As some businesses prepare for employees to spend two to three days a week working from home on a permanent basis, existing office space capacity could potentially increase by as much as 40%, according to a new KPMG report.
The increased availability of office space in major business hubs is expected to attract businesses from smaller areas to fill up the vacant space, with cities like Manchester, Bristol, Glasgow, Leeds and Birmingham are set to see employment rise by 5-10% as a result.
Areas in central London are also expected to benefit, as well as smaller towns and cities with a large proportion of the workforce working partially from home.
Meanwhile, less dense business areas could see a decline in employment and may need to be transformed into residential, leisure, retail and other uses.
As the business landscape consolidates, KPMG analysis also found the change could boost overall UK labour productivity by 0.5%, thanks to businesses being able to tap into a larger pool of workers, suppliers and clients.
The report examines how local high streets in residential towns and neighbourhoods are expected to reap the benefits of greater homeworking through increased demand by residents during the week.
However, 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.
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.”
Will Smith, partner for KPMG in the South East, added: “High street footfall has changed throughout the pandemic across our towns and cities in the South East.
“There are clear signs in some areas that adopting hybrid working practices is reversing this decline and helping to bring people back into towns and city centres - a trend that will hopefully continue as it becomes more embedded into company culture.
“However, the report also shows that the region’s less dense business areas may continue to lose out. The coastal towns of Eastbourne and Hastings are notable examples where increasing footfall will require more imaginative solutions.”