Is location still important for creative industries?

As we enter the first week of non-enforced WFH and the discussion turns to returning to WFTO some people are rightly calling out 'Why?' 5% of UK workers do it from home already and with better broadband this is likely to increase. Only last week Jack Dorsey, CEO of Twitter announced that his staff could WFH indefinitely.

But the 'Office' has been a defining part of modern culture, people spend more time awake in it than at home. Before social media it was the office water cooler conversations that drove cultural exchange. The hospitality industry is heavily positioned around these locations, further reducing the amount of time at home. But is this a construct of the past not the future?

It’s perhaps not surprising that creative industries put their offices in cultural centres, a trendy place that encouraged collaboration and explored modern ways of working together. Something now taken on by many of the tech companies as anyone who has been on a tour of the Google campus will testify.

It has also long been seen as a mark of agency virility to have some swanky office in a cool [expensive, or soon to be awfully expensive] part of town. But its worth asking ourselves what are these offices for and what does an agency need and consequently is an increasingly cramped office in an expensive location really needed in a post pandemic, tech enabled world?

Not surprisingly some agency bosses are already looking to significantly reduce their property costs and reinvest that money in talent, some are sadly just looking at changing the nature of the office environment to reduce space [cost] per head.

But beware, so are an awful lot of other human asset based service companies. The laws of supply and demand will kick in. If we are facing a permanent change in overall office demand [50% of office workers would like to work more at home] then we will have a glut of empty space and rents will have to fall. We can already see the impact of this in the City of London with large volumes of space coming on stream when financial services reduce demand as Brexit becomes a reality. It’s fair to assume the IPG deal on moving McCann Worldgroup to Bishopsgate was an exceptionally good deal to do.

So rather than look just at cost, lets start from what type of space an agency needs and where should it be. The benchmark for talents expectation is probably the FANGS and associated travellers. They see space as enabling exchange of ideas- essentially an emporium of creation. So, for some agency leaders who think changing work practises means removing those ‘nice to have’ areas, think again.

An interesting example of this is spaces like 'We Work' [don’t get me started on their business model]. What attracts creative businesses is the atmosphere, buzz, social spaces, and opportunities to exchange/utilise other skills. A design agency I’m lucky to work with wanted their own offices but moved temporarily into one of these shared environments and loved it so much they stayed. One social benefit was the feeling of safety the staff had when working alone. One financial benefit was being in a social location they wanted without the sole cost of the social space.

Let us also not underestimate the need to go somewhere else to protect your home relationship. Although email and social media have eroded our personal space and blurred it with the office [so much so that in some countries there are now legal limitations on when you can send an email to an employee] we still need to separate work and home. Especially when home is small and cramped and without childcare. WFH all sounds good now, cue middle class management nodding approval, but let us see what the divorce partner stress rate is in 6 months’ time!

Humans are naturally social animals and that’s what helps drive cultural growth and new experiences - location is key to enabling this. Creative industries need a geographical hub to feed off each other and stimulate growth. But does this mean an agency has to be in an expensive central urban location? Probably yes. The exception is the reverse commute so many clients now use, where you live is the creative location not where you work, as do scale content producers like Google or say Pinewood Studios.

We hear a lot about work life balance and this pandemic will have made that more real for many n our industry. Better balance improves health and wellbeing and improves their output. It's not, probably never has been, a binary choice between two locations. Technology now enables us to do so much more in so many ways so its perhaps time to rethink the meaning of 'Office'.

Does it mean they need the same amount of space? almost certainly not. But equally almost certainly more than the finance directors are thinking about. It’s probably more about a different type or mix of space than just less of the old space. Space that helps imagination and is less like a factory. In fact, in the short term many agencies probably cannot socially distance their staff because they have already crammed them into such small spaces to make the overheads workable.

So, location and space are important for cultural reasons. Don’t underestimate the need for the second location in your employees lives, don’t underestimate the need for cultural cohesion to keep your brand strong and don’t ever underestimate the need to change the space to create something people want to come [back] to rather than have to.

Julian is a fellow of the IPA and has spent 30 years in and around our industry. He is now a consultant on marketing services with a focus on branding, agency relationships and business culture.