Reimagining the office post covid-19

"Everything in life... has to have balance." - DONNA KARAN

With the successful rollout of the COVID-19 vaccine, businesses across the UK are currently making plans to gradually reopen their office premises as we emerge from lockdown.

However, with the five-day working week in the office set to become a thing of the past for many UK businesses, the days when a company would own or rent an office with a desk in it for each and every member of staff look likely to be coming to an end. Neil Mackey, Account Executive at insurance broker Gallagher, discusses what the ‘new normal’ is likely to look like for UK offices, as well as highlighting the importance of businesses ensuring they have appropriate insurance in place for any changes they make to their office space.

The COVID-19 pandemic has upended normal life in countless ways, but the switch from commuting to the office each day to working from home has proved to be one of the most significant changes for millions of UK workers – with video conferencing calls replacing formal meetings and informal catch-ups overnight.

This sudden and dramatic shift looks set to bring significant long-term changes to the future of office design and activity within workspaces – with recent research we conducted among 1000 business leaders indicating that long-term, many UK companies are rethinking the space they need post-pandemic.

THE CHANGING ROLE OF THE OFFICE

According to our research findings, almost half (45%) of businesses with office space intend to downsize by the end of 2025 – and are planning to decrease floor space by 40 per cent on average - while a further one in seven (18%) have already reduced their office space since the start of the pandemic.

As a result, around 18 million square feet of office space is set to become redundant in the next five years – or 18 percent of all current square footage in use – saving businesses with office space an estimated £45,430 each per year in rent.

The most common reason for downsizing is to reflect the increased number of employees working from home in the wake of COVID-19. To reflect this shift, more than two-thirds (68%) of businesses have already made or are planning to make changes to their working from home policy, including a third (33%) having already implemented policies to allow employees to attend in person four days a week or fewer.

With more and more companies adopting hybrid work models – enabling employees to combine onsite and offsite work as they and their employers see fit - 12 per cent of UK businesses intend to utilise co-working spaces such as WeWork locations more often, instead of an ‘owned’ office.

The majority of businesses we interviewed plan to keep some kind of space - with only three percent planning to completely close their offices and move to a fully remote set-up. However, with the role of the office changing, with time in the workspace mainly spent working collaboratively or attending meetings, 13% of businesses intend to look for premises that have less desk space per head, to provide more space for break-out areas and meeting rooms,.

INSURANCE IMPLICATIONS

From an insurance perspective, making significant renovations to an office space constitutes a ‘material change’ in risk. It’s therefore important that businesses discuss the changes with their insurance broker as failure to report a material change could have implications on cover, such as restrictions being added, or the policy being voided altogether.

For businesses who are planning on downsizing or making significant changes to their premises – including renovations to their current office space or using the office for a different primary purpose going forward, such as storage of equipment, or the use of IT - taking the time to review their insurance, will help them ensure their policy reflects their current situation, providing them with confidence that the cover they have purchased will be sufficient when they need it the most.

For more information about insurance considerations for businesses who are looking to modify their office space, get in touch:

neil_mackey@ajg.com or visit www.ajg.com