Why are you still renting an office?

Covid-19 Baggot Street Dublin
Alan Clerkin

Alan Clerkin

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No matter if you are a small or medium business, even a large business, you are still most probably not in the office. It is because of this pandemic, but this pandemic has only fast forwarded the purposeless of the traditional office.

For example there are two large office blocks near Dublin Mail Drop’s office which are bank office buildings. Both buildings are generally empty and contain a skeleton staff. You know what both those bank’s day to day business are still operational and all their staff are working from home and most probably will be until well into next year.

Google have recently announced all their global workforce can work remotely not only in 2020 but all the way into 2021. The large firms are leading the way in remote working. The pandemic has really shown companies the necessity of certain staff and the obvious non necessity of other staff. As a result of this, unemployment will increase greatly. The other indirect reason unemployment will increase and businesses will fail, is the current huge fall in employees in central business districts. With less employees in office blocks, there naturally will be less people in the restaurants, cafes, clothes shops, newsagents and bars. The Covid-19 pandemic has completely changed the way we think of work, workspace, shopping and payments.

With the yearly increase in the power of information technology and a future with 5G and artificial intelligence added with apps and communication and robotic technologies, the workplace is changed forever. This decade will see changes like we never have seen in the workplace and also with the workforce.

Employees and employers quickly figured out how to work from home. When the pandemic subsides, remote working will remain popular with professionals, mostly because of childcare and avoiding a long commute. Remote working will also become popular with employers due to the massive cost savings in renting office space. As a result commercial property will no longer be a good investment and rents and rates will drop considerably over the next decade. Covid-19 has made it clear to companies that the huge spread of real estate on their books might not be the best way to spend their money.

In a recent survey carried out by recruiter ‘Robert Walters’ found that 37% of businesses in Ireland are considering a downsize in office space. The recruitment company gauged the opinions of management and staff in over 2,200 companies worldwide for this survey. 

The findings went on to state, ‘Moving entire teams to a remote working model can allow businesses to reduce their office space, resulting in significant cost savings. Personal preferences and working personalities aside, some jobs can be more easily carried out from home than others. An analysis of which roles transitioned smoothly to remote working can help in deciding which teams or functions can permanently be carried out from home. Based on our research, designers are most eager to work from home permanently (37%), followed by IT professionals (30%), and professionals in telephone customer service roles (27%). People in these departments do not need their colleagues next to them on any given day.

So aside from the tech giants implementing a more permanent remote working policy for staff, other companies sectors are looking to do the same. A recent study carried out by PwC, found that over 60% of Irish companies are looking at ways to make remote working a permanent option for their employees. Companies such as Allied Irish Bank, have 7,500 employees working from home and may have plans for more permanent work from home implementation in the future for a sizable percentage of their staff. Food company, Glambia’s office based staff are working from home.

In Ireland, we may a shift away from clustering all talent in major cities and allowing more employees to work remotely, where ever they may be. Dublin, for example, has accounted for the vast majority of tech jobs created, which has driven the cost of living up significantly in Dublin the past 15 years. As a result employers have had to pay their employees higher and higher wages, just to keep up, so that those employees can afford to live in Dublin. The rental sector in Dublin is at breaking point, where 2 bed apartments in the city centre rent anywhere from €2,000 to €3,000 per month. Many young educated workers would like to welcome the ability to move to an area outside Dublin, with a lower cost of living and still be able to keep their job in the process.

With job losses and layoffs becoming the norm, we might see a quicker exedus from Dublin, if employees of big companies start working remotely from a different city or town. In a senario where employees work remotely in different parts of the country, this could have a significiant positive impact on employers. Salary expectations will be lower for talent outside major cities such as Dublin and Cork and companies will be able to attract talent, that might otherwise not have had wanted to uproot their families and move across the country.

Also there are a lot of small and medium businesses along with solo entrepreneurs and freelancers renting office space, they don’t actually need. If you are one of those people, think about it, do I really need this office space and all the expenses that come with it? Some Irish companies decide, instead of the traditional office, to rent co working space, flexible serviced offices and virtual office space in Dublin. However, co-working and serviced offices are still difficult to open normally due to Covid-19.

Has the traditional office’s popularity already passed its peak?  Absolutely it has: With commercial rents in Dublin near all time highs and financial pressures on business along with recession threats of Covid, companies are seeking smaller, more flexible and cheaper office space.