5 research-backed reasons working from home will stick

Working from home (WFH) is here to stay. A new study suggests 20% of full work days will be completed from home in the future – compared to just 5% before the pandemic.

Millions of workers from around the world were forced to work from their living rooms, kitchen tables and bedrooms when COVID-19 closed workplaces early last year.

But despite initial challenges, the US National Bureau of Economic Research (NBER) predicts the WFH trend will stick thanks to benefits for both employees and employers.

Here are five reasons why the shift to home working will be a long-lasting trend, according to the NBER’s survey of more than 30,000 people in the US.

1. Better-than-expected WFH experiences

The pandemic prompted an urgent, not to mention costly, experiment in WFH, leading to decision-makers reorganizing working arrangements.

Previous resistance to WFH – such as expectations of lower productivity, costs of experimentation and challenges relating to coordination within networks – was swept away by the urgent need to protect employees and wider society.

The NBER’s Survey of Working Arrangements and Attitudes (SWAA) shows respondents reported better-than-expected WFH experiences and higher productivity.

Compared to their expectations of home-working pre-COVID-19, 20.6% of people polled said their productivity was hugely better than they expected, with 21.9% saying it was substantially better and 17% saying it was better.

Some 26.7% said it was about the same, while only 13.9% overall said it was worse.

Respondents also reported better-than-expected experiences of working at home on average, indicating excessive pre-pandemic pessimism about WFH.

2. New investments in physical and human capital that enable WFH

SWAA data indicate that the average US employee has invested 15 hours of time and $561 in home equipment to facilitate WFH, with the dollar value of such investments amounting to 0.7% of annual GDP.

COVID-19 also led to companies and other organizations rapidly improving equipment and back-end systems that support WFH.

The result of these investments is that both employers and employees are now much better positioned to remote work effectively.

3. Greatly-diminished stigma associated with WHF

Before COVID-19, home-working was often associated with shirking, with one pre-pandemic study estimating that productivity was 12% lower among workers selected to WFH.

However, SWAA respondents reported improved perceptions of home-working among, some, most or all “people you know” after the start of the pandemic.

Only 28.3% reported no change in perception and just 6.6% reported any deterioration.

4. Lingering concerns about crowds and contagion risks

The survey shows only 28% of respondents intended to fully return to pre-pandemic activities once a COVID-19 vaccine becomes widely available.

The rest said they will remain cautious about activities such as indoor dining, travelling on the subway and ride sharing.

The chart below shows the number of days per week employees want to work from home, with a large majority favouring paid days outside the office.

The NBER expects lingering concerns about proximity to other people will further fuel demand for being able to WFH.

5. Pandemic-driven surge in technological innovations that support WFH

US patent applications advancing WFH technologies more than doubled between January and September 2020 – surpassing the previous peak, according to the report.

Such advances are expected to reinforce a wider move towards WFH well after the pandemic ends, the NBER says.

COVID-19 also prompted regulators to innovate, spurring a rise in virtual consultations for health and social workers.

If regulations remain supportive of online services, WFH could become more practical for healthcare professionals, the report adds.

Benefits for both employers and staff

The NBER report concludes that home-working will have three major consequences.

Staff, particularly the better educated and high earners, will enjoy large benefits from more remote working, it says.

There will be a 5% productivity boost in the post-pandemic economy due to re-optimized working arrangements and less time spent commuting, NBER adds.

However, the move towards more home-working is likely to impact major city centres, with direct spending expected to drop by at least 5-10% compared to pre-pandemic levels.

The future of work after COVID-19

The global workforce lost an equivalent of 255 million full-time jobs and an estimated $3.7 trillion in wages last year, as a result of COVID-19.

The World Economic Forum’s Jobs Reset Summit 2021 on 1-2 June 2020 will examine how policy-makers and business leaders can lay the foundation of a new social contract and rebuild economies in a way that provides opportunities for all.