#Productivity #The Future of Work
Hybrid working in global cities: how does London’s return to the office compare? Toronto is behind the rest of world.
Workers in central London continue to return to the office, though not as quickly as in other global competitor cities, raising concerns about future economic growth.
Blog post published on 3 September 2024 by Rob Johnson
Workers in central London continue to return to the office, though not as quickly as in other global competitor cities, raising concerns about future economic growth.
It seems that reports of the death of the office have been greatly exaggerated. This was clear last year, where a Centre for Cities’ report found that – even when the final Covid restrictions had only been lifted a year prior – almost half the working week for central London office workers was still spent in the office.
But how has the return to the office continued over the past year? And has London’s return been what we should expect for a large, global city? Centre for Cities’ latest report sets out central London’s current office working patterns and compares them to those of central Paris, New York, Singapore, Sydney, and Toronto.
Put in this international context, the trajectory of London’s return to the office could affect the city’s (and the country’s) future economic performance.
London’s return to the office has been driven as much by workers as their employers
Central London office workers have continued to return to the office since last year. Days in for full-time workers have increased from 2.2 days in spring 2023 to 2.7 in summer 2024.
While rising mandates have accompanied this increase, workers themselves see the benefits of being back in the office – 95 per cent of those surveyed. And even with no mandates, on average London workers said they would still spend two days a week in the office of their own volition. This contrasts to the assertions made in 2020 that the lockdown-induced shift to fully-remote working was some pure expression of employees’ ideal working patterns.
But London’s return to the office has been slow by global standards
London’s return has been slower than most other surveyed global cities: 2.7 days per week puts London only just ahead of Toronto, and far behind Paris at 3.5 days on average. Even in Manhattan the figure was 3.1 days, characterised as a ghost town not so long ago.
Figure 1: London trails the pack when it comes to office working among global cities
https://flo.uri.sh/visualisation/19229728/embed?auto=1
Different slices of the data show where London is lagging. A quarter of London workers come in just one or two days a week, a bigger share than any other city, and it’s not helped by London having the lowest average mandates of all cities. It also has the sharpest drop off in attendance between mid-week and Friday. And it is the only city where younger workers seem to come in more than their senior counterparts.
London’s hybrid working ‘new normal’ may be less office-based than its global competitors
Could the hybrid working we see today be the ‘new normal’ in London from now on? The slowing return to the office in London seems to suggest so. According to TfL data for central London tube stations, 90 per cent of the morning rush hour commuting recovery since 2020 to date had happened by spring last year. And most central London employers see current working patterns here to stay.
But mismatches in London and comparator cities suggest there is in fact more room for manoeuvre. Current mandates seem loosely enforced – only Paris workers come in more than they are mandated to. And more than half of employers in Toronto and Sydney were worried about staff quitting from tightening office-working mandates, despite less than one in ten workers saying they would do so.
If these existing mismatches were resolved, pre-pandemic working patterns could be closer in most cities than many might think, with office attendance over 90 per cent of pre-pandemic levels (Figure 2). But London is the clear exception here. Its future return to the office could fizzle out at least half a day below its international competitors.
Figure 2: London’s return to the office could stall well below pre-pandemic levels, standing out from other cities
https://flo.uri.sh/visualisation/19226203/embed?auto=1
The attitudes that could sustain a ‘new normal’ close to current patterns in London may not hold. When asked to think about the impact of home working today, concerns about productivity are small. However, when thinking about future, most employers and employees alike see negatives from home working, citing skills, promotion, and pay as the most likely casualties of not attending the office – in other words, the markers of increased productivity.
This is an important contradiction to uncover. At the very least, it raises the question on how fixed attitudes are on the benefits of home working.
This could leave London at a productivity disadvantage
Is London’s different hybrid working trajectory necessarily a bad thing? After all, there are clear benefits to home working for the employee – flexibility with time (cited by 52 per cent of workers) and avoiding the commute (42 per cent) came out top in the surveys.
But less office facetime in the city centre could put London at a productivity disadvantage relative to other global cities. This is the theory of ‘agglomeration’: knowledge-intensive firms (and their workers) benefit from the transfers of information and skills that come with being densely packed into city centres. This could be desk-based discussions, catch-ups in local cafes, even serendipitous encounters on the street – all these boost worker skills and firm productivity. And don’t just take economists’ word on this; both surveyed employers and employees recognised the learning benefits of attending their city–centre offices.
And these ‘knowledge spillovers’ tend to flow downhill – younger workers have the most to learn from the experience of their senior colleagues. If, as the data suggests for London, the banks of desks are full while the corner offices are empty, the productivity implications of London’s diverging trajectory could be amplified.
Firms and policymakers should focus on cutting commute costs and shaping attitudes to put London’s return to the office back on track
For prosperity’s sake, then, the aim should be for London’s return to the office to be at least on the trajectory of other global cities.
One way to tackle this is the commute – London workers cited avoiding travel costs as a benefit of home working more than any other city. TfL should reinstate its Off-Peak Fridays as its trial earlier this year was hampered by lack of awareness. Commuter transport investment should continue to improve connections to central London. And the formation of Great British Railways could bring with it rethinking of rail fares and ticketing, better reflecting the new world of office working patterns.
Both Government and firms themselves have a role to play in shaping office working attitudes, which – as seen in the contradiction between short- and long-term views on home working – are not set in stone. Mayor of London Sadiq Khan should continue to work with central London businesses and business groups to set higher expectations of days in the office. Firms themselves should be aware that workers are willing to accept higher mandates, or greater enforcement of existing ones. And business leaders should lead by example, by increasing office attendance for the benefit of their organisations and their staff.
For more analysis and recommendations, read: Return to the office: How London compares to other global cities, and why this matters.
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