Some employers plan to make hybrid work arrangement permanent; office spaces still in demand, Business News & Top Stories
SINGAPORE – Some employers plan to make hybrid work arrangements permanent even when Covid-19 restrictions are eased in the future, but this has not led to a spike in office space vacancies.
Six companies that The Straits Times spoke to said many of their employees have indicated a preference for a flexible working policy.
Working from home remains the default in the coming weeks, even as Singapore gradually loosened Covid-19 curbs that were imposed last month.
At the Covid-19 multi-ministry task force press conference on June 10, Minister of Trade and Industry Gan Kim Yong urged employers to exercise flexibility in their employees’ work arrangements, even if work from home is no longer the default.
At technology company Cisco, nine in 10 staff across its Asia-Pacific offices said they favoured a combination of office-based and remote work in a survey last September.
“Over the past year, employees have grown accustomed to and even prefer a hybrid model. They appreciate the flexibility that working from home offers, although some do miss face-to face interactions and the informal chats that happen in an office setting,” said Cisco Singapore managing director Andy Lee.
Around 90 per cent of the company’s workforce of 1,000 staff based in Singapore is currently working from home.
A DBS Bank spokesman said a hybrid working model has been made permanent, with all employees given the flexibility to work remotely up to 40 per cent of the time.
In April, the bank announced its plans to cut its office space across its market by 20 per cent in the next four to five years.
Other companies interviewed are holding on to office spaces, as many say they see value in having a physical space for staff to meet to foster closer bonds and better collaboration.
Mr Lee Chee Meng, co-chief operating officer of on-demand delivery platform Pickupp Singapore, said the company was previously operating out of a co-working space, but had moved to a bigger office as it expanded its headcount by 30 per cent since last year.
The majority of its office-based staff is now working from home, and weekly virtual meetings and regular team building activities on video calls have helped to maintain good team rapport, Mr Lee said.
Several major office building owners and co-working spaces said they are continuing to see healthy demand, with little to no drop in occupancy rates.
Mr Kong Wan Long, co-founder and chief commercial officer of co-working space JustCo, said the recent Covid-19 curbs did not affect its business as the measures were understood to be temporary.
“Work from home cannot be the permanent solution. Our customers value co-working’s flexible model, which is precisely what businesses need in today’s volatile environment,” he said, noting that occupancy rates across its 17 centres are approximately 80 to 90 per cent. Three more centres are opening soon.
A spokesman for co-working space WeWork said it is set to launch a on-demand service at the end of this month, which allows individuals to book workspaces or conference rooms by the hour or day.
There is also demand for office buildings located in the central business district (CBD).
CapitaLand Integrated Commercial Trust said its office buildings registered a occupancy rate of 94.8 per cent as at March 31, in its first-quarter report released in April.
It owns several buildings in the CBD, including The Work Project in Capital Tower, CapitaGreen and Asia Square Tower 2 that offers flexible spaces to its tenants.
A Keppel Reit spokesman said its average office rent in Singapore in the first quarter of this year was $10.64 per square foot per month (psf pm), which was above the average expiring rents for both 2021 and 2022.
The occupancy rate in its office buildings in Singapore, Australia and South Korea is around 96.5 per cent with an average lease of 6.7 years, he said. It includes Marina Bay Financial Centre and One Raffles Quay, among others.
The shift towards adopting a hybrid working model is evident even in companies where some staff are unable to work from home.
At medical technology firm Siemens Healthineers, around 35 per cent of its 250 employees have to work on-site, while the rest can work from home.
Before working from home was the default, staff who wished to return to the office could pre-book their workspaces via an app, said the company’s head of human resources in South-east Asia Alex Mersch.
“Our employees have the choice to work in a flexible manner in a conducive environment of their choice, even after the pandemic,” he said.