Partially occupied offices are becoming a significant concern for business owners as the hybrid work model gains traction in South Africa, says short-term insurer Santam.
Working from home became a necessity during the height of the Covid-19 lockdowns. Since then, businesses have induced employees to return to the office. Yet, according to a BrandMapp survey, last year 54% of “mid-market and up” South Africans were either following a hybrid work model or working permanently from home.
The BrandMapp survey, which polled 35 000 respondents representing 13 million adults in households earning more than R10 000 a month, reflects the taxpaying base of South Africa’s mid-to-upper-income-earners.
“It turns out that hybrid work is surprisingly sticky among South African mid-to-top-end earners,” said Brandon de Kock, BrandMapp’s director of Storytelling.
Traditionally, working from home was a privilege reserved for the self-employed. But the pandemic changed that, enabling many more people to experience remote work, and a significant number of them have embraced it.
BrandMapp first observed this work-from-home trend in 2022, finding that 56% of employed adults were either permanently working from home or splitting their time between home and the office. A year later, little had changed – only 47% of employees returned to the office full time, while 54% continue with hybrid or full-time remote work.
De Kock said: “Given the strong urging for workers to get back to the office, it’s significant that BrandMapp 2023 has revealed barely any change in hybrid work in South Africa.”
This shift affects everything from workplace dynamics to transit patterns, shopping habits, and even social behaviour.
Santam’s chief underwriting officer, Thabo Twalo, says business owners need to be aware of the risks associated with partially occupied offices.
For example, a partially occupied office reduces the likelihood of employees detecting a fire early, and the fire could have resulted from allowing maintenance to slip because hybrid work makes it seem less necessary.
In addition to fire risks, Twalo notes the challenges of maintaining policy compliance in a shifting work environment. Stressed staff and tight cash flow can make it difficult for business owners to keep up with essential maintenance and security tasks. However, failing to meet insurance policy requirements could jeopardise claims in the event of an incident.
Twalo also emphasises the importance of adapting to new and emerging risks, such as cyber threats and extreme weather events. He advises business owners to reassess their risk profiles, considering the impact of remote work and partially occupied offices on their operations.
“Intermediaries play a vital role in advising clients on new emerging risks and can also assist with reviewing policies to align with changing circumstances,” he says.
Another critical aspect of risk management is understanding the risk profiles of business partners and supply chains. Twalo advises business owners to ensure their partners are adequately protected and to develop contingency plans in case of disruptions.
“Every business owner needs to be a risk manager – prevention is always better than cure,” he says.
To help mitigate risks in partially occupied offices, Santam offers several practical tips:
- Ensure that equipment, such as fire-fighting equipment and plant and machinery, is regularly maintained and serviced.
- Alarms need to be tested, function properly and be activated when needed.
- Ensure sprinkler systems have been inspected and certificates issued.
- Obtain gas compliance certificates if due.
- Ensure electrics are in good order – these are the most common ignition sources of fire. Should there be any doubt, get an external contractor to conduct thermographic infrared imaging of the electrics of the building.
- Ensure all the certificates of compliance are in order and safely stored should anything happen at the premises.
- Ensure your fire teams are in place and arrange firefighting training for new staff from an accredited provider.
- Ensure your insurance policies are up to date. Work with an intermediary who can advise you appropriately, particularly where your risk circumstances have changed – for example, if vehicles are driven less frequently.
Twalo emphasises the importance of working closely with an intermediary who can provide expert guidance, particularly as the risk landscape continues to evolve.
He concludes with a reminder of the importance of frequent policy reviews.
“A large part of any business owner’s risk management function is to disclose all pertinent changes to your intermediary. Doing so opens the door for the intermediary to notify the insurer accordingly, which helps to avoid situations of cover shortfall,” he says.
“While most businesses tend to renew and review their policies every 12 months, the pace of change has escalated in the last four years, making it clear that a more regular review of policies is paramount. Your intermediary is there to assist you through the process.”
