With the Government’s announcement to scrap work from home guidance, many will expect to see a wave of businesses returning to their offices. However, new findings suggest small businesses in the UK look set to stick with home offices in the long term, spurred on by substantial savings each month.
Research from Hitachi Capital Business Finance found that small businesses (with fewer than 50 employees) were more likely to be choosing to work entirely from home over hybrid working well into next year, with the average savings gained by not having an office being £3,860 each month – the equivalent of over £46k a year.
The survey of more than 1,000 small business owners in the UK found 27% of small businesses had plans to continue working entirely from home until at least April next year, while 23% were planning hybrid working. For businesses with fewer than 10 employees (consisting of around 96% of all businesses in the UK*) this figure rose to 40% with just 16% considering hybrid working.
Savings a considerable incentive
While the case for a return to office desks continues to be made from promotion prospects to presenteeism, small businesses owners are increasingly aware of the potential savings to be made.
By working from home, the research found the average amount small businesses were saving on core costs and overheads was £3,860 each month.
This was comprised of:
|Rent and rates||£ 2,279|
|Travel and expenses||£ 240|
|Office supplies||£ 91|
|Staff and client entertainment||£ 162|
|Training and development||£ 928|
Taking control of finances
Asking respondents about their plans for the money that they had saved, the results showed that the vast majority (86%) intended to reinvest the money back into the business. Taking better control their finances was the top priority with a quarter (23%) planning to put the money into reserves for savings, and a further 19% planning to pay off debts.
After this, new software (23%) and equipment (20%) featured as priorities and businesses continuing to work from home more permanently. Just under one in five (19%) planned to use the money to hire new staff.
A large proportion planned to pass on their savings to others: around one six (18%) were planning a staff bonus; 15% intended to use the money to pay dividends; while one in 12 (6%) were planning corporate social responsibility donations.
Other factors in the decision to continue working from home
Age played a considerable role in the likelihood of a boss deciding whether or not to continue working from home over hybrid working. Bosses over 55 were twice as likely to be considering home-based working than hybrid (34% home versus 17% hybrid), while the opposite was true for bosses under 35 (31% hybrid versus 18% home).
Similarly, bosses in households without children were twice as likely to be planning home-based working over hybrid (26% versus 12%), while those with children twice as likely to be planning hybrid (33% hybrid versus 18% home).
Joanna Morris, Head of Marketing and Insight at Hitachi Capital Business Finance comments:
“As the worst of the pandemic hopefully begins to fade, and the option of returning to a fixed workplace is put back on the table once again, we might expect to see most taking up this option and returning to ‘normal’. However, this research reminds us that it may not be the perfect solution for everyone. As with every business decision that owners make – particularly over the past 18 months – a range of factors need to be taken into consideration first, with the bottom line understandably often given a heavier weighting. The one positive that has come from this particularly challenging period has been the requirement to be far more flexible and open minded than ever before, with changes to the business that will reap benefits in the long term.”
“As the dust of the global pandemic begins to settle and the bigger picture becomes clearer, business leaders are assessing what is right for their business, their staff and their customers. The individual needs of a specific organisation, and their points of differences, have been exaggerated during the last 18 months, and will continue to be so throughout this period of change. Hitachi Capital Business Finance is based on understanding these differences and providing unique solutions that are right for each business.”
*BEIS, Business Population Estimates, 2020 https://researchbriefings.files.parliament.uk/documents/SN06152/SN06152.pdf