Returning to the office or not could have a wider impact than simply addressing the needs of the immediate staff and company. In fact CEOs that intend to return their staff to the office have the potential to save a wider network of businesses and jobs associated with the high street, or aid their demise if footfall from our city centres continues to dwindle.
This week we have seen the next phase of lockdown measures easing throughout England, as bars, restaurants, cafes and non-essential retail reopen for the first time in four months. It would appear the rocky road on which we have travelled over the last 12 months due to Coronavirus could soon be coming to an end. It would certainly seem so from the hordes of shoppers and drinkers making the most of the spring sunshine in beer gardens and high streets up and down the country.
It must be a welcome relief to the vast retail and hospitality sectors that rely on a high street presence. However, understandably there is still much uncertainty in the sector. The stop start trading of the last 12 months, as well as years of dwindling profit margins prior to the pandemic, are cause for concern. The future of the high street depends on high footfall in our cities and town centres, but fears that many office workers could be preparing to work from home beyond the lockdown measures lifting could have a catastrophic impact on the high street once the initial hype dissipates.
As CEOs in England decide on whether they will return their staff to the office on a full or part time basis, or continue to work from home, we ask:
- Should they be considering the impact of their decision on local businesses?
- Should it be part of their corporate and social responsibility to support local business?
The Hospitality Sector has Suffered 600,000 Job Losses Due to The Pandemic
In the last 12 months we have sadly seen a variety of independent and major high streets brands close their outlets. Despite the governments efforts to shield businesses from closures and save jobs during the pandemic by shelving rents and mortgages, offering bounce bank loans and implementing the furlough scheme, the mounting costs and arrears have been to too much for many hospitality and retail brands. Consequently, it is estimated that over 600,000 jobs in the hospitality sector alone have been lost as a direct result of Coronavirus.
According to UK Hospitality, prior to the Covid-19 crisis, the hospitality sector was the third largest employer in the country, providing jobs for 3.2 million people. The sector created £130bn in economic activity and generated £39bn of tax for the Exchequer, funding vital services.
Pret was one of several large chains to restructure their business, forcing the company to close a portion of their stores and make redundancies. The chain has so far closed 36 stores and made more than 2,800 redundancies.
The Pandemic has Been the Last Straw for Several Retail Brands
The retail sector has also experienced the loss of some big brand names. Arcadia Group, the owners of fashion brands, Top Shop, Miss Selfridge, Wallis and Dorothy Perkins fell into administration in November 2020, putting at risk 13,000 job losses. While ASOS offers glimmer of hope for some 300 Arcadia staff through the proposed purchase of its brands, it wouldn’t be presumptuous to expect vast redundancies of staff that work in the physical stores. Especially as ASOS is very much a digital retailer.
Looking at the retail sector as a whole, The Centre for Retail Research calculated there were 109,381 job losses in 2020 and suggests 2021 will be worst. They predict 200,000 job losses for the sector. The high street has been experiencing a decline in revenue for several years, leading to the closure of some major retail giants. Debenhams is the latest victim. Each brand has their own story, yet a pattern of increasing rental costs, high online competition, low profitability, low investment in stores and, to top it all off, Coronavirus lockdowns have been prevalent to the closures.
High Street and Hospitality is Not Just About The Coffee Houses and Shops
The hospitality and retail sectors encompass a wider network of suppliers and services that are reliant on a prominent high street presence. From the cleaners to the cup suppliers and recyclers. The product manufacturers and packaging suppliers to the air conditioning maintenance provider. The delivery companies to the warehouse managers. Landlords to the real estate agents. Pub singers and entertainers to the sound and lighting engineers. Venues to hotels and food stands. There is an immense network of suppliers, manufacturers, agents and workers that rely on the hospitality and retail industries.
In order to sustain the high street for future generations, there needs to be a steady flow of footfall in towns and cities all week long. Much of which traditionally comes from office workers on their commutes and lunch breaks.
It is apparent from the images in the press of the recent lockdown measures easing that there is still a clear demand for pubs, restaurants, cafes and non-essential retail. However this level of the business needs to maintain momentum beyond the initial opening if the sector is going to recover. Otherwise, the high street could look very different in the years to come.
How Returning To The Office Could Save The High Street
With the UK vaccine roll out on full steam ahead, the rule of ‘work from home if you can’ should soon come to an end. Office workers across the UK can emerge from their makeshift home offices and return to their workplaces for good. An influx of office workers back into town and city centres is certainly going to be essential to the high streets performance.
By returning to the office, custom from commuters and lunchtime shoppers will go a long way to supporting the retail and hospitality industries recovery. As well as the overall economy.
Businesses and Workers Remain Divided About Returning to The Office
Despite workers soon being able to return to the workplace, there appears to be a clear divide between business owners and their employees when it comes to the prospect of returning to the office full time.
In study by Best Practice Institute over 83% of CEOs reported they want their employees back in the office in 2021, while only 10% of employees want to go back to the office full time. Instead the majority (64%) would rather a hybrid work culture. This is where workers have the option to work from home and the office during part of their working week.
The study monitored employees from a range of sectors since the lockdown commenced in 2020 and it would appear the desire to be back in the office asap is largely determined by the sector. Financial and technological service employees want to back in the workplace. Yet, employees working in healthcare and education services prefer a working from home.
Clearly, there is work to be done to understand which businesses will adapt to a nuance work culture. As CEOs across the country make those big and bold decisions, we ask should they also consider how the impact their decision will effect the wider business community?
What Has Corporate Responsibility Got To Do With It?
Corporate responsibility is where a business identifies its impact on society, the economy and the environment in order to create a positive and sustainable business model. For CEOs of businesses returning to the office, their decision could have a much greater effect on businesses, the community, jobs, and amenities. If office workers continue to work from home long term, the high street could suffer greatly. As a result, further store closures could not only result in redundancies, but also cut off a lifeline for those that rely upon a store with a physical presence on our high streets, such as the elderly.
As an office refurbishment company for London, Kent, Surrey and Sussex, we understand how businesses across the UK are tempted to reduce their overheads with smaller properties and lower running costs. We would be the first to offer ideas on how to change your layout to meet your new business needs. However, it’s not just about us! The impact of our decision can have a domino effect that could be catastrophic to our high street and the jobs it provides.