Today, in Financial Times, there was an article about how England’s stock of office space is falling at the fastest rate for 20 years, as new construction slows, and employers cut back on offices that remain only half full because of homeworking.

What the graph above shows, is a declining trend in how much space employers consider they need. The decline we can see here is more than 6% from 2014 to the post-pandemic world in 2022.

I would like to elaborate with what the graph doesn’t show directly. The trends and megatrends we can sense from it.

My first reaction is that, although the graph is dramatized, a decline of 6% is considerable. Secondly, it is clearly not yet stabilized. In other words, it shows that we are still in a period of change. Third; I believe that the change can be considered dramatic.

That said, we can expect further impacts on related businesses, society, and health.

Firstly, and perhaps most importantly: Digitalization. It is easy to read this graph simply as a result of pandemic. In a way this is correct, but still misleading. I strongly believe that the pandemic only has worked as a catalyst, not as the driving force behind the reaction.

The motor behind

The digital transformation process took at least a five-year leap during the pandemic years. We have seen the short-term efficiency of online meetings and people working from home. Skeptical and conservative decision makers have during the pandemic years learned and got used to new working methods.

Digital transformation is more than anything a mental process. The biggest challenge for organizations is a cultural shift to drive adoption of existing technology. The efficiency has given a taste for more digitalization, and we can predict that the speed of digital transformation will increase. The process has never been as rapid as it is today. Yet, it will never be as slow as it is today.

Construction industry

Construction and real estate are obvious business segments that the development has a direct impact on. Construction sector, in a larger perspective with all that is included and dependent on it, is a key part of the economy. Dramatic changes can have deep going consequences on both economy and society.

The graph above specifically talks about the considered need of office space. In this case considered need will likely evolve into factual changes. We can predict an increase in reconstruction projects. Present office space will be changed to smaller offices and apartments. But also, reconstruction works of living spaces take place. Garages and guestrooms are converted to offices. On short- to midterm, we can also predict a continued slowing of the construction sector.

We can sense two opposing trends – a negative slowdown of construction and a positive increase of reconstruction. Mixing these should boil down to an upswing for smaller construction companies. The logic behind this conclusion is that smaller firms can undertake smaller reconstruction jobs, while bigger enterprises either are not interested or prices themselves out of the competition.

Politics

The construction sector is labor-intensive. Changes in this sector always has and impact on the social and political landscape. A slowdown, and consequently increased unemployment leads traditionally to a political shift leftwards. Today’s political map is more complicated due to the rise of far rights and nationalist. The earlier logic of “leftwing works for a more even distribution of wealth while rightwing works for a higher degree of individual responsibility” still works, but now with a modification. The nationalists, “make x-land great again”, have often chosen to position themselves far to the right on the left-right scale. Especially in countries with strong block politics this create problems in the voting logic. E.g., whom should you vote for if you would like to see more even distribution of wealth, but still would like to see a more restricted immigration policy?

For many construction workers this is a dilemma. Should I vote for better economical terms for myself, or do I believe that it is the immigrants that drive down my salary and steal my job?

Either way, the risk for that a slowdown of construction can fuel a further splitting rather than healing societies is there.

Statistics

Although some statistics are available, it may still be early days for conclusions about how remote working will affect our health. Statistics suggest that people are happy about more flexibility, better balance between work and life, higher efficiency, and more focus on worker wellbeing. At the same time, works related stress, feeling of loneliness and anxiety seem to be on higher level than before pandemic.

While the share of fully remote workers has dropped from 41.7% to 26.7% between 2020 and 2021, hybrid work is thriving. Roughly two-thirds of the U.S. workforce works from home at least part-time, and businesses expect to maintain this trend.

More than 80% of workers expect their employers to continue supporting remote work. Similarly, 85% of managers believe it will become the norm. With both employers and employees taking these assumptions, it’s a safe bet that flexible workspaces will become the norm long-term.

Health

As remote work has become more common, it’s raised awareness about employees’ mental health. Issues like loneliness seem to be more common, or at least more prominent, among remote workers, and one in five Americans experience a mental health issue each year. As home offices replace on-premise workspaces, mental wellbeing will become the leading workplace health concern.

In 2023, businesses will do more to address these issues. That could look like providing counseling or other mental health resources, improving remote communication or hosting more employee events to help build camaraderie. Workers may also start looking for mental health support benefits when job searching.

Cyber security

Another remote work trend emerging in 2022 is a growing emphasis on cybersecurity. Cybersecurity is becoming a bigger concern for businesses, with data breach costs averaging $4.24 million in 2021, more than any other year. Remote security is even more pressing, as remote work-related breaches cost $1.07 million more on average.

Cybersecurity vendors will market remote work solutions more heavily in 2022 to meet this issue. Similarly, businesses will likely spend more on things like endpoint security solutions and zero-trust cloud architecture. Of course, not every company will, which could result in massive, costly breaches for some remote companies this year.