Friday, 28 August 2020

Boris maybe try to push 'back to the office' but big companies have their own commercial decisions to make

 Big companies face a dilemma more than small companies. With a few people a few changes to working practices and your off, plus some can work from home or a rota. May not be easy but is not too hard to organise.
However, the cost of say changing your 5000 person shiny Canary Wharf HQ to be covid safe is in the millions. Plus capacity will reduce by 30-50% anyway - so working from home for many will continue whatever the Government or the bosses want.
Then if covid recedes you have to undo many of the changes again to get capacity back up.
Why bother? You are paying the rent anyway and demanding reductions from the landlords. Just sit it out another 4 months, see if covid goes away. The Bank/Accountant/Agency etc has survived this long, maybe even thrived. If the virus does disappear then great , everybody back in 2021.
If it does not, then oh dear, time to tell the landlord the end of the world is nigh and we are not paying our rent (the landlords go bust with this plan, so rent is never paid in full, the banks foreclose and have to negotiate fractional rates to get the money back on their debt). We wont be needing large offices for a while in that scenario.
So I can't agree with the Government push on this, it makes so little sense for large companies to push for return to work. It is happening a little anyway. France and Germany where they have pushed this have seen a big increase in infections - maybe the conservative british management has got it right?

28 comments:

Matt said...

So having failed initially to understand what impact the lockdown would have on the economy, the government is now trying to undo what it brought into effect before it runs out of money to spunk away.

Problem is they did such a good job (with the media as obedient lackeys) in scaring people that they don't want to go back to work having found out you don't need to sit in car/train/bus for hours each day just to buy overpriced sandwiches/coffee near the office.

Nick Drew said...

Does anyone have an authoritative handle on the Employers' Liability aspects of all this?

will firms get sued to hell if they start office-working again and somebody gets infected therein?

... or on the way to work?? (when I was a wage-slave the widow's payout from the firm was much higher if I died on the commute ... and if I died in a helo accident on the way to a North Sea platform, well, the skies would have been raining £££...)

dearieme said...

I was once booked on a helo flight to a North Sea platform. Then the firm got cold feet - best not to wipe out several academics from the same department, eh?

Canon said...

This is what happens when you needlessly crater the economy without having an exit plan. We have leaders who are utterly negligent and agitators who are all too happy to cheer them on, unfortunately including most of our media.

People aren't going back to offices, ever. It has been proven now that working from home, well, works. Nobody is going to miss their kids getting up and going to bed and hand over five grand to cram themselves onto a shitty commuter train, just to save Pret A Manger and its taxpayer-subsidised jobs.

What's happened is, we've had 15 years of progress shoehorned into a few months. The sooner the government realises this, the sooner it can start to properly plan for the economic transformation that has already happened and continues to unfold.

Like a resident in an old folks' home, the high street was circling the drain already; Covid just pulled the chain. The move from the suburbs to the city only really started in the mid-90s. It has been a blip.

I really fear for the country. The Tories are going to lose shedloads of votes over Covid - not, as the left thinks, because of all the people they've "murdered", but because they have buried the economy for nought.

E-K said...

Canon

Working from home kind of works... the 5 million permanently unemployed is yet to manifest and I was reading a horrific report on the numbers already taking mortgage and credit card 'holidays' yesterday.

The banks are in a vulnerable position.

In order to make WFH work we've pushed national debt to nearly £2tn and adopted ultra Corbynism ... this will mean the already 'squeezed middle' are going to be bled dry of any savings they've made WFH. An even more divided society with more push to the Left.

I touched upon my nephew struggling to find a position in which he can charm his way into a good job (he's highly capable and talented) from his Maths & Finance degree at University.

With the authoritarian BLM in full force remote (contactless) working means that quotas rather than talent will be a lot easier to enforce and supervision a lot harder. More incompetency and corruption leading to more outsourcing.

And those rail commuting costs aren't going away. The newly bought infrastructure and rolling stock (and the hideously priced contracts to foreign providers) are still there - it is going to be like a mortgage defaulter trying to post his keys through the building society's door to make it all go away.

We're going to realise soon why we did commuting to big cities. I always thought it mad but advocated a slow move away.

What has caused WFH is an economic catastrophe of unprecedented proportions and Mr Smug@Home has forgotten that this (and incalculable social and political upheaval) is what has accompanied it.

Interesting times indeed.

Anonymous said...

Wot he said....

Not only do the government not have a fixed plan going forward - see the issue about returning to schools today - but neither do business. There is a need for a new mindset.

The question will always be what works going forward and what cost can be removed. Do you actually need these dark satanic mills of workspaces with middle managers when an algorithm can do the checks for you.

GDP is the only TLA you need to worry about.

E-K said...

Directly and indirectly furlough (subsidy) is making WFM OK.

Unknown said...

If there are two office blocks, one can be converted to flats and the other used as offices to cover the reduced demand.

I think many people will realise how much they hate commuting, which is a form of cruelty comparable to the brutal treatment of 19C factory workers.

Don Cox

Lord T said...

We have had the technology to work from home since the 90s. The only thing stopping it was that managers thought that people wouldn't work and it was rolled out sparingly. Then came covid and managers had to bite the bullet and guess what. it worked fine. Now firms are looking at reducing expensive office space where they can and saving on those expensive building. Even worse was that the plebs liked it to. No more 2 hours stuck in traffic nor travel costs including congestion charges. Things are never going back to what they were. The genie is out of the bottle.

Now the government has realised the unexpected consequences of their knee jerk reaction and calling for people to go back. Business in central London set up to service the commuters are going to go bust, book shops, newsagents, etc. won't have the footfall and the business rates will fall. congestion charges will fall, train users will be just locals.

People will move from a £1M shed in London to a decent house and work remotely. House prices will fall and rents will go unpaid. Who will subsidise the rents of those who don't pay now?

We have not yet seen the full impact yet but it will change our society.

DJK said...

dearieme said...
"best not to wipe out several academics from the same department, eh?"

Nobody's that irreplaceable, least of all academics. Probably plenty of other good reasons for the cold feet though.

DJK said...

It seems to me pointless to try to recreate the old economy based on servicing the needs of commuters. For most people, commuting represents a major inefficiency in their working lives, unproductive time and expense that could be put to much better use. If large numbers of people can work from home, then in aggregate, everyone should be better off, in the sense of more human welfare.

Old Git Carlisle said...

Sometime in the &0's it was decided that the British Gas Grid controllers should visit Rough platform. Twelve regional Grid Controllers plus some Central Control.

We were all to go in one chopper.

Then a machine crashed down south.

We were split into two parties!!!

Story floated was our deputies had taken out a contract!!!


Also from past relating to security

All Grid controllers had to submit list of critical sites in their patch. The consolidated list was present to Sir Dennis Rooke who is reported to have said this was the bombers guide to British gas - the document was withdrawn and all controllers had to sign the official secrets act. The paper was then reissued as a classified document!

Nick Drew said...

@ and guess what. it worked fine

clearly true for some firms, some functions, some folks (my caveats BTL previous post)

it has also helpfully highlighted those employees that are a total waste of space, but were coat-tailing on colleagues in the physical office environment

another kind of efficiency shakeout coming their way

Jim said...

As said there looks to be a reduction in the demand for big offices. The question is how long this reduction will last and will some sectors reduce more or less than others. I suppose big government and big shots will require a big office whatever the cost. The rest of us not so much.

Then how will this reduction pan out over the next five years. How soon will the management consultants be banging the drum for the fantastic advantages of 'The New Modern Office'. Seems likely, all change makes money for someone. Working from home may get a bit stale after five years.

The French idea of a Salle Polyvalent may come into its own, the peculiar ownership and control structure of English village halls may not be so convenient. Fitting Management Consultant's Masterclass Zoomfest in with Older Tap Dancing may be a challenge to say nothing of Demonology for Beginners.

Unknown said...

" helpfully highlighted those employees that are a total waste of space, but were coat-tailing on colleagues in the physical office environment"

I'm told the same is true for school teachers.

The fall in demand for big offices was preceded in recent decades by a fall in demand for churches. Times do change.

Another possible use for office blocks is as hotels for tourists. London is likely to become more like Venice.

Don Cox

david morris said...

Won't this WFH thing sorta peter out come winter when Jack Frost arrives & the bills for heating the house all day kick in ?

E-K said...

"People will move from a £1M shed in London to a decent house and work remotely."

Not many.

Once the rush starts shed prices will drop like a stone and decent houses in the shires will shoot up.

Most Londoners are holding the turd parcel when the music has stopped. They are stuck in Detroit on Thames.

Like I keep saying. Wait until the tax bill arrives to see if this has been a good thing. An ever larger burden on an ever dwindling pool of good earners.

Sunak's furlough and half price burgers (and the sunshine) are what have made this seem like it's working. Let's see when all that stops and the lenders are less soft on payment holidays.



E-K said...

"I think many people will realise how much they hate commuting, which is a form of cruelty comparable to the brutal treatment of 19C factory workers."

+1

Anonymous said...

@ Won't this WFH thing sorta peter out come winter when Jack Frost arrives & the bills for heating the house all day kick in ?

You can by a helluva lot of incremental home heating for half the price of a season ticket.

CJ Nerd said...

"...oh dear, time to tell the landlord the end of the world is nigh and we are not paying our rent (the landlords go bust with this plan, so rent is never paid in full..."

Wouldn't that trash the tenant company's credit rating?

Nick Drew said...

These are endgames being played here, CJN

The considerations of a Going Concern may not be relevant ...

andrew said...

Games are indeed being played.
It was announced that a large outsourcer [capita] intends to shut about 40% of its offices.
This is no surprise.
It is, however, more a reflecion of the business they are in which (sort of) is taking an existing business process and doing it for less.
... except they also have a small consulting division in a dark corner that relies in knowledge and communication of that knowledge.
In that perhaps they are just catching up with other businesses that are widely geographically spread.

Jim said...

A bit of a sidelight but. Locally the ladies tap dancing was due to reopen. But the village hall trustees have had bad vibes from their insurers - the hall is also used for a kiddies playgroup. So the ladies will have to wait a bit longer.

Once you have to start asking all interested parties for permission you are bound to get mired is other people's nervousness and CYA.

Anonymous said...

@andrew - having had a (now detached) tentacle of Crapita as a client, they were very much behind the times, and the project management was some of the worst I've encountered. And I've had several public sector bodies as clients.

If they're learning lessons and catching up, good, given all the work they seem to get handed over by the state, as a tax payer I'd appreciate them being a lot less shit.

As for the WFH, a post on LinkedIn nailed it for a lot of employees - someone pointed out they earn 22k p.a. and now the government wants them to start spending a chunk of that on a season ticket again for a poor public transport system, add an extra unproductive couple of hours a day, and for what? So they can pay for an over-priced Pret sarnie?

But then, this is apparently a government currently floating increasing corporation tax whilst doing sod all against the multinationals who split into units, not for productivity of business needs, but to take advantage of capital being able to cross borders easier than taxation can. So, the SMEs take the strain whilst the GAFAs laugh?

If Starmer finds something close to a personality stuffed down the back of his sofa, that large majority will not look very secure for very long.

Beagle said...

But what:
https://www.nytimes.com/2020/08/29/health/coronavirus-testing.html

So with the specificity set incorrectly the whole thing falls apart, inaccurate tests, inaccurate death certificates, the whole shooting match.

andrew said...

@anon

Obvs I cannot comment too much but...
-Big capita buys small cos and tends to leave them as is, sometimes for years. So there are a lot of small, expensive offices and they are taking the opportunity to ram change through.
-Project managers ... i cannot comment, except that PM done well is a boon to all but it's quality is quite dependant on the PM

Graeme said...

And what happens when broadband goes down for 12 hours? It was bad enough when inter-office comms went down but at least people in the same building could still meet and talk. If everyone is separate....

Matt said...

@ Graeme

Mobile as a backup for those time the fixed line is down. Or vice versa depending on what options you have. People will adapt and broadband is pretty reliable anyway.