Remote Working Is Here to Stay, but Will It Deliver What Businesses and Workers Want?

UK Policy Prosperity

Remote Working Is Here to Stay, but Will It Deliver What Businesses and Workers Want?

Commentary
Posted on: 16th March 2021
Jeegar Kakkad
Head of Productivity and Innovation

“We need people to start working from home where they possibly can.”

16 March 2020, Prime Minister Boris Johnson

On March 16, 2020, when the Prime Minister instructed people to work from home if possible, little did he know he was unleashing a great revolution in the future of work. His hope was that, after 12 weeks of washing our hands, social distancing and remote working, the virus would have been defeated and life could get back to normal. Twelve months later, around a third of us are still working from home full time and are unlikely to go back to the office before the summer.

Both businesses and workers want remote working to persist after the pandemic is over, but for very different reasons. While it could offer up opportunities to improve wellbeing and support levelling-up, remote working could also potentially spell trouble if businesses see it as a way boost productivity by cutting costs and outsourcing jobs.

Remote working: From the exception to the rule

Prior to the pandemic, homeworking was relatively rare: Just 5% of all workers worked from home full time in 2019, with another 8% adopting a hybrid approach of working at home some days and travelling to work other days. We also know a little bit about these pioneers of homeworking: According to the ONS, they tended to be relatively older, were more likely to work in highly-skilled jobs in finance, tech or professional services, and were relatively more likely to live and work in London and the South East.

And while homeworking was rising slowly in the years in the run up to the pandemic, it naturally spiked last year. Almost overnight, 39% of us were working from home full time, with 6% working from both home and their normal workplace. Slowly, as restrictions began to ease through the summer, more people started to head back to the office. But as local lockdowns were introduced through September and October, workers retreated back to working from home.

Figure 1 Working from home became the norm during the pandemic

Source: ONS, TBI

Post pandemic, 18% of workers want to continue working remotely fulltime while another 39% want to work from home some of the time. This massive shift in attitudes from pre-pandemic patterns is possible partly because businesses rapidly introduced remote-working technology during the first lockdown. It’s also because workers themselves value the flexibility, enjoy the better work-life balance, and want to cut down on commuting.

Overall, 14% of businesses expect to continue with increased homeworking post-pandemic, while 67% say they are unlikely to use increased homeworking. Unsurprisingly, the tech sector and professional services are more likely to want to persist with remote working once restrictions ease: their employees were more likely to work from home prior to the crisis and it makes sense these sectors are relatively more interested expanding remote working

Figure 2 Remote working will persist, especially in the ICT and professional services sectors

Source: ONS, TBI

 

For business, any pre-pandemic resistance to homeworking has shifted. Having put in place the digital infrastructure to make remote working possible, they see a variety of potential benefits from continuing, to some degree, with homeworking including the following:

  • The desire to cut overheads.  According to ONS, 58% of business will continue with increased homeworking in order to cut overheads, including the cost of expensive office space. In London, there is currently over 6 million square feet of vacant sublet office space – twice the pre-pandemic level – most of which is likely to remain empty. Across the UK, 75% of mid-sized companies are looking to reduce their physical footprint. In addition, the total amount of office space under construction in Manchester, Birmingham, Leeds and Belfast has fallen by 17%. What office space is left, businesses are redesigning to foster greater collaboration and social interaction.

 

  • Getting more from their staff. Even though productivity and wellbeing have flagged during the pandemic, firms believe that remote working has the potential to be better for workers’ wellbeing and will help boost productivity in the long run. Once strict lockdown measures end, the factors weighing on remote workers’ productivity and wellbeing may begin to ease, and both businesses and workers will reap the benefits.

 

Figure 3 Businesses see remote working as way to cut costs and improve wellbeing

Source: ONS, TBI

 

 

The contours of the future of work are increasingly becoming clear: people will work from home when they need to get stuff done or need the flexibility, and will come into the office for collaboration and camaraderie. What’s less clear is the tipping point when businesses’ drive to improve productivity by cutting costs leads to greater precarity for remote workers.

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