• Commercial property
  • February 25, 2022

Rightsizing Your Workspace

With Coronavirus restrictions (possibly) ending this summer, including the ‘work from home if you can’ edict, as an employer you may feel like you are at a crossroads. Do you return to pre-Covid days of everyone coming into the office or move to a more flexible model where your team has the option of working from home (WFH) a few days a week?

According to recent data, post-Covid-19, around 40% of British employees want to continue working from home two to three days a week. For employers, this means that if they want to continue to attract and retain talent, they need to offer some sort of flexible working model. This may mean rethinking your current commercial property tenancy. In this article, we look at the legal implications of right-sizing your workspace and how you can ensure your commercial lease/s reflects the post-Covid needs of your business.

Examining your workspace needs

Once you start examining your workspace needs with a view to accommodating a mix of WFH and time in the office, you may find yourself dealing with a number of simultaneous decisions. This is because you will quickly discover there is far more to consider than merely the size of the workspace you now need. Thought must be given to:

  • How has your business model changed? If your online sales have grown, do you need to consider a mix of office and warehouse space?
  • Should you let your employees decide which days to work from home?  If so, will meetings have to be a mix of remote and face to face modes which is, to put it politely ‘challenging’ (you may wish to insert a more colourful phrase)?
  • How will you ensure that those WFH are not forgotten in terms of professional development, communication, and promotion opportunities?  

Not considering these aspects of rightsizing your workspace will result in you being on a fast-track to the Employment Tribunal battling discrimination claims.

Embarking on any right-sizing exercise provides a chance to examine what is working in your business and spot any methods or expenditure that is no longer helping your company grow.

When can you terminate your existing commercial lease?

Following a review of your workspace needs, let’s imagine that you conclude a central city office is no longer required and the best workspace solution going forward is a warehouse space and a small hub located where a majority of your employees live or find it easily commutable.

Unfortunately, you cannot simply hand back your keys and wave your landlord goodbye. To end your lease lawfully, you must check your tenancy agreement. If it contains a break clause you may be able to end your tenancy at the date specified in the lease. If your commercial lease agreement does not contain a break clause or the opportunity to exercise it has passed, you could consider assigning your lease to another party (you will need to obtain your landlord’s consent) or sub-letting.  You can also terminate your lease if your landlord agrees; therefore, it is important to approach them – they may have plans to develop the premises you are leasing and welcome the opportunity of it becoming vacant early.

A checklist for right-sizing your workspace

If you need to right-size your workspace in preparation for furlough and/or Covid restrictions ending, here are five actions you can take immediately:

  1. Conduct an audit into how your business and market sector has changed and what kind of commercial space is required to scale up in the post-Covid era.  For example, if a majority of your sales now come through your website, your commercial property investment may be better spent on warehouse/fulfilment space as opposed to retail.
  2. Find out what your employees want in terms of WFH flexibility. There is little point in investing in a best-in-class WFH offering only to find out most of your staff are counting the days until they are permitted to get back to the office.
  3. If you need to make changes to your workspace, check your existing tenancy agreement to see if and when you can end your lease.  A Commercial Property Solicitor can advise you on your options regarding assigning or subletting your existing tenancy if you are unable to end it via a break clause or through a mutual agreement with your landlord.
  4. If you plan to offer WFH on a flexible basis ensure that you undertake necessary risk assessments, especially concerning health and safety, cybersecurity, and data protection.  
  5. Once you find the right commercial property for your post-Covid workspace needs, talk with a Solicitor about negotiating a lease that provides you with enough flexibility that you can remain agile and move locations or expand if required. No one knows how the next few years are going to turn out; therefore, to protect your commercial interests, a flexible lease is essential.

Final words

Like every previous pandemic, Coronavirus has altered certain aspects of how we live and work.  The move towards more flexibility regarding WFH had begun before anyone had ever heard of Covid-19.  Lockdowns simply sped up the WFH transformation. Many SMEs also discovered that large, expensive inner-city offices are no longer required, allowing them to redirect capital into other areas of the business.

If you require any information about right sizing your business, speak to an experienced Commercial Property Solicitor who can advise you on your options.

In closing

Nothing in this article constitutes legal advice on which you should rely. The article is provided for general information purposes only. Professional legal advice should always be sought before taking any action relating to or relying on the content of this article. Our Platform Terms of Use apply to this article.

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