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A new report from KPMG speculates that hybrid working could transform local high streets in some business dense areas.
Hybrid working could re-energise local high streets in business hubs, according to a new report.
The New working patterns and the transformation of UK business landscape report by KPMG says more people working from home could free up office space in dense business areas by as much as 40 per cent and attract other businesses in with cities like Manchester, Bristol, Glasgow, Leeds, Birmingham and some parts of central London seeing an employment rise as a result.
However, other areas with less dense business areas could see a decline in employment and may need to be transformed into more residential, leisure, retail and other uses, says the report.
It estimates that, as the business landscape consolidates, the change could boost overall UK labour productivity by 0.5 percent, thanks to businesses being able to tap into a larger pool of workers, suppliers and clients.
Yael Selfin, Chief Economist at KPMG UK, said: “As we emerge from the pandemic, businesses need to adapt to the new environment they will be facing. Some may choose to relocate to larger business hubs to boost profitability, while others in less central areas could see their local customer base profile change.
“While the overall impact on the UK economy is expected to be positive, the changes ahead could prove challenging for those businesses already saddled by the pandemic.”
The report examines how local high streets in residential towns and neighbourhoods could benefit from increased demand by residents during the week. But it says the impact on high streets across the UK is unlikely to be uniform. Some places may be hit relatively hard by the loss of office workers due to their proximity to a larger business hub, which may be compounded by the loss of commuter footfall among remaining employees due to the prevalence of working from home.
Selfin added: “As people spend more time working from home and less time in the office, we could see a revival of the local high street. They will need to transform into places of purpose to meet demand for community-based services, hospitality, culture, as well as retail. High street offering in smaller towns and cities may need to become more focused on residents’ needs and less focused on businesses and commuters.
“This transformation will require local government, residents and businesses to work together to map their future shape and make concrete plans to support and enable the necessary changes to make the most of the new post-Covid business reality.”
Meanwhile, a poll of 22,700 companies by recruitment firm Hays shows 11% employers in London has removed – or has plans to scrap – the London weighting allowance on salaries for remote workers. The survey also saw 28% of respondents say they are planning to hire staff to work remotely on a permanent basis, with this more than double the proportion who said the same in a previous poll, while many firms plan to adopt a hybrid working model.
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