What is significant is how work from home impacts productivity. In our study, we found productivity rose by 13% — that’s massive. It’s almost like having an extra day a week. Our analyses found people were working more minutes — they were more punctual.
They’d take shorter breaks and needed less sick leave. They weren’t wasting time on commutes. They were literally working more of the time — and some were more efficient per minute. Home conditions often suited workers who were distracted by noise in the office, like a talkative neighbour or a birthday celebration. These factors can disturb the concentration and efficiency of some. Those workers were managing far better from home.
(Nicholas Bloom, Stanford University)
Currently, people who work in international businesses, like US companies with overseas subsidiaries, say remote work has made collaborations much easier. People feel more connected in these firms now — it no longer matters if you’re down the street or in another country. All that matters is your internet being good. Work from anywhere will increase global integration and make subsidiaries feel more linked and be more central to companies — a CEO can now delegate far more to them.
But there are possible drawbacks too. In the US, work from home opportunities are five-fold higher for those with a university degree. Post-pandemic too, this opportunity is most likely to go to educated people, who are already richer than the less educated. So, we are giving a valuable benefit to those who are already higher-earning professionals and who experienced a safer pandemic compared to manual or frontline workers. We need to look closely at whether this will deepen inequality.
Gender is also an important factor. Women are slightly more likely to want to work from home — about 20% men as compared to 24% women recently reported wanting this option. However, women are actually a little less likely to be allowed to work from home because of the industries variant. Women tend to be more concentrated in the service sector which is based on interactions with customers. That’s harder to do remotely. So, the gap between what women want versus what they could get is quite large and needs to be addressed.
We will also need to re-examine promotions. In post-pandemic America, work from home for a few days of the week is likely to be the norm. You could be asked to come to office on two or three days, the rest being home-based. The risk here is of differences in promotions based on that — in China, we saw the promotion rates of those working from home were about half of those going into the office. Many managers in the US feel they’d be more likely to promote people coming into the office over those working remotely. But such differentiation could impact people with young kids, women or people with disabilities.
Certain groups more likely to work from home could find that they don’t get promoted much. That’s a problem for companies because then you don’t have diversity in leadership. Another possible cost is that people could be less innovative — doing our current tasks is going well. But data shows that the more people communicate with their current teams on email and messaging, the less likely they are to communicate with people they’ve never contacted before.
So, people can end up working in silos, growing weaker at making new connections, which are actually very helpful in innovation. Unless we figure this out, there could be a long-run problem with innovation slipping. Yet, work from home will certainly be the norm, and, with these possible gaps filled, it will be a liberating experience. Once it’s established, I foresee two types of real estate markets being differently impacted.
Tall buildings with office spaces are both difficult to get to from the suburbs and involve a lot of crowding, both in subways and in the actual building lifts. These will be problematic with many people wanting to continue social distancing. So, high-rise office buildings in city centres are likely to see a drop in rental value. Conversely, there will be an increase in demand for office space in the suburbs — large industrial parks or sprawling office campuses offer less density. These will grow.