Employers aim for hybrid working after Covid-19 pandemic

Companies are launching root-and-branch reviews of working practices, in moves that could have far-reaching consequences for UK city centres, after Boris Johnson outlined plans to fully reopen the economy by this summer.

Some of the UK’s largest employers, including several in the City of London, have kicked-off projects that will determine when and how staff return to the office following the coronavirus pandemic.

The Financial Times contacted more than 20 companies, and most said they anticipated introducing hybrid models of working in which staff split their time between the office and home.

Many office workers have been operating from home since the government imposed the first coronavirus lockdown in England in March last year.

There is currently a stay at home order in place, but last week the prime minister published a road map under which England could fully exit Covid-19 restrictions by June 21.

People have been told to continue to work from home if possible until a review of social distancing rules is completed. It is due to report by June 21.

PwC is carrying out a survey of its 22,000 UK staff, with preliminary findings suggesting many workers want a return to three or four days in the office.

“This will necessitate a fully hybrid model of working,” said Kevin Ellis, chair of the professional services company’s UK business.

Lloyds Banking Group will carry out trials of hybrid working in late spring, involving thousands of its staff, and finance director William Chalmers said 77 per cent of employees “expressed a desire” to continue to work from home.

Most of the roles at NatWest will have an element of homeworking when staff return to the bank’s offices later this year.

Deutsche Bank said plans were being developed “towards the implementation of a hybrid future working model, combining the benefits of flexible working with the benefits of spending time together in the office”.

Aon, the insurance broker, said it would undertake “an in-depth analysis of what the ‘future of work’ will look like . . . which will involve a hybrid of working from offices, from home and other locations”.

Virgin Media said it was starting on a “future ways of work” strategy, which was likely to result in offices being adapted for hybrid working.

Other companies have already concluded the future will involve flexible working, with staff dividing their time between the office and home.

Revolut, the online bank, will move most of its 2,000 staff to “permanent flexible working”, and convert much of its office space into “collaboration spaces”. 

Chris O’Shea, chief executive at Centrica, which has 15,000 office-based staff, said: “We won’t be back five days a week in the office and I certainly won’t. I will keep a mix of flexible working. It’s good for staff, it’s also good for customers.”

Sarah Willett, chief people officer at the Liverpool-based The Very Group, which owns Littlewoods.com, also supported hybrid working between home and the office.

“We want our colleagues to be hyper productive at home and hyper collaborative in the office,” she said.

The move to hybrid working means companies plan to cut their office space.

HSBC said the bank expected to shrink its property footprint by 40 per cent, while Lloyds said it would reduce office space by 20 per cent.

BT is pressing ahead with cutting its UK offices from 300 to just 30. This nevertheless showed its commitment to offices, it said, but more as places for “collaboration and knowledge sharing”. 

A permanent move to hybrid working, in which office workers operate much of the time from home, could lead to widespread failures of service businesses in city centres, such as coffee shops and newsagents.

The national average for city centre footfall is about a fifth of the level before the first lockdown, according to the Centre for Cities, a think-tank.

Andrew Carter, chief executive, said: “I’d expect that a permanently reduced city centre footfall would lead to business failures and lay-offs for them.”

Most companies are planning to partially reopen offices for business-critical needs or for staff wellbeing from March 29, in line with government guidance. 

But there is no clear guidance from the government about when offices should fully reopen.

Alistair Elliott, senior partner of Knight Frank, the estate agent, expressed frustration that the government had set out a “road map about everything except getting back to work, which is the fulcrum of our economic recovery”.

Knight Frank has started to map its long-term working arrangements, where the default position will be for staff to be in the office, although they will be allowed to make their own choices about where to work. 

Bosses are alert to the possibility of divisions opening up in their workforces, between those who attend the office regularly and those who base themselves more from home. 

Workers who prefer to be at home — whether because of worries about Covid-19 or childcare obligations, for example — are potentially at greater risk of being marginalised if they have less access to management.

One person familiar with JPMorgan, where executives are looking at the future of its workplaces, said the bank would move carefully “to ensure the model we go for will be structured so as not to accidentally introduce new inequalities between those in the office and those at home”.

EY is studying what the consequences of a hybrid working culture will be, according to Hywel Ball, chair of the professional services company’s UK business.

For example, he said there may need to be more sophisticated scheduling to ensure that workers were in the office at the same time as others from their team.

Ellis said PwC staff still saw the office as important for learning, mental health and collaboration, which would lead to a £75m programme to refit its buildings.

Like other bosses, Ellis said many staff were eager to return to the office, either because homeworking was not easy or simply for social interaction and training.

Additional reporting by Nathalie Thomas in Edinburgh