Tuesday, May 26, 2020

The Coronavirus has Improved the Way We Work

The coronavirus is a turning point that has changed the way we work. Remote working was already trending before the pandemic hit. However, the number of people working from home increased from 3.6 percent to 66 percent during the pandemic. The work from home trend has been facilitated by the proliferation of technologies related to telecommuting and videoconferencing.

Working from home affords a number of benefits including reducing commuting time which decreases stress and lends itself to a better work-life balance.  It also cuts costs for both employees and companies.  Companies that support working from home can reduce the amount of physical space required for workers thereby substantially reducing their overhead. This makes sense given that commercial office spaces are highly inefficient as they are vacant more than half the time.

During the lockdown telecommuting allowed workers to stay home and videoconferencing replaced face-to-face meetings. This contributed to a host of environmental benefits including driving down climate change causing emissions. Telecommuting reduces traffic, congestion, and pollution from cars while videoconferencing decreases the emissions associated with work related air travel.

Telecommuting and teleconferencing will also slash demand for oil, the leading cause of climate change causing pollution. As explained by Erik Holm Reiso, a senior partner at Rystad: "If we learn that remote working can work people may begin to question whether we need to take long haul flights to meet people in person. This could alter whether demand for oil ever recovers to the levels we have seen in previous years."

According to Kate Lister, remote working is here to stay. Lister is one of the world's leading authorities on work-at-home strategies. She is president of Global Workplace Analytics (GWA) and her firm’s research forecasts that 25-30 percent of the workforce will work at home at least part of the time by the end of 2021. Their research suggests that 56 percent of the U.S. workforce holds a job that is compatible (at least partially) with remote work.

Gallup data from 2016 shows that 43 percent of the workforce worked at home at least some of the time. Their analysis also revealed that remote work is highly desirable to the most talented employees. A 2019 analysis from Owl Labs found that 80 percent of employees want to work from home at least some of the time.

The Gallup analysis found that working from home improves outcomes and the GWA research suggests that remote working improves both productivity and results. The research also reveals massive potential cost savings.  Each employee can save between $2,500 and $4,000 a year (working remotely half the time) and even more if they are able to move to a less expensive area and work remotely full time. The typical employer can save about $11,000 per year for every person who works remotely half of the time. GWA estimates that during the Covid-19 crisis work from home initiatives will save U.S. employers over $30 Billion dollars a day.  In addition to reduced costs working from home also provides better disaster preparedness.

The pandemic has forced us to work differently and this may contribute to permanent changes in the the way we work. Business travel can be expected to decline as big companies realize that videoconferencing is just as effective as face to face meetings. This is the view of Amy Myers Jaffe, the director of the Program on Energy Security and Climate Change at the Council on Foreign Relations. She added that she also thinks remote working may be here to stay, with some companies abandoning offices altogether. This view is shared by Prithwiraj Choudhury, an associate professor at Harvard Business School. Choudhury explained that this will give workers the freedom to work from anywhere in the world including small towns with much lower costs of living.

The cornavirus has helped to make the business case for remote working and provided proof of feasibility.  Widespread adoption would reduce both environmental impacts and costs.  According to Lister, "there is no easier, quicker, and cheaper way to reduce your carbon footprint than by reducing commuter travel." However, the driving rationale will be likely be about cost savings that do not sacrifice productivity or results.

We have already made the shift the only question that remains to be answered is whether or not this new way of doing business will stick. Early results suggest that working from home will become mainstream. As reported by CNN, major companies like Twitter, Facebook, Square, Shopify, Groupe PSA, Box, have all indicated that they are making remote working a permanent option. As explained by GWA, the cornavirus may prove to be the tipping point for remote work.

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