In the last year, many aspects of our lives have changed. Also, the way we work. Many have discovered the many benefits of a remote work approach. Others however, still struggle to reach the productivity and motivation level and a healthy work-life balance they had before whilst working at the office. What are the reasons for these disparities? And how will this new work culture continue affecting us?
Analyzing the research on the future of a remote approach that McKinsey has conducted, one can find that its success or failure is determined by different factors that vary depending on the country, industry and even by gender.
Tasks, not occupation
Contrary to the common belief, the success or even the ability to work remotely is not determined by the occupation itself but by the tasks and activities that are performed during work.
There are activities that:
…can perfectly be conducted remotely without affecting its productivity levels, sometimes even improving them.Good examples can be found in the field of business and financial services.
…can theoretically be conducted remotely but that are much more effectively done in person. Examples would be coaching, providing feedback and advice, teaching, making critical decisions.
…simply cannot be conducted remotely. These would include many physical or manual activities as well as those that require fixed equipment.
Furthermore, if we differentiate between the activities within occupations, finance and insurance seem to be the sectors with highest potential. It is followed by management, business services and information technology. When it comes to construction, mining and agriculture for instance the productivity power within these sectors is negatively affected by a remote work approach.
Advanced economies are better prepared to work remotely
COVID has accentuated inequalities within different spheres. The shift to a remote work culture has not been an exception. Advanced economies such as the UK and Germany have the highest potential for remote work since business and financial services occupy a large share of these countries' economies.
In emerging economies, employment is skewed towards jobs that require physical and manual activities such as agriculture and manufacturing. For instance in India, a country known for its high-tech and financial services industries, the vast majority of its workforce is employed in occupations that cannot be conducted remotely like retail services and agriculture.
What will the future of remote work look like?
What are the implications of a more standardized remote work environment for the future? How will it influence not only our way we work, but also our way we live? How will cities that have been known for being economic hotspots evolve?
Currently only 5-7% of the population in advanced economies works remotely. If this share increases to 15-20%, there will be important implications for urban economies around the globe. More people working from home means fewer commuters traveling to different locations because of work. This would have an impact on transportation, gasoline as well as in the automotive industry. Also restaurants and retail in urban centers that mainly serve office workers, the demand for office real estate and many other consumption patterns would be affected.
For instance Moody’s Analytics predicts that the office vacancy rate in the United States will rise to 20.2% by the end of 2022 compared to 16.8% in 2019. A survey of 248 US chief operating officers found that one-third plan to reduce office space in the coming years as leases expire.
Does this mean that the overall trend in advanced economies will be an even stronger shift to a remote working culture? It remains to be seen. Some disagree, most prominently Amazon, signing leases for a total of 900,000 feet of office space in six cities around the USA, insisting on the importance of spontaneity in companies and how it lacks in virtual teamwork.
Also the productivity question remains unanswered. So far there is a widespread contradiction about the productivity impact. Some employees, having gained experience working remotely during the pandemic, are confident in their improved productivity.
Employers also express a mixed range of opinions. The Wall Street Journal published interviews, where some seem confident that remote work will continue whilst others remain critical.
One important aspect to consider when working remotely is connectivity. Developing an improved digital infrastructure will require significant public and private investment. This might indicate towards an increasing gap between emerging and advanced economies when it comes to the future of a remote work approach.
Other gaps are also growing due to this new work approach. Remote work has increased the gender disparity, worsening the regressive effect of the pandemic. Even though remote work may be a blessing for many women due to the increased flexibility and reduced commuting time, the female workforce of many economies is concentrated in occupational clusters that cannot be done remotely, it being healthcare, food services and customer service. Previous research from MGI has shown that jobs held by women are 19% more at risk than jobs held by men because they are way more represented in sectors that have most been affected by COVID-19.
The future and WorkMotion
For the future, some forms of remote work will persist and others will vanish after the pandemic is over. Many adjustments and changes will be needed within organizations but also outside of them, investment in digital infrastructure, structural transformation of urban areas, commercial real estate and much more.
It will also be important to keep an eye of increasing inequalities in different spheres, not only between emerging and advanced economies but also in relation to the gender pay gap. New psychological and emotional burdens among employees as for instance the feeling of isolation should also be taken into consideration when building a healthy remote work environment.
As an Employer of Record (EoR), WorkMotion is well versed in the issues and difficulties that companies that act remotely face both employers and employees. Even though it is true that not every industry, company and even individual is suited to profit from a remote approach, an EoR will support your company to make the most of it, no matter if only while strictly needed or also in the future to continue your journey in the remote work environment.
WorkMotion will support you when hiring employees abroad without a local branch. We manage payroll, social benefits and taxes - 100% legally compliant.