How to profit from the shift towards working from home
Many of us have been forced to use virtual offices during the lockdown – and will be loath to return to real ones. The virus has accelerated and cemented a long-term trend, says Stephen Connolly.
As the lockdown grinds on, everyone is desperately asking just how long it will last and when we can return to normal. Limited testing of individuals, a lack of hard data and unstable computer modelling are making predictions impossible. Nor can anyone say what is in fact meant by “return to normal”.
The longer activity is choked off by government restrictions, the more likely we are to adopt new habits that could change the structure of the post-virus economy irrevocably. Perhaps the key trend set to have a big impact on the way we are going to live in future is working from home. From an investor’s point of view it has the potential to give new impetus to the businesses that facilitate it.
A breakthrough for remote working
Remote working is not new, of course. Research varies, but figures for the US show regular working from home has risen faster than working in an office. Nevertheless, before the outbreak of the coronavirus, the vast majority of businesses did not envisage that so many of their employees would ordinarily be working from home for an extended period. This is a breakthrough. Even employers quite used to this style of working are unlikely to have had as many employees based at home as they do now amid the emergency curbs on movement.
Many companies may have felt that a certain proportion of the payroll must be in the office even if the role can largely be performed at home; they may also have thought that some homeworkers can’t be supervised and won’t actually do anything. Without sudden shake-ups like this virus, habits and preconceptions aren’t changed easily.
Assessing new evidence
But as the lockdown goes on and businesses carry on engaging with clients, processing tasks and keeping up with administration, more and more business leaders will ask why homeworking shouldn’t continue where it practically can.
Companies would save on costs such as rent (surveys repeatedly show that office desks are empty up to half the time) and would be likely to reap a productivity bonus from their undoubtedly happier employees. Less sick leave and lower staff turnover are related plus points. What’s more, having experienced the coronavirus, companies will be better prepared to keep their businesses ticking over in emergency situations. Clearly, the present environment is extreme and not everyone can – or would want – to work from home every day, or even at all. And not all businesses can support it.
According to a 2019 survey in the US, though, 80% of employees would like to be able to do so at least some of the time, many more than were actually doing so before the advent of Covid-19. Yet for all of those who see the benefits of domestic flexibility and work-life balance, there are others who struggle with the lack of camaraderie and face-to-face interaction.
When the lockdown does finally end, however, there will be many employees reluctant to give up the homeworking set-up and able to demonstrate to their managers that it has worked.
Assuming there are no insurmountable reasons preventing homeworking beyond the current virus period, is it likely managers would resist and thus potentially stoke resentment as they try to reshape their companies and bolster morale for the post-virus landscape?
A win-win for business
The reality for them is that homeworking could be a “win-win” and it makes sense to allow and promote it wherever possible. It’s not just a question of employees’ morale, work-life balance and productivity.
Strategically minded business leaders will see more wide-ranging and potentially significant benefits that could boost their businesses’ reputation. Environmental, social and governance (ESG) is all the rage at present and homeworking ticks several boxes when it comes to the environment and social welfare.
To read the whole of this article, subscribe to MoneyWeek magazine
Subscribers can see the whole article in the digital edition available here