Whilst there are winners and losers from the supposedly “revenue neutral” changes to the business rate, the tax fundamentally is based on property value. And broadly speaking the larger the premises, the more a business pays.
We share the frustration that these changes to the business rate are not fit for purpose. However, there are ways businesses can lesson the impact by adapting working policies and stripping out the unnecessary costs of maintaining real estate.
Certainly, all businesses are different. Shops, restaurants and factories for instance need the premises and that won’t change anytime soon. But offices are a different matter. Walk into many office-based businesses and you often see banks of empty desks. In central London one desk can cost up to £7,000 per year in rent alone. The business rate aside, it’s a sizeable sum. Businesses should be asking if desk space is really needed when employees can be empowered to work more flexibly.
Flexible working is actually a ‘no brainer’ for most organisations. Employees are given flexibility in terms of where they work – whether that be at a customer site, home or even a motorway service station. Invariably employees empowered with this greater freedom are happier. But more importantly from the employer’s perspective, the CIPD reported 83 per cent said adopting flexible working had resulted in improvements in terms of productivity.
To be clear, flexible working doesn’t mean workers never come in to the office, face to face time will always be important, it just permits greater variation and with this can come initiatives like hot desking. If firms find this works, then it means looking at the office space issue.
The technology is largely there that enables companies to do this. Increasingly organisations are using software that allows voice and video calling along with the ability to share presentation screens and instant messaging.
Sadly, sometimes connectivity can lag behind. Whilst Skype guidelines (for instance) indicate that 1.5 Mbps (both download and upload) should be sufficient for HD video calling, in reality you need much more than this for it to really work how you want it to – for instance to guarantee there won’t be any buffering. And of course, there are likely to be other devices and applications in your home competing for that bandwidth.
There remain too many broadband ‘have nots’ in the UK. It can be surprising to many that even in London there are areas that do not have access to a high-speed broadband connection. Adequate broadband is not just a rural issue. So, for now it means that there are many current flexible workers who aren’t getting the experience they should, yet with time this will change. With this it may well be the case that in the future offices, as we know them today will have changed beyond all recognition, as indeed will the associated costs that come with them.