Hybrid working, a combination of work from home and in the office, has been adopted by many companies and is becoming more popular. Ms. Hoang Nguyet Minh, Director of Commercial Leasing, Savills Hanoi, stated that “..most office workers have adapted to working remotely amid the pandemic."
The pandemic created changes in people’s working habits. Savills conducted a global survey to examine the pace of transition to hybrid working. Generally, most people believe that the shift to hybrid working is not a zero-sum situation. Most workers participating in the survey want to be in the office at least some of the time, and most firms want to mandate a degree of attendance to ensure mentorship for newer and young employees, therefore boosting communication, collaboration, and productivity among their employees. However, some roles such as banking that requires the traditional for oversight and scrutiny, which can only take place in an office environment.
Asian cities see a slower shift to hybrid working
Savills Hybrid Working Index shows that Los Angeles, Marid and London had the fastest transition to hybrid working, while Shanghai and Ho Chi Minh City are the slowest factors considered include the size of homes, population composition, ease of commuting, broadband connectivity and length of lockdown.
Larger homes make it easier to provide dedicated space for homeworking. Locations such as Dubai and Los Angeles score highly on this indicator. Younger populations, such as Gen-Z, or those with smaller household sizes are more likely to seek interaction and mentorship from the office environment. Therefore, a location like Mumbai, with 50% of its working age population under 35, may see a slower shift to hybrid working. Moreover, an advantage of homeworking is to avoid long commute times, which can act as an incentive for hybrid working in Los Angeles or New York, cities that have relatively long average commutes. In contrast, cities such as Lyon, Berlin and Amsterdam, where it’s easier commuting, might find the office remains the most effective place to work.
Long lockdowns in countries such as the UK, US and France mean extended periods of homeworking, requiring employees to work from home longer, and therefore form remote working habits that lead to a faster transition to hybrid working. Meanwhile, Asian cities, such as Shanghai, Ho Chi Minh City or Hanoi, had shorter lockdowns, allowing firms and employees to return to full-time office working . This partly explains the fact that Ho Chi Minh City ranked last inhybrid working adoption. Work cultures pre-pandemic also plays an important role in the shift to hybrid working. Less flexible working culture in Shanghai, Hong Kong, Tokyo and Ho Chi Minh City indicates that any transition to hybrid working will be slower. The need for office space will remain a priority of many firms in these countries.
Savills Vietnam’s Q2 office market report shows that office occupancy in Ho Chi Minh City reached 90%. In Hanoi, occupancy was also 90%. Ms. Minh shared: “New office buildings in Hanoi, including Capital Place, Leadvisors Tower, Thaiholdings Tower and Century Tower, achieved good rental growth to average $33/sqm. Large tenants with long-term business strategies are planning on expanding their offices”.
New requirements for firms
In Paris, London or Berlin, factors such as high office costs, low office densities, short leasing time and already flexible working practices, can further motivate businesses to shift to hybrid working.
Pre pandemic office design focused on the efficient use of space with higher worker density. However, companies now focus on a more flexible and people-centric office design, creating space for interaction and collaboration, Ms. Minh emphasized: “Flexible office already exists for many businesses in Hanoi, that are increasingly catering to their Gen Z workforces that need mentorship and interaction. Firms also pay more attention to the office’s workspace density to better suit needs.”
Corporates need to be aware of risks ofhybrid working. Team culture can be eroded if people do not have the opportunity to come together.