In the last part of this series, we looked at what could happen to the economy as a result of the Coronavirus and nation’s responses to it. In this article, we’ll take a look at work from both sides: as an employee, and as an employer. We will focus on what the possible lasting effects could be from COVID, a look in to how work could change over the medium to long term once we have established a “new normal”.
Currently, most employees who have kept full time employment are working from home. For a lot of companies, this was a completely forced shift and they weren’t prepared. Going from an office job to fully remote in under a week is generally a recipe for a lot of pain, but companies didn’t have a choice. For those companies who had some work from home policies already in place, the transition was luckily a bit smoother.
One thing should be made clear: the weeks following the lockdown with enforced work from home policies is not normal work from home. This is work from home due to a pandemic with no real planning to accommodate for it. As a result, the “new normal” work from home will look and feel a lot different than the lockdown work from home.
Fully or Partially Remote
The policies that have been put in place by companies will highlight the strengths and weaknesses of remote working. Many will be surprised by how little productivity has dropped, especially once a routine is in place. There is something to be said for in person chatting which isn’t easily replicated, but the approximation could be good enough on the whole.
As lockdown restrictions slowly ease around the world, companies will realise that a lot of work can be done not from a physical location. Work from home will become at least an equally weighted option for staff, and with some of the added benefits for the company might become the preferred way of working.
Once companies have the time to put effort into remote working, the benefits should outweigh the drawbacks for most companies.
Employees will be travelling a lot less with two immediate benefits: more time and more money. All things being equal, this benefit alone should make the work from home worthwhile.
Travel is many household’s third biggest expense after housing and food. For monthly travel, the cost in London is £160 ($200) and in New York £100 ($127). This means every month households will have more to save, invest and pay down debt. In households where more than one person commutes, these savings are multiplied.
Both of these are real, tangible differences that households will feel immediately. After having experienced these after the first few months of lockdown work from home, selling the intangible benefits of the office to the very tangible benefits to the bottom line will be difficult. Most workers would choose a slight drop in productivity to save time and money.
As a result of less travel, people will be spending more time around where they live. Smaller, locally owned and run alternatives to big chain stores will become viable once again as demand for various services increases.
A Move Away From Cities
Many people make decisions on where they live based on where they work, and as a result cities are packed and expensive. As remote working becomes more acceptable, people will make decisions on where to live on other criteria. A house, slightly outside the city with a garden, versus a one bedroom apartment on the 2nd floor, for half the price? I think a lot of people would make different decisions.
Many people could end up moving away from the cities, helping to spread economic wealth throughout other parts of the country. This would somewhat equalise housing prices, which can be good or bad but is generally the case when wealth transfer happens.
Many employers will unfortunately close down after this extended closure. Being forced to close your doors with little or no financial relief for an extended time is not feasible for many - maybe most - businesses.
One of the biggest shocks to employers has been the move to remote working. While remote working during pandemic lockdown is not remote working under normal conditions, some of the benefits will be clear to employers. One of the big benefits is less requirement for office space. This is normally a substantial cost and removing or reducing it will add significantly to the bottom line. As a result, there will be a shift to enabling more remote work for any business that can support it.
Focus on Local
If a business relies on global supply chains, they might start looking more local for items that can be fulfilled from other suppliers. There might be an increase in the number of these suppliers due to the increased focus on locality now, and this will probably continue as the Coronavirus situation slowly dissipates.
While employers might have had some risk aversion before the pandemic, they will more than likely be looking to reduce their risk to the absolutely minimum now. I would expect to see them make a move to reduce overheads, increase cash buffers and ensure good lines of credit. Terms on suppliers might also be changed to allow for better cash flow.
The “new normal” will look similar but different from where we stood before the pandemic, and will hopefully leave us with some better ways of working moving forward. Next in this series, we’ll be looking at what this all could mean for social life, travel and the role medicine might play.