Returning to the office after Omicron: what past trends tell us about the future of work

UK Policy Prosperity

Returning to the office after Omicron: what past trends tell us about the future of work

Commentary
Posted on: 26th January 2022
By Multiple Authors
David Britto
Researcher
Jeegar Kakkad
Head of Productivity and Innovation

With most of the adult population triple-vaccinated and the work-from-home guidance lifted in England, 2022 offers the potential for relatively more stable working patterns than the country has experienced over the past two years of the pandemic.

The degree and pace with which workers return to their workplace will have significant economic and policy consequences. How will the evolution of remote and hybrid working patterns affect spending patterns in city-centres and local communities? How and when should businesses adapt both their physical footprint as well as their management practices? Can the financing of public transportation and the railways sustainably adapt to changing commuting patterns?

Looking back at past periods of returning to the workplace can actually give us a guide about what we can expect over the coming months.

Where have we come from?

Despite a widespread narrative that hybrid working became the new normal during 2021, survey data from the Office of National Statistics suggests that a large degree of workplace renormalisation in fact took place after the spring unlocking. By a margin of more than 4:1, workers who exited homeworking elected to return to worksites full-time rather than work hybrid. As the chart below shows, on-site working rose from about 35% of the workforce to about 55% over the course of 2021, with homeworking falling alongside. Hybrid working, accounting for about 10% of the workers before the pandemic, rose to only about 18%, peaking in the autumn of last year.

Figure 1: Proportion of workforce working from home, hybrid or on-site over time

Source: Office of National Statistics Opinions and Lifestyle Survey, based on a randomly selected sample of adults in Great Britain self-reporting their work status.

Note: Data on the percentage of adults self-reporting as furloughed was not collected from October onwards. Results are reported as among those adults in the survey who indicated they were working in the past seven days prior to answering the survey.

Underneath these trends, however, there was a clear sectoral pattern to when workers decided to return to their workplace.

  • Late February to April 2021 – Proximity and key industries: workers in core roles in the health sector, goods manufacturing and transportation largely continued on-site working as normal throughout the 2021 lockdown. Employees made little use of furlough and there was minimal reversion to on-site working as the economy reopened from February onwards.
  • April to July 2021 – Non-essential services sectors: more than 60% workers in industries such as food and accommodation, and entertainment and leisure, went on furlough during the January lockdown. By the time of the reopening in July 2021, more than five-sixths of these workers had returned to on-site working.
  • July to November 2021 – Professional services: Unlike in other industries, workers in professional services, for instance those in the technology, legal and accounting industries, transitioned to homeworking with relative ease. More than half of these employees worked at home during the January 2021 lockdown, with about 20-25% continuing to do so after July 2021, and another 30% electing to work hybrid. Throughout the autumn of 2021, there was a gradual movement away from full homeworking to a temporary equilibrium of hybrid.

Overall, the impact of Omicron on working patterns has been relatively concentrated. When the work from home guidance was introduced in mid-December 2021, the proportion of people working only on-site dropped by about 5 percentage points. The biggest impact was on hybrid workers with about a 10-percentage point drop in hybrid working and a similar rise in home working across all workers, essentially taking the country back to working patterns last seen in September 2021. Delving into the industry-specific data, the main driver of this trend appears to have been professional, office-based workers exiting hybrid working and returning to homeworking – temporarily reversing the last of the three trends listed above.

Figure 2: Changes in employee work patterns due to Omicron work-from-home guidance

Source: Office of National Statistics Business Insights and Conditions survey, based on a weighted sample of voluntary business responses. Periods covered: 1 to 14 November 2021 and 13 to 26 December 2021 (post the Omicron work-from-guidance, latest period available).

Note: Results by business count are weighted by the employment size of each business, meaning figures provide an indirect estimate of total employee workforce trends. The following SIC-2007 sectors are excluded from the survey: agriculture, forestry and fishing; electricity, gas, steam and air conditioning supply; financial and insurance activities; public administration, defence and compulsory social security; self-employed households.

Survey question posed: “In the last two weeks, roughly what proportion of your enterprise's workforce were [working from a designated workspace / using a hybrid model of work / working from home, etc.]"

Where do we go from here?

Based on last year’s trend, we should expect a rebound in hybrid working among professionals over the next few weeks and months, as workers in this sector return to pre-Omicron, autumn working patterns. Looking beyond the next 3 months, surveys asking businesses about their long-term plans suggests that hybrid and remote working among professionals may be set to stay at least for the coming year, however.

Figure 3: Percentage of businesses intending to use homeworking permanently

Source: Office of National Statistics Business Insights and Conditions survey, period covered 27 December 2021 to 9 January 2022.

Note: Results by business count are weighted by the employment size of each business, meaning figures provide an indirect estimate of total employee workforce trends.

Survey question posed: “Is your business using, or intending to use increased homeworking as a permanent business model going forward?”

 Across professional services sectors, more than 30% of businesses indicate that they intend to use homeworking as part of their permanent business model, with over 20% of these businesses indicating that they expect the majority of their employees continuing to work remotely. These figures suggest, therefore, that pre-Omicron work patterns may be about as ‘normal’ as things will get, at least for the medium-term. As we previously discussed in our report on Anywhere Jobs, professional services workers enjoy the flexibility, and businesses are willing to persist with remote working because of the perceived productivity and wellbeing benefits, as well as the ability to recruit from a wider geography (whether in the UK or internationally).

Consequently, 2021 may prove less of a staging post when workers and businesses adjusted to the ebb and flow of the pandemic, but rather a relatively more durable shift in ways of working with significant implications for city-centre economies dependent on office workers. Policymakers need respond to the economic consequences of these shifts, for example by rethinking funding and pricing models for public transportation, or revitalising town and city centres to prevent economic scarring.

Workers and businesses are already creating a new normal and politicians hoping for a “swift return” to the office need to quickly catch-up to the future of work.

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