In the wake of the COVID-19 pandemic, a new report by insurance broking and risk management firm Gallagher reveals that the landscape of office spaces across the United Kingdom is undergoing a significant transformation.

A staggering 63 percent of UK business leaders are now actively reevaluating their office space needs to accommodate a shifting paradigm in the world of work.

Gallagher’s research indicates that the shift is primarily driven by a growing preference for hybrid working models among employees. Over two-thirds (69%) of UK businesses have embraced this flexible approach to work, allowing employees greater autonomy in their post-pandemic working lives.

One of the most striking findings from the report is that 21 percent of surveyed businesses are planning to downsize to smaller office spaces, while 37 percent are exploring shared office spaces, with 7 percent having already made the move to more flexible working environments. This transition towards smaller offices and co-working spaces reflects a substantial decrease in demand for traditional office spaces across the country.

Hybrid working

The shift towards hybrid working is not without its challenges. Initially met with skepticism, 75 percent of UK business leaders now acknowledge that employees are working more efficiently in a hybrid model. However, striking a balance between office and remote work remains a priority, as 80 percent of businesses have implemented official policies to ensure employees maintain a presence in the workplace.

Cost-effectiveness is another driving factor for businesses adopting hybrid working models and reducing office space. Smaller offices translate to reduced rent and energy costs. While downsizing can have positive financial implications, it is essential for companies to ensure that they are adequately insured to cover risks associated with employees working from home. This includes addressing concerns such as incorrect workstation setup, potential health issues, and the impact on employees’ mental health when working from home on a regular basis.

Despite the generally positive sentiment toward hybrid working, the data suggests that business leaders are still adjusting to this dramatic shift. Almost six in ten (59%) admitted that they initially felt compelled to implement a hybrid model to retain staff. Even now, over half (58%) still feel the need to monitor employees’ productivity when they are not physically present in the office.

What about working from home?

Neil Hodgson, Managing Director of Risk Management at Gallagher, commented on the findings, saying, “Following the pandemic, there has clearly been a shift in the way that people work, with businesses adopting a more flexible approach to how their employees split their time between working from home and in an office.”

Hodgson further advised businesses looking to reduce office space to ensure that employees’ home office assets are appropriately insured and to inform their insurance brokers about extended periods of office vacancy. Additionally, employers should prioritise addressing health and safety concerns when employees work from home regularly and consult their insurance brokers to assess the impact of changes to their working environment on their insurance coverage.

As the working world continues to evolve post-pandemic, the UK’s business landscape is adapting to meet the changing needs of employees and the economic landscape. These transformations in office space and working arrangements are likely to have a profound and lasting impact on the nation’s town centres, requiring buildings to be repurposed to meet the shifting demands of the post-pandemic workforce.





Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at the University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.