The realisation that employees can maintain and even improve productivity is one that is slowly being recognised and endorsed by employers, with 63% of high-growth organisations having enabled a ‘productivity anywhere’ workforce model.

Increased employee welfare

The increased flexibility that hybrid working offers employees can provide a variety of benefits for them. It allows employees to have an increased level of control over their work-life balance which can lead to a more productive, happy and engaged workforce. Hybrid working can alleviate some of the day-to-day complications employees face and can have knock-on effects on efficiency throughout business operations. According to a study by Moneybarn, in the UK the average commuting time is 62 minutes a day - when added together, that’s five hours per week that can be used more productively whilst also eliminating the stress of long commutes.

A hybrid work model also gives employees new opportunities on how to spend their time, with research from Microsoft Surface stating that 55% of employees use their lunch breaks to focus on their personal life, with 56% reporting an increase in their overall levels of happiness when working from home. Employee happiness is an important factor in maintaining staff morale, increasing job satisfaction and reducing the level of turnover an organisation can experience. An Owl labs report states U.S companies that are allowing remote working have seen a 25% lower employee turnover rate.

Drawbacks of hybrid working for employers

Diminished client experiences

Depending on what your business offers, client interaction can be an essential element of day-to-day operations and, without face-to-face communication, clients may potentially receive a diminished experience than before. Due to the nature of how workflow shifted and the increased adoption of digital based communications, there may be increased potential for scheduling conflicts and unexpected technological problems may cause opportunities for new clients to be missed, and current clients left feeling unsatisfied with your service.

Adapting new office spaces

The conversion from an in-office working environment to a hybrid model will require a considerable cultural shift and will demand more from managers and organisations to ensure it is successful.

A hybrid office will require increased levels of functionality. Workstations may need to be turned into meeting spaces and hybrid offices will need to have a mix of assigned, open and reservable spaces that meet all the needs of a flexible workforce. This may require considerable financial investment and for businesses which lack the sufficient resources or are currently based in older buildings, this type of redesign may pose a significant challenge.

The ability to hire remote workers from anywhere in the globe also presents new opportunities for businesses to acquire multiple smaller offices to accommodate those based in different parts of the country who also want access to an office environment. This could lead to more businesses subletting spaces offering a more cost-effective approach to the traditional office whilst providing business owners with more flexible and short-term alternatives.

However, it is also a possibility that instead of reducing office space, businesses may have to increase overall floor size to accommodate for appropriate social distancing guidelines. Ultimately this will vary from business to business, and it is important to explore the options and find the one that is best suited to you.

Management difficulties

Hybrid working environments have potential to put greater pressure on managers who will now have to manage and support employees in new and different ways. It is important that managers are given appropriate training and support to effectively manage hybrid teams.

Managers must also make sure their employees are given the correct tools and training to work effectively in their home environment. This may put increased levels of strain on an organisation’s IT department not just to ensure employee problems are resolved, but to also the ensure the security of the organisation’s data is maintained.

Depending on the organisation, implementing hybrid work can be more complex and may need different hybrid models across different departments according to specific roles and procedures. Internal communications and operations may potentially need significant overhauls and there are a number of legal implications that must be considered.

How companies can save money if employees work from home

One of the most important developments is how hybrid working is changing offices across the UK, and how those businesses pursuing a hybrid model of work are adapting their office spaces to suit the needs of their employees. Research conducted by Microsoft states that 66% of business decision-makers are contemplating redesigning their physical office spaces to accommodate for hybrid work environments.

A trend of hybrid working is that 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 for a hybrid workforce, with 37% expecting to save on office costs giving them extra funds to spend elsewhere in the business.

When looking at this in more detail, it could be highly beneficial in terms of saving on utility costs for a business that plans on going hybrid. If we take an SME that consists of 49 employees and assume the office size is on average 100 square feet per person (based off UK standards) we can equate that the office is roughly 4,900 square feet in size. Then when assuming that the average energy consumption of a commercial building is 22.5kWh and the average cost per kwh is 17.2 pence, we can calculate that the average energy cost per square foot is £3.87.

From this we can then calculate how much an SME of 49 employees will spend on utility costs in an office that is 4,900 square feet in size:

  • 4,900 x 3.87 = £18,963

Now if the business did decide to employ a hybrid work model and wanted to downsize their office space to a plan that includes shared communal spaces and utilities, then 60 square foot per person would be optimal. Following this choice, we would get a new price for annual utilities:

  • 2,940 x 3.87 = £11,377

From these calculations if an SME did decide to downsize it could potentially result in them saving £7,586 annually on utility bills. If applied across all UK SMEs comprising of 49 employees, it could result in businesses saving a net £1,607,056,170 across the country.

Work from anywhere

The types of contracts businesses are using to acquire office spaces can also have a large impact on utility costs and savings. According to research conducted by Instant Office, when considering office space needed per employee, it can be more than £4,000 more expensive per year to acquire a conventional leased property, compared to a flexible office space. Flexible workspace costs are often bundled into a simple monthly fee, enabling a business to plan and move into different offices when required and not when a lease is set to expire, giving them an extra element of control and flexibility over office arrangements.

The effect that remote work has had on accessing new talent could also save money in terms of utility costs, as the swap to hybrid working creates potential for businesses to open more flexible micro-offices across different areas of the UK to accommodate a geographically diverse workforce.

Cost to rent flexible office space in UK cities 2021

City Average Cost Per Person Per Month
London £523
Manchester £419
Bristol £408
Edinburgh £373
Leeds £359
Birmingham £245

(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.

Before COVID-19, the market for flexible offices was increasing at a rapid rate seeing growth increase by 11% throughout 2019, and although it experienced hurdles due to widespread disruption and lockdowns, the top markets have continued the trend resulting in an extra 4% growth throughout 2020.

According to research conducted by The Instant Group, the uptake in flexible office spaces is not just being seen in city centres, as demand for flexible office spaces in smaller regional markets is also seeing a sharp increase.

As costs become more important than ever in staying competitive, businesses are now re-evaluating their office portfolios to adjust for a hybrid workforce and downsizing to more flexible hybrid offices could lead to businesses saving across the board freeing up extra resources that could be reinvested into better technology and expansion.

If you’re looking to open up hybrid offices in the UK, we can help with setting you up with the best possible utility service for gas, electricity, energy and water. Or why not go green with our renewable energy?

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