Towns and villages across the UK set to be bowled over by an influx of office workers

Towns and villages across the UK could see a major financial boost due to the growth of hybrid working brought on by the Covid-19 pandemic, a new report has found.

An economic impact study by IWG and Arup found that rural and suburban economies could generate up to an extra £327m per year, due to the forecasted expansion of flexible office and co-working spaces in towns and villages to meet the growing demand for hybrid work.

The report predicts that new IWG flexible office spaces in suburbs, towns and villages can house 75,000 full-time white-collar workers, whose jobs are worth an estimated £7.5 billion to the UK economy. It also estimated that more than 4,000 new jobs can be created to support office workers who look to cut down on commuting and work from locations closer to where they live.

The report used the company’s growth plans of 800 to 1,200 new workspace locations in suburbs, towns and villages across the UK by 2030. It then modelled the economic impact of that growth, using expected occupancy rates in the new workspaces, across the country.

Up to 30 per cent of the global office market is likely to be flexible by 2025 according to the property consultancy JLL*, which will lead to a major shift in where and how we work. Instead of travelling from villages and commuter towns into urban centres, more workers will be located at smaller offices closer to where they work.

And the increase in productivity from flexible working in these offices is estimated to be worth more than £150 million extra to the UK economy.

In addition, IWG predicts that the change will see dramatic changes to commuting times. In the UK the current average commute is 58 minutes and recent IWG research revealed almost half of office workers say they would quit their job if asked to go back to their office five days a week. Mark Dixon, CEO of IWG, the world’s largest provider of flexible work and office space with brands including Spaces and Regus, says he wants to see an office in “every town and village across the country” and anticipates a rapid shift to new locations as IWG meets the growing demand.

The biggest financial boost will come from local spending by new workers, which is calculated to be worth up to £171m a year. Retail and hospitality businesses are likely to be the biggest beneficiaries. 2,400 potential jobs are forecasted to be created for operation staff at IWG office locations, with a further 2,000 vacancies for face to face workers in shops, cafes, restaurants and other local businesses.

Following an extended period of home working during three lockdowns, flexible working practices have become widespread among white collar industries. Recent research** by IWG found that just a third (33%) of office workers expect to return to the office five days a week, while nearly three quarters (72 per cent) said they’d turn down a 10% pay rise in favour of the ability to work flexibly long term.

This shift has been reflected in growing demand for office space in areas outside of major cities. IWG has seen enquires for rural and suburban sites across the UK grow dramatically this year, with interest now above pre-pandemic levels. Towns that have experienced major increases in demand for office space include Bromsgrove (153 per cent), Marlowe (66 per cent) and Evesham (58 per cent).

Similar changes are also expected across the world. In the USA, IWG and Arup estimate almost 200,000 white collar workers could potentially move to out of town locations, creating up to $1.3 billion in spending near new office locations. In Germany, IWG growth in out-of-city areas is expected in up to 800 locations, with up to 38,600 full-time workers potentially moving to new locations, generating 1,600 new jobs to service those offices.

A third of German workers were working remotely in early 2021***, while two-thirds of Americans say they would like to continue working remotely****.

Mark Dixon, Founder and CEO of IWG, said: “Over the last 18 months we’ve seen businesses not only recognise the benefits hybrid working has on their productivity and their bottom line, but this report demonstrates its growing importance to local communities too. Throughout the UK we are seeing previously dormitory towns and villages come back to life as workers split their time between home, a local workspace and corporate HQ.”

He continued: “With hundreds more rural and suburban flexible working locations expected to open in the coming years, we expect a wide range of vibrant local communities develop with thriving businesses at their heart.”