By Chris Waight MRICS, Project Director. As featured in Charity Finance.
Charities are rightsizing their office holdings at pace. But how do you find the right balance?
The way is which we work and do business has changed dramatically since the pandemic and has left many executive boards and trustees considering what their future office space looks like in a hybrid world.
The average office worker in London now works over 50% of their working week in the office compared to 76% pre pandemic. As a result, we have seen a structural shift in the office market with a general trend to occupiers downsizing their office footprint.
Managing this significant change presents both risks and opportunities which need to be carefully considered to find the right balance to maintain and enhance your culture, identity and energy to deliver your mission.
The business case for downsizing is well known and reported. It allows charities to redirect funds typically spent on overheads to be diverted to towards programs and services that directly benefit beneficiaries. It also gives rise to improved work life balance, with less time and money spent on travel. By maintaining smaller premises, charities can be more agile, making it easier to adapt to economic changes.
Increasingly hybrid/remote working has also become a battleground on the war for talent with key hires demanding more flexibility when it comes to how and where they work.
The amount of space being reduced varies based on the individual requirements of the charity. On average we are seeing a 50% reduction when leases expire, or buildings are sold.
The sliding scale of occupational strategies ranges between charities taking the plunge and going fully remote to some charities who are expanding their office footprint.
“Place an emphasis on collaboration and community”
Is there a danger of going too far?
When you come to the office you’re lending your energy, enthusiasm and drive to make positive impact in whatever function you’re performing. People want a purpose, a drive to do the best they can to help others. The workplace needs to support this. And going ‘too-far’ when it comes to downsizing may well then impact morale, productivity, staff development, well-being and other intangible factors that make the office unique.
We are still in the early stages of understanding more enhanced hybrid working policies and their longer term ramifications on performance.
Your senior leadership team will either lean towards a “more or less” requirement for in-office working, or be somewhere in the middle. The directive is likely to trickle down.
However, maintaining some physical space often remains key. Not only to ensure the senior team has somewhere to work from and meet in person on a regular basis, but to also support others. Informal training, advice and conversations can happen when everybody is working from home, but experience is now telling us that there is nothing like being in the same place with other human beings.
Back to the office
Some well-documented strategies for creating a great place to work and ensuring that staff want to come to the office include provisions such as on-site bars, cafes, gyms, etc. These potentially work for some, but not all. How might a charity tap into such benefits? Think laterally and look to the local community. Obtain staff discounts with local amenities near the office, and ensuring working patterns support their use.
Maybe by putting an emphasis on collaboration and community. Social and networking events make coming to the office more engaging. Purposeful in-person meetings and activities that are best done in a shared space, like brainstorming sessions or project kick-offs, reinforce the notion that the office is where meaningful collaboration happens. Most people get more involved when in person. However, ensure that everyone always has a voice. For those that are unable to join in person, it’s important that they have the best experience they can from elsewhere.
Rightsizing strategies
Below are some of the main strategies being deployed as charities seek to reduce space:
Taking less space at lease break or expiry.
Subletting space.
Selling freehold building into “rightsized” freehold or leased/flexible space.
Sharing space with another charity.
Exiting leased or freehold property and move into flexible office space.
Refurbishing and optimising existing space.
Going fully virtual.
Top considerations
When reviewing your property strategy, it is essential that it mirrors your organisational strategy. The charity’s vision and organisational goals need to be clearly defined so the property goals fit the direction of the business.
It is advisable to start by setting up an internal property steering committee with representation from HR, IT, property and finance, as well as a senior executive sponsor. This group will likely meet at regular intervals from project inception to completion.
1. Understanding your requirements
Every charity will have their own individual needs and each team in the organisation will have varying requirements to be in the office versus working from home. Enlisting the help of a workplace consultant is a useful starting point to get under the skin of how much space you require now against what you might need in three to five years’ time.
If you have a lease event on the horizon you will need to engage a commercial agent to help identify alternative accommodation in the market and benchmark the cost of your current premises against new potential options.
This information is a wonderful thing to capture. But then, so is your company culture. A balance of these two things needs to be taken into account, then ascertaining the what and why, along with how, needs to be included within any new (or existing) spatial modelling analysis.
2. Weighing up your preferred option
Once you have a property strategy defined, you’ll require further analysis of your options around this strategy. Your commercial agent will work with you to help benchmark your current options against future options.
Once you have assembled these options, you will be able to benchmark the costs involved in each option against intangible factors such as staff retention, business interruption and cultural change.
“It is advisable to set up a property steering committee”
3. Leveraging technology
The rise of property related technology has meant that decisions can now be underpinned by an abundance of data. It is now possible to analyse everything from air quality to meeting room utilisation. This information can help shape all aspects of your new hybrid office environment.
4. Tech-free
The technology within the workplace itself is important, as is the technology for those working from home. However, on the other side of the coin, ‘tech-free’ rooms that allow people to explore new ideas, innovate freely in a different way, might also be a consideration.
5. Office design
Design is, of course, subjective. Just like art itself, someone will love something, while others are not so keen on it.
Good design itself isn’t just about the aesthetics of the space though, it’s the blend of form and function. There is little point in having a great looking place to work in, if it is always too hot or too cold, noisy or simply not supporting you to undertake the task at hand.
So how do we look to bring form and function together? The answer is: by co-designing a space, empowering people to be part of the process, to own it, and therefore make decisions along the way.
We have noticed charities placing particular importance on a few key trends compared to corporate spaces.
As touched on above, with some charities reducing space by as much as 50%, multi-functional spaces have become increasingly important. This includes meeting rooms which can extend into workshop/townhall space or breakout spaces which can be used for more informal meetings.
Energy efficient solutions are another key consideration. Sustainability is increasingly important for organisations, and investing in energy-efficient solutions can not only improve ESG, but have long-term cost benefits. An easy solution is to use LED lighting, which uses significantly less energy than traditional bulbs and has a longer lifespan.
Non-profits often engage with diverse groups, including volunteers, donors, community members, and beneficiaries. It’s crucial to design an office that is inclusive and welcoming for everyone who walks through the door. This means designing spaces that are wheelchair-friendly, with wide doorways, ramps, and accessible bathrooms.
The suitability of design will always be unique to each organisation, which is why it’s crucial to involve stakeholders throughout the entire process.
Summary
Charities are rethinking their office spaces, often opting to “rightsize” by downsizing or reconfiguring their holdings to balance cost savings with the need to maintain a supportive, flexible workspace.
With more employees embracing hybrid work models, the shift away from traditional office spaces is accelerating. On average, London charities are reducing their office space by around 50% as leases expire or properties are sold.
Modern office spaces for charities should be designed to be multifunctional, energy-efficient, and accessible, catering to the diverse groups these organisations serve. The key to successful rightsizing lies in balancing space with culture – creating work environments that encourage connection, creativity, and a sense of purpose for all employees, whether they’re in the office or working remotely.
