Building Resilience in the Built Environment

In this weeks instalment of the Building Resilience in the Built Environment series at Magenta, we spoke with Rachel Houghton, the managing director of Business Moves Group. She offers her thoughts on the 2008 recession from the perspective of the relocation and movers industry and how to tackle today’s challenges in the sector.

Tell me what happened to the built environment sector in 2008, and what, if any, parallels are there to today’s recession?  

The first recession happened two weeks after I took over as MD at Business Moves Group (BMG). It was a steep learning curve! Looking back, though, it wasn’t the recession that impacted the moves sector, it was the run up to it. We saw it last summer with the tumultuous political landscape and an unprecedented number of personnel changes at Number 10. Things slowed down.

The same happened with covid. Suddenly, projects were cancelled or postponed until there was clarity around lockdowns and organisations knew what we were dealing with. When there is an unknown, the private sector tends to hold off on committing to change projects. Once the gravel comes down – once it’s confirmed there’s a lockdown, or a recession, and once we get some steer as to the time window involved – then businesses can start re-evaluating their workplace needs. Decision paralysis is what causes the most damage. Once decisions start being made, the world can start spinning again.

In 2008, there was a long period of, well, not a lot happening. In the aftermath of Lehman Brothers going down, other companies started making decisions about what they were going to do with regards to their real estate portfolios. Back then, the focus was on consolidating estates. The financial sector was under huge scrutiny and there was a big push for PPI, meaning large project teams and call handling centres had to be created. Some of the BMG team was tasked with supporting of works to help organisations manage rapid change, consolidation, furniture management and IT roll outs.

This transformed our furniture management service and accelerated our change management and project management communications programmes. With mass redundancies, and en masse building closures, it was important for our clients to do the right thing for communities, the environment and their staff. So, we responded to that need to protect our clients’ reputations and offered a solution to the problem. Crises like this can offer an equal measure of opportunities and challenges. 

What do you think will happen this time around? 

Change projects are still in full swing following the return to the office. Organisations are investing in their environments to ensure they are offering best in class facilities. The introduction of ESG policies has further evolved with good furniture management being a top priority amongst our clients. I imagine our part of the built environment will see some lulls in activity as the return to work projects are completed, a hive of activity as the economy grows and then a return to normal levels once the economy stabilises, and a lull as we start to climb out of recession, mirroring what happened last time.

Although, unlike last time, most of our clients are still allowing and accommodating homeworking on a large scale. That will mix it up a bit. This ever-evolving landscape proves there’s always a bigger picture to consider when a new crisis rears its head. The firms that survived the first financial crisis were the ones that could look at the big picture and offer a diversity of services designed to help their clients fulfil their vision and safely reach the destination of wherever it was they wanted and needed to go. Back in 2008, that meant being fluid and flexible. Fourteen years later and we’ll adopt the exact same approach.

How else can firms in the built environment offer value this recession? 

Value comes from being agile and working as a tight-knit team to ensure there’s a real understanding of industry challenges, not to mention a timely and emotionally intelligent level of responsiveness to clients. I think clients like the familiarity that comes with working with a partner that truly gets them, and cares. On top of all that, it’s about adapting quickly, being innovative and having a can do attitude. Ultimately, though, those firms with an eagerness and a willingness to change the shape of what good looks like – including how they look after their people – will be the ones to deliver more innovation and value. 

Talking about people. The Living Wage has increased. Even the firms that commit to are questioning the financial sustainability. In recession, do you think it’s likely the end user will push social value over cutting costs? 

Most of the organisations we work with are big promoters of the Real Living Wage and it’s clearly important to a lot of businesses. The built environment is known for long term framework agreements with fixed rates over a period of years. This gives a certain amount of clarity and allows for financial forecasting. What would be helpful is if the government could issue a calendar of forecasted Living Wage increases – with information about when those increases will happen, and what those increases might look like, in line with the budget – as that will make it easier to plan, and to cost up contracts.

I know it’s not as easy as that, especially with all these unforeseen circumstances, but when they just increase the Living Wage with little warning it makes it very difficult, and it’s hard to sustain that, especially in a climate like this one. That all said, organisations have to show they appreciate and value their employees, and that involves paying a fair wage, so they work to live, not the other way around. If you disregard the needs of your employees, they will leave. And it will cost you more to re-recruit. So, I guess the question is, can you afford not to offer competitive pay, benefits and working conditions? 

Environmental sustainability is a hot topic. More firms in the built environment are committing to the cause. Going ‘green’ can be costly; investment is required and although ROI will be reaped in return, it takes time. Do you think the recession could curb or accelerate progress? 

I don’t think recession will impact the desire of organisations to drive down their carbon footprint. We’re not seeing any signs of organisations asking us or expecting us to cut corners on that front – not that we would. I really don’t think that will happen. It may not accelerate plans, but it won’t stop those goals being in place because of the cost of reputational damage if those plans are curbed. Cutting corners to save money will have an adverse effect for their ability to trade in future. 

What do you think will happen to workplace strategies? 

The last time we saw this level of change in workplace was in the 90s and 00s – back when we saw a move from nicotine-stained desk dividers to open plan and agile environments. The last recession prompted new ways of working. We saw the introduction of VOIP and shared filing system; there was a proliferation of smart phones; and people could work in a more agile way. Now, twenty years on, we’re seeing a similar pace of evolution. The pace of transformation won’t change anytime soon, although the end picture might. 

Between 2005 and 2019, it was all about investing in new furniture, new desktop IT, flatscreens, monitors, laptops, and telephony solutions. These shiny new things were supposed to double up as a bargaining tool to get people to buy into the organisation in question. But our perceptions and expectations have changed dramatically since then. Employees expect their bosses to embrace ESG and invest as much in delivering social value and environmental sustainability as in the physical workplace and virtual infrastructures that support hybrid working. 

Then we’ve got the talent gulf to consider. Back in 2008, loads of people were out of work. Companies were up against the wall, and they had no choice but to shave headcount. Now it’s the other way round. We can’t find enough people to do the jobs that need to be filled. It’s a different set of circumstances. It’ll balance out. It always does in the end. What we need to see now is more investment into UK innovation, engineering, and manufacturing, and a stronger focus on training and skills development. That will help plug the talent gap. 

Check out our other Q&A’s from the Building Resilience series below:

Mark Tyson Q&A

Rachel Basha-Franklin Q&A

Antony Law Q&A

Andy Topp Q&A

Jo Sutherland