Can you work from home in a recession?

The future of work + THG + crypto after the crash

The debate about the future of work is one of the most divisive topics in the UK, and yet the economy has been growing and recovering from the Covid-19 crisis. Now the economy is slowing, potentially heading for a recession, the debate enters a new phase. Businesses are under pressure from rising costs and slowing demand, jobs may need to be cut, and quick decisions have to be made. The Daily Mail has been going for the Bank of England this week over its staff working from home when it is trying to control inflation. “So that’s why the Bank of England is helpless!” its front page roared on Wednesday. The business leaders I have been speaking to agree that what happens next will be pivotal in determining how the modern office works.

Unfortunately, there is more downbeat economic news out this morning. GFK’s closely-watched consumer confidence index has hit -40, its lowest score since records began in 1974. The previous record was -39 in July 2008 as the world headed into the financial crisis (Lehman Brothers collapsed in the September). I flagged last month that readings of -30 or worse on the GFK survey have led to a recession on four of the five times it has previously occurred, so this is not good.

There have been a few other stories regarding changing working practices that have caught my eye this week…

1. Bar and restaurant owners in city centres are reporting quieter Fridays due to fewer people working in the office, but much busier Wednesdays and Thursdays (The Times)

2. The boss of Birmingham-based law firm Shakespeare Martineau, Sarah Walker-Smith, said that critics of home-working, such as Boris Johnson and Lord Sugar, were “out of touch”. She said on LinkedIn: “Please don’t tell us we’re lazy when we work from home. It’s not relevant and it’s simply ridiculous, and it shows how completely out of touch you are.” (BusinessLive)

3. Landsec and British Land, two of the UK’s biggest commercial property groups, said that demand for new office space in the UK is buoyant (FT)

These stories show how communities, businesses and the economy are adapting to flexible working practices. Yes, some city-centre businesses are being hit, but they are also now seeing benefits in other ways and some are thriving. As John-Burn-Murdoch points out in the FT, there is plenty of evidence that people are out and about again in cities, just not in the office.

Yet despite offices not being at full capacity, demand is buoyant for new space from businesses, which is surprising even those in the property industry. Businesses seem to be investing in office space for a few reasons - they need to modernise their property to get their carbon footprint down, office rent is a relatively small cost compared to other overheads, and there is a growing recognition that offices need to be pleasant and productive to encourage staff to come back.

That last point is particularly relevant. More and more business leaders feel that staff need to be given a reason to come into the office for even part of the week.