By the end of March 2020, the virus behind the covid-19 illness had escaped China and triggered lockdowns across the world. The International Labour Organisation estimated that 2.7 billion workers, 81% of the world’s labour force, were under restrictions. In advanced countries, where most of the 1.1 billion households and businesses with solid internet connections are found, a large minority could work from home.
Governments provided generous emergency relief for people who couldn’t work. The US Cares Act came with perverse effects. Stimulus cheques and extra jobless benefits meant millions of Americans who couldn’t perform their low-paid jobs enjoyed an income boost.
The lingering pandemic, remote working, lavish-but-temporary welfare and rebounding economies have altered work in two ways. The most obvious is the era of working five days in the office is suspended because bosses recognise many workers prefer to stay home and work well there. The biggest change to working conditions in living memory throws up issues.
Management and workers, for starters, have more to argue about when it comes to pay and conditions. What will be the hybrid mix? Will teleworkers living in cheaper areas receive the same pay as those living in expensive areas closer to offices?
Management has fresh challenges. To ensure efficiency and sustain company culture, employers must somehow integrate newcomers over Zoom, keep open the knowledge sharing that drives innovation, help younger staff learn the ‘soft skills’ absorbed in offices, and preserve the lunchtime and after-work bonding that influences morale.
Management might need to prepare for further staff demands. Remote working has prompted more companies to experiment with a four-day (32-hour) week on full five-day pay.
For workers, telework means home comforts, no commute and more flexibility (and possibly secretly undertaking more than one job). While enjoying the benefits, remote workers might want to avoid unpaid overtime, unfairly footing firm costs, being hounded all hours and being surveilled. As such, more countries might follow Portugal, which in November became the first country to legislate to protect teleworkers, passing laws to protect privacy and for work costs to be reimbursed. Even with better protections, however, home workers should note they are vulnerable to outsourcing and their salary is exposed to wider competition.
For policymakers, remote work presents two concerns. One is what the practice means for cities, especially central business districts. Commercial properties and retail in city centres might struggle if enough firms shrink or close offices. The opposite problem is that remote working has boosted housing values in the suburbs, often beyond the reach of young adults.
The other concern is what remote working might mean for inequality. If remote work becomes the default for carers, single parents and women, they could disproportionally suffer from outsourcing and pay competition. So too could the middle class with universal skills if global outsourcing becomes covid-19’s legacy for labour.
The pandemic’s second change to work goes by the name of the ‘Great Resignation’. The term is derived from two events. One is a record number of people quitting the workforce: people taking early retirement to protect their health seems to explain much of this. The other inspiration for the term is that US workers are resigning at record rates.
An interesting twist is the lower-paid seem to be reluctant to stay with, or return to, jobs they loathe that come with few holidays and benefits such as sick leave. The quest of the lower-paid to snare higher-paid jobs is creating labour shortages, kinking supply, stirring industrial unrest and driving up nominal wages. Employers may need to boost wages to hold or regain their workers. That might spell faster inflation and higher interest rates.
But the trend is more likely to be temporary. A worsening economy that loosened job security would likely disempower labour and calm resignations.
Working from home, even if the economy slowed, however, looks set in place. But longer term it will endure only if people like remote working and feel safe from outsourcing, and business thinks it boosts productivity. Remote working, thanks to technological advances and cheaper communications, was an option before the pandemic. Yet few saw any efficiency gains in its pursuit. Nor does any economic theory purport scattered staff would outperform glued ones. The OECD says teleworking is “ambiguous” for productivity due to its risks to “innovation and worker satisfaction” while some surveys show it’s harmful. It’s too soon to judge. The verdict in time will decide the future of work. Poor results and the Great Office Return might begin.
To be sure, the hybrid week could negate much of the outsourcing possibilities and the management challenges of teleworking. Many companies oppose remote work. Younger workers, who want to network, socialise and learn, seem less keen on staying home; same for the ambitious. The generation who hated remote school and university might be less keen on working from home. Remote working will probably only ever be for a minority because much, even most, work requires presence.
But for those who can telework, welcome to a productivity experiment unexpectedly triggered by lockdowns. The future of remote work depends on you working hard, your boss calculating how easy it might be to replace you for less, and the severity of the next downturn.