Telecommuting, remote work, hybrid work, distance work, home office, distributed workforce… Whatever it’s called, Work From Home (WFH) has surged into center stage as one of the hottest issues both in the labor market and the UK political arena. Why has the location of workers become a political issue, and what is the current state of hybrid work?
Pre-Pandemic Flexible Working Arrangements
In 2019, 5.4% of the EU workforce routinely worked from home, and another 9% occasionally did so. Working from home was more common in northern Europe. In Finland, Netherlands, and Sweden about 30% of those who could do so worked from home. But in the rest of the EU, that number was below 10%. In the UK, only about 4.7% of workers worked from home.
In the EU, the average median income of people who work from home is more than twice that of plant workers, machinists, and assemblers who have to work on-site.
Changes Brought by COVID
In many EU countries, more than half the people who started working from home during the pandemic had never done so before. Teleworking in the EU went from 5% to 40% in two years. In the UK the number of employees working exclusively from home rose from 5.7% in 2019 to 43.1% in 2020.
Post-Pandemic “Return to Work” Controversies and Initiatives
As many countries have removed restrictions and life has returned to “normal”, more and more companies are requiring workers to return to the workplace in a traditional manner, while few employees are eager to return to a traditional 9-to-5 job with a commute.
The coinciding end of the pandemic with the war in Ukraine and the increasing cost of living has made many employees reluctant to return to the workplace. Going into the office requires employees to:
- Invest time and money in commuting
- Invest time and money in work-appropriate attire
- Invest money in more expensive, less healthy worksite meals and snacks
- Formalize their schedule, with less flexibility to step away from appointments, childcare, emergencies, etc.
For employees in the UK in 2022, these costs combine to create an effective 1% pay cut to work in an office location rather than working from home.
However, employees who work in a central location generate an estimated £82 million per day for UK businesses, with economic activity in office space rental, transportation costs and fees, and small businesses like cafes, dry cleaners, and other satellite endeavours benefitting from commuters.
In fact, the issue has become increasingly political, with politicians and business leaders in the UK becoming more insistent that employees return to the traditional workplace, and anti-capitalist social networks becoming increasingly visible and insistent that workers be given more flexibility.
Many companies are using a “carrot and stick” approach to getting workers back into the office, including:
- Offering bonuses and incentives to lure employees back to the workplace
- Making onsite work a requirement of the job
- Making flexible or remote work a reward for good performance or seniority
- Cutting pay of remote workers in areas with a lower cost of living
- Offering 4-day work weeks that eliminate a day of commuting
Meanwhile, many workers distrust the motivation of companies and politicians who are requiring a return to the work site. They suspect that companies only want employees in the office in order to supervise and control them more closely, while employers often think that employees at home are slacking off. There is profound mistrust on both sides.
The Future of Hybrid Work
It seems clear that the future of work will be a “hybrid” model, where some employees are on-site some of the time, while working from home at other times. Schedule and location flexibility are the “new normal.” Some of the latest facts and stats include:
- Increase in demand. Glassdoor reports that searches for remote work opportunities jumped 460% during the pandemic, between June 2019 and June 2022.
- Here to stay. The latest Mckinsey American Opportunity Survey indicates that, in 2022, 58% of Americans now have the opportunity to work from home at least one day a week. This number is striking, because it includes a broad spectrum of “blue collar” jobs that have been considered unsuitable for remote work. Furthermore, when offered the chance for flexible work, 87% of employees take advantage of it.
- Keeping wages down. A recent study shows that the ability to work from home is so valuable to employees that it is actually keeping wages down despite the labor shortage, and is partly responsible for a 3% decline in the real average wages of Americans.
- WFH is political. A cultural debate in the UK, an economic argument in Australia, mandatory during lockdowns… remote and hybrid work is increasingly political. Americans want a formal government policy regarding working from home, while the Netherlands is about to make working from home an employee right.
Hybrid work, at the intersection of social and economic class distinctions, a focal point for both fiscal and health policy, and at the forefront of present-day technology-mediated cultural forces, remains controversial. For people who prefer traditional hierarchies and power structures, with inflexible economic models, it is being fought more and more vigorously. For small businesses and entrepreneurs who want to remain lean and nimble, remote and distributed workforces save costs on shared workspaces as well as employee wages, allowing them increased flexibility with investments and capital. For everyone in between, this is a time of change and adjustment, with all the challenges and opportunities it represents. Companies that embrace the flexibility that employees increasingly demand will benefit in the long run.