Working from Home in the Age of COVID-19
Robert Abbott, D.O., 9/2020
In adapting to the COVID-19 pandemic companies have implemented decentralized and virtual workplaces to allow working from home. An understanding of the effects of remote work can inform business leaders’ decisions in both the setting of lockdowns as well as a future post-COVID-19 world. Fortunately empiric evidence supports the notion that the pandemic may spur workplace restructuring that is ultimately beneficial. A widespread adoption of remote work strategies would likely be well received by workers. A pre-COVID-19 survey of 1202 workers found that 81% wanted to or may want to work from home (Owllabs). Furthermore, an estimated 56% of workers could perform part of their work from home (Global Workplace Analytics). Management has traditionally been skeptical of such given that an occupied desk is at least one metric of worker productivity. However according to research conducted by Gartner inc., “a survey of 317 CFOs and Finance leaders on March 30, 2020 revealed that 74% will move at least 5% of their previously on-site workforce to permanently remote positions post-COVID 19” (Gartner inc.). The pandemic and the ensuing lockdowns may have driven workers’ and managers’ values into alignment allowing for a lasting workplace restructuring impacting myriad industries.
When productivity is not a function of colleagues’ physical proximity then working from home becomes feasible. Globalization, computerization, and virtualization provide impetus to the adoption of working from home by spurring workplace decentralization. Globalization has led to ongoing decentralization that largely started in the 1990’s due to technological advances (Mehta). In 2010 multinational companies with US operations employed 28.1 million Americans, produced 23% of all private sector output, and were responsible for 42% of private sector capital investment (Slaughter). Collaborative work is able to cross geographic boundaries because its increasingly computerized nature enables remote operations. More than half of all US jobs required some level of technology skills in 2012; this was forecasted to increase to 77% in 2020 according to the U.S. Bureau of Labor Statistics (Mason). Virtualization of the workplace, in which work and communication is performed using dedicated software, has further cemented these trends. According to Spiceworks research, “server virtualization is ubiquitous, used by 92% of businesses… application virtualization [is used by] 39%, and virtual desktop infrastructure technology [is used by] 32%” (Spiceworks).
The benefits of working from home can be attributed to increased productivity, employee retention, and worker well being, as well as decreased costs, environmental externalities, and infectious disease transmission. Productivity, which is of central interest to business leaders, has been the focus of numerous studies. A study of a 16000 employee Chinese call center found that working from home boosted productivity by a total of 13%--9% due to longer hours worked and 4% due to increased call frequency (Bloom). Notably, workers felt that opportunities for promotion were diminished. However employee retention was found to double over the study period. A Harvard Business School study of the United States Patent and Trademark Office found that productivity increased by 4.4% following the adoption of a “work from anywhere” strategy (Choudhury). In 2008 IBM had 330,000 employees of which almost half worked from home or other sites. These workers were documented as having higher retention and 10-20% higher productivity (Ruth). One year following the adoption of working from home Alpine Access Remote Agents had closed 30% more deals, decreased turnover by 88%, and decreased customer complaints by 90% compared to the year prior (Global Workplace Analytics).
This increased productivity does not come at the cost of worker well being. Shorter commutes are associated with increased contentment, provided that access to satisfactory housing and employment aren’t compromised (Clark). An analysis of 63 studies on the wellbeing of employees who work from home found that remote workers had increased positive emotions, reduced emotional depletion, increased job satisfaction, increased workplace loyalty, and increased autonomy compared to onsite workers. However they also experienced increased isolation and a subjective belief that promotion would be harder to achieve (Charalampous).
Both employees and managers can realize cost savings by pursuing and adopting work from home. Managers are able to save on the physical capital required to establish and maintain office spaces when they maintain workers at home. For each full time employee an estimated $10,000 may be saved per year (Global Workplace Analytics). Employees who work from home may also realize savings through decreased spending on gasoline, car maintenance, professional clothing, dry cleaning, lunch, and coffee, and by pursuing tax breaks (Reynolds). This decreased resource consumption translates to a decrease in environmental externalities. Decreasing commuters is of central importance; one estimate for 2019 placed home workers’ daily gasoline savings at 30 million gallons per day and electricity savings at 133 billion kWh per year (Pasini). Yearly transportation related carbon emissions were estimated to have been reduced by 79 million metric tons which was roughly 1.5% of total 2019 emissions.
Working from home supports public health by decreasing the spread of infectious diseases. It has been estimated that 16% of all influenzae transmission occurs in the workplace (Edwards). To prevent the spread of COVID-19 governments have initiated quarantines, a result of which has been to decrease the productivity of centralized firms. In the second quarter of 2020 global working hours were estimated to be 10.5% lower--equivalent to losing 305 million full time jobs (International Labour Organization). Businesses have already begun adapting to these challenging circumstances. A survey of 25,000 US workers revealed that 11.8% had been furloughed or terminated. Notably 34.1% answered that they used to commute but had switched to working at home (Brynjolfsson).
There is a real possibility that this shift towards working from home will become the new status quo. Kate Lister, President of Global Workplace Analytics, has purported that, “ Our best estimate is that 25-30% of the workforce will be working-from-home multiple days a week by the end of 2021.” Although COVID-19 provided the catalyst for the widespread adoption of working from home, given its benefits for workers, companies, the environment, and public health it seems working from home is here to stay and will persist well beyond the quarantines.
Works Cited:
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