Have Remote Workers Permanently Affected Commercial Property Leases?

Not so long ago, remote working was something that was done by a small minority of people. It may have been that an employee wanted to move away and the employer allowed them to combine home working with regular office visits.

Then there is the modern breed of digital nomads who work remotely from foreign cities and move around as they desire. Nowadays though, remote working is far more mainstream and 2020 saw a huge rise in people working from home.

The pandemic saw many people switch from the office to their home out of necessity and this has had a big impact on landlords of commercial buildings. In New York, offices are being turned into homes as the cost of the pandemic continues to change how industries work to survive. 

What impact are remote workers having on commercial leases?

There are several types of remote workers today. Digital nomads will often work for an online business where they have never met or even spoken to another employee. The new remote workers would have probably been working in a studio or office up until the beginning of last year and will have many contacts at their previous location.

Then there are remote workers who are hired by outsourcing recruitment companies. These are different types of remote workers. However, they all to differing degrees, affect the commercial property market.

Right now, Australian office vacancies are at a 24 year high due to Covid and the rise of the remote worker. Companies are needing less office space as they ask staff to work from home. Businesses can retain smaller work areas and use hot-desking for when remote workers need to spend a few hours on-site.

Outsourced remote workers will often work in office areas, but these will be owned by the recruitment company bypassing the need for commercial leases again. The result is that less commercial property is needed. 

Why is remote working becoming so popular?

Then benefits of remote working are being felt by the employee and the employer. These days, remote working is seen as a key way to conduct business in an ever-changing world, and many businesses prefer it.

Businesses can save a vast amount of money on not leasing large center city properties and this, in turn, helps to increase profits. As Covid hits all manner of industries and their revenues, any reduction in overheads is to be welcomed.

Employees enjoy more freedom and less wasted time traveling. The employer saves money and in some cases, can even stop worrying about recruitment. 

How are recruitment companies affecting the commercial property market?

Outsourcing recruitment companies have also played a part in the reduced need for commercial property. Outsourcing companies will take care of advertising positions and recruiting staff for their clients, but some firms specialize in putting these new recruits into remote teams.

The differences between outsourcing and remote working are not always that big. By using an outsourcing recruitment company a business would have all the benefits of remote workers. They would not need to lease office space, and they would have the benefits associated with outsourcing too.

An outsourced remote team or individuals means that a business can hand over all recruitment responsibility to another firm, and then have selected workers operating remotely overseas. 

How is the future looking?

As far as commercial office space is concerned, it seems likely that there will be far less demand in the future. Businesses have closed due to failure, and others are streamlining their operations.

Many remote workers are enjoying their new way of operating, and companies are looking at the benefits of outsourced remote teams. As more business is done on the internet, there will be less need for land-based locations for certain types of industry.

Clicking on https://www.delonixteams.com/ shows how some of these companies put together teams of employees for their clients, and what skill sets they have.

Why lease expensive office space in Melbourne when you could have virtual assistants, sales representatives, and graphic designers, working in the Philippines which is only 2 hours behind. Many remote workers in different time zones will work the hours to suit your business too. 

Summary

Remote working isn’t just a new work fad such as core hours or 4 day weeks. It has proven itself to have many benefits for both the employee and the bosses. The cost saving on rent alone is one reason that many businesses will not return to their old habits once Covid finally ends.

Of course, this means that commercial property will not be needed as much as before, however, there are blessings to this. Landlords have already realized the opportunities there are in converting offices into apartments and low-cost housing. 

This means that cities such as London where people struggle to find affordable homes may soon have many more options and hopefully fewer people on the streets.