Choosing a location has been a critical business decision ever since the days when ancient farmers claimed prime spots near fertile riverbanks.
The places where we do business may have changed, with commercial zones, Central Business Districts and Business Improvement Districts now a key focus.
But in an ever more connected world, how relevant is office location?
Sense of place
In fact, a prime office location is critical. It has an impact on physical infrastructure, recruitment and retention of workers, growth, collaboration, client attraction and for building trust in your business.
According to KPMG’s Real Estate in the Digital Age report, regardless of the march of Artificial Intelligence and wireless working, businesses still need physical spaces where employees can work together, build networks and share new ideas. That can be through dedicated office space or membership of a co-working space.
For example, if your base is in Canary Wharf, you know you’ll be able to recruit from a highly skilled, diverse talent pool and your neighbouring businesses will either be great, useful brands to collaborate with or rivals you can keep an eye on!
Despite the rise of the telecommuter, lots of employees will work outside the office for at least part of the week. Some of the most creative tech firms, Google and Yahoo, discourage or prevent employees working from home, preferring them to operate in a collaborative office space.
To that end Google, Amazon and Facebook – in theory the ideal candidates for teleworking – are building expensive new offices in London and other cities for their regional workforces.
If you're not a multi-billion pound global brand yet, the benefits of prime office locations are not out of reach. Office provision is evolving to make it easier for SMEs to base themselves in the optimum commercial districts of cities.
Flexible office spaces like serviced offices are growing at a rapid rate, allowing smaller businesses to think differently about their space needs. Space efficiency – taking the right amount of office space you need at the time and growing that as required, enables small and medium sized businesses to locate themselves at the centre of the urban business hub. Even in London, this allows SMEs to access talent and build networks for enhanced growth.
Source: Cushman & Wakefield
This approach has seen a study into Serviced Offices and Agile Occupiers in the City of London by Radimus Consulting predict that by 2025 the market for serviced office space – which offers shorter-term lease options than conventional offices – will grow by 77% in the capital.
But at the same time, clever utilisation of space and flexible working can make your business super-efficient.
"A business with 200 employees doesn't need 200 desks," said Chris Lansbury, commercial manager of Crown Relocations in an interview with IDG Connect. “Workplace studies show 40% of office space sits unused.”
By introducing flexibility you can keep control of your costs while retaining that vital office space your business needs.
The teleworking efficiency myth
Technology has for 25 years been accused of bringing about the death of the office. But it has yet to happen and research from the London School of Economics shows that it likely never will.
A study into the benefits of home-working over time showed that if home working is in place for a lengthy period, employees stop seeing it as a benefit or privilege and productivity suffers.
Dr Esther Canonico from LSE’s Department of Management said in the report: “This study provides a glimpse into a future where flexible working practices could become business as usual and seen as an entitlement by employees, especially among the younger generation. Whereas once people saw it as a favour and felt the need to reciprocate and give back more to the organisation for having that benefit, in this future, they will not.
The study showed that some home working employees feel resentful that employers don't pay their utility bills, or cover stationery costs, for example. Some managers, on the other hand, think home workers take advantage of the situation."
So as well as the benefits of networking, connectivity and growth that prime office space provides, there is also no benefit to not having it, with habitual homeworking increasing professional isolation and a decrease in knowledge sharing with colleagues.
The truth is that as your business grows and looks to enter the recruitment market, more Millennials are being drawn to urban centres like London and office space helps them work more efficiently.
London population 2016:
Source: Office for National Statistics
Chris Lansbury believes that, having tried teleworking, the workforce has realised it still craves personal interaction while business has recognised that those face-to-face relationships are better for business.
“People still have a desire for companionship,” he said. “To work together and meet colleagues. We’ve seen a kick-back from some of our clients, with companies realising the value of teamwork. They want to create a workspace which tempts people back into the office.
“Businesses are valuing face to face interaction and team play. They are realising you can’t build a team ethic when people are working at home and not in a team. However they also know that flexible working is key to attracting new talent. There’s a real possibility of missing out on graduate talent if you ask them to sit at the same desk every day from 9am to 5pm. Getting the balance right is so important.”
What should you do?
The office is still a cornerstone of an SME's growth strategy. As you employ people and build a business, you need a base for people to share ideas, inspire each other and come up with innovative solutions to challenges.
While that used to be the primary role of the office, moving forward workspaces are likely to transform into part of a multi-option solution. Your business may want to secure a specific amount of space now and seamlessly expand it in the future as you bring in more employees.
You may also want to offer some workers flexibility to work off-site or in co-working areas alongside other small innovative companies and freelancers.
PWC’s report ‘The Workforce of the Future’ says you should plan for a dynamic, rather than static, future. In other words, there will be changes to how office space is used and how employees work. Plan for change to come and pledge to have no regrets about your decisions.
All of Orega’s centres are specifically situated in prime business locations for ease of access to all clients and their guests. If you would like to view any of our business centres, please get in touch.