Issue 235: 2020 05 28: Work After Covid-19

Image of fake Government exhortation to 'KEEP CALM and GET BACK TO WORK'
Back to work and the end of the silly season

28 May 2020

Work after Covid-19

Opportunities for transformation.

By Mike Hampson

The 2020 Corona pandemic has been one of the most globally impacting events in many of our lifetimes. From the first signs of the illness in late 2019 the virus has swept across the globe and had a devastating effect on individuals, families, businesses and countries, both in terms of the tragic scale of loss of life and in terms of the universal shutting down of industries and economies.  It is this universal impact, and the speed with which that impact has taken place, which will lead to a dramatic change in the way we live and work, with one of the most significant changes being on office-based businesses.

As a business in the city of London, we have already made the decision to give up our office and move to the world of remote working, and I am sure we will not be the only business to make this call, and indeed some will be much larger than ourselves.  The globality of the pandemic, and the response that it has required, with most countries enforcing lockdowns and social distancing, has had the unique effect of forcing all businesses to adopt the tools and techniques of remote working simultaneously and most have found out how effective this is.  After the Great Plague, landowners across Europe found that there were fewer workers to farm the land and as result these workers were able to demand higher wages or move to landowners prepared to pay those higher wages.  This time the outcome could be a drive to a more distributed workforce, driven by both the employers, keen to eliminate the costs of real estate, and also by the employees who can themselves cut out the commuting time and cost and enjoy a higher standard of living.  Already major banks have made statements that they will be looking at this, and the days of the large office and city centre concentration of big business could be numbered.

But the benefits are not just reduced costs.  If I focus on the UK, the benefits for the individual employee, the company and also the national agenda are all significant.

Most of these discussions start at the company level, and indeed it is individual businesses that need to drive these changes, and for many the cost savings will be a key driver.  For us, 25% of our fixed costs related to property, and being able to reduce that enables us to significantly improve our profitability or to pass on those benefits to employees or customers. But other benefits for the company are there to.  If the workforce is remote, it opens up a much larger talent pool. Individuals no longer have to be based in one city or another, we can access talent all over the country just as easily.  Equally, remote working lends itself to flexible working, again opening up a whole new pool of talent such as parents returning to work, or allowing them to return to work and still be available to do the school run as required.

This flexibility will also accelerate the growth of the ‘gig’ economy, in particular the white collar or professional gig economy.  With the possibility to pick your own hours, and also the ability to work for multiple employers, this new way of working will prove very attractive.  For some time commentators have been heralding AI as the technology that will automate the roles of many an office worker, but it may be the big office and the off-shore centres that AI kills off (thanks to Covid-19).  The combination of remote working tools, cloud based systems and AI should enable people to work effectively and efficiently from home, and still collaborate with their colleagues.

This ability to access a broader workforce also plays to the national agenda of ‘levelling up’ the economy.  With remote working, the north/south divide can be closed without re-generation of industrial areas or the need for people to travel to where the opportunities are. It could also provide a much needed boost to any town where the high street has been hit. With no need to commute to work, people will be using their local high street for picking up the morning coffee or lunch or even using local flexible workspaces, to get them out of the home environment, or where their home environment is not ideal for remote working.

Other considerations for companies include the way in which the organisation is structured and run.  Importantly they will need to develop trust in their people as they will for the most part be managing themselves, but they will also need to ensure that their management style can handle the distributed workforce.  They will need to be focussed on the results and the outputs, they will need to be clear about what is expected of their team and they will also need to develop ways to check-in on their people remotely, both individually and as teams. Happily, many of the video conferencing tools now offer features that support all of this.

For both the employee and the employer, they need to be aware of the issues relating to this new way of working.  For many it can be a more intense experience.  Sitting at a screen all day is tiring and video calls can be more intense than physical meetings, with less pre-amble and social interaction and more focus on the business issue at hand.  Combine this with the fact that you have no commuting time, which for many is down time, and people need to be careful to manage their work hours, and also ensure that there is a separation between home and family life.  For many, work will be more efficient given the intensity and lack of distractions, which may even lead to a move to a four day week as standard if the efficiency savings of reduced commuting can be leveraged for work.

For the individual it is important to ensure that the remote working environment is correctly set up, if this is indeed the new norm.  It cannot be done sitting on the sofa or off the side of the kitchen table.  All of these points reinforce the need for employee well-being being even higher on the management agenda than ever before.

From a government perspective, these changes can help to significantly support the national agenda.  We have mentioned levelling up the economy but in many other areas this can support the national goal, most notably in climate change – eliminating hundreds of thousands of daily commuting journeys should significantly help to reduce the carbon footprint of the country.  Also, what of the freed-up office spaces?  With a national housing shortage, re-purposing these to offer housing or live/work spaces makes complete sense and using them in this way would ensure that city centres did not become desolate industrial landscapes but thriving local communities.

But government will need to be creative and imaginative in how it supports the move to a new way of working.  I have often argued that the tax system is no longer fit for purpose; so many aspects of it need to be re-thought.  Business rates will need to be re-imagined.  Business offices provide significant income for local authorities and these will disappear as offices are vacated.  Also with more people working more flexibly, often for multiple employees, individual income tax will need to reflect the new way of working.

The shift to new ways of working has been set in train as a result of Covid-19; it remains to be seen how far-reaching and sustained the changes are, but it has the possibility to provide a more satisfying work environment, reduce costs for businesses and individuals, provide a much needed boost to the climate agenda and possibly re-invigorate local communities.  Let’s hope that government and businesses take advantage of the window that has been opened up into the future.

 

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