Shirt and tie from the waist up, pajamas from the waist down and Fido on your lap. We all pretty much know the quintessential look of a work from home professional. This rather more relaxed work culture was a staple during the COVID-19 pandemic. The world is pretty much back to its pre-COVID state, and most folks have gone back to work but many still remain to WFH.
Working from home was not really a COVID-19 phenomenon. The idea existed from the history of humanity as hunter-gatherers combine living and work spaces for communities to pool resources together efficiently. During the medieval times, craftsmen and artisans, setup shop in their own homes, which are architecturally designed to accommodate their livelihoods and their families. It can be said that it is hard to distinguish the difference between work and life in these cases and even gender based professions can be blurry most of the time. Sound familiar?
The Industrial Revolution ushered a new way of working. Working in factories became the norm and men and women alike were being pulled to work in harsh working conditions. Skills became more specific and specialized.
By the turn of the 20th century office work began to take shape similar to what we are accustomed to nowadays…well at least before the pandemic. Office work led to people commuting more from work and many of the tasks became more automated as technologies like electricity, computers and telephones made work more efficient and the average worker became more productive.
The unwelcome arrival of the COVID-19 pandemic has brought working from home a necessity. Business as usual indicates we all have to work within our limitations and internet bandwidth and technologies like Zoom, Skype and Teams became the replacement to conference rooms.
The question is, are we more productive if we work from home or are we worse off? Are we blurring the lines of work and life by working from home versus being in the office?
A typical company can save around $11,000 owe year per employee who work from home at least some of the time but not all the time. This includes costs like real estate costs, overhead from utilities, and even transit subsidies if the employers offer it. The average worker also saves on commuting costs.
There are also direct benefits to employees in terms of savings in clothing, food, and even childcare.
The effect on the environment is quite mixed. There is a definite benefit to WFH from reduced emissions from traveling often. However the WFH pandemic experience also showed that employees moved farther away to larger homes at lower prices resulting in longer commutes. This somewhat offsets the cost of commuting more often. The effects on energy consumption from working in the office versus from home is also quite mixed.
The WFH economy has also widened the existing inequality in our labor markets. Many jobs specifically those in managerial roles as well as those jobs in the financial and technology industries can benefit from working from home. However, many jobs still require face-to-face interaction such as those in healthcare, retail, and service industries.
Data on productivity is also mixed and comes with a caveat. Employees who work from home full time are actually found to be 10-20% less productive than those that work from the office. Communication issues, coordination and of course self-motivation comes into play play a role in the decline productivity. However, it was found that employees on a hybrid schedule (working from home only on some days) were about as productive as those employees that are in the office full time.
The WFH culture is most likely here to stay. As workers prefer the flexibility of working from home, employers are also grappling with how to keep employees engaged. The gap is narrowing though.
Moreover, employers needs for office space and projecting these needs out in the future becomes a challenge. Several major cities are seeing demand for office spaces in urban areas declining. And a whole entire ecosystem exists around these real estate shifts from coffee shops, restaurants, and other businesses that rely on these office workers to show up for work.
One thing is clear though—WFH is here to stay. Employers have a unique challenge in finding this happy medium between keeping employees happy by giving them enough flexibility while balancing productivity and costs. It will be an interesting dynamic to observe for sure.
The Gist:
The WFH economy allows companies to save more money per employee and allows employees to save more costs related to childcare, commuting, and clothing
However, the WFH economy also has mixed environmental effects, and it contributes to a 10-20% decrease in productivity
The WFH economy continues to widen the labor inequality gap as well
Overall, the WFH economy has mixed results, but it is ultimately here to stay
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