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Report

The changing face of the workplace — the implications for employees, employers and business

What are the direct and wider implications for employees, employers and business? Are these changes in the way people work here to stay?

A recent report from the Office of National Statistics (“ONS”) on 10 November 2021 reveals that over two-thirds of working adults reported travelling to work between 20 and 31 October 2021. Closer analysis however of the underlying data reveals that, for a significant minority, working from home either permanently or for part of the week continues.

As we slowly emerge from the shadow of the pandemic and in the face of new variants of concern, in particular Omicron, we consider whether it is likely to endure and the implications for organisations of the changing face of the workplace.

Homeworking in more detail

Working adults travelling solely to work has increased from below 40% at the start of 2021 to just over 50%, though the upward trend seen during the summer has plateaued since September.

The ONS data did however evidence an increase over the same period from 5% to 20% of those working both at home and the workplace (hybrid working) and, conversely, a decrease in those working solely at home (15%).

The sectors having the highest percentage of hybrid or sole home working were “information and communication” followed by Professionals, (scientific and technical), education and real estate. Those in accommodation/food service, followed by construction and manufacturing had the fewest hybrid or full-time home workers.

We draw three main conclusions from both the data and the policies announced by several employers over recent months. Firstly, the percentage of those working full time in the workplace, will, in the future be unlikely to increase beyond 60% of the total. Secondly, there will be a ‘residual rump’ of permanent home workers (we estimate no more than 10% to 15%). Thirdly, a significant minority of working adults will engage in hybrid working — spending no more than 2 to 3 days a week in the workplace as opposed to home-working.

Overall, the data underpins the anecdotal evidence of employees, recognising the benefits of hybrid working to a home/work/life balance and employers astute enough to respond to the feedback and observations of its workforce with one eye on staff retention.

Will this endure?

Whilst many commentators saw working from home as a temporary phenomenon at the start of the pandemic, once unleashed from its bottle, the “work from home genie” is likely to prove resistant to any attempt for it to be recorked.

Lockdown necessitated, for many organisations, a rapid upgrading of technology and home working capabilities. Now that employers have seen, that for the most part, productivity has not been markedly affected and leads to a more contented workforce then, subject to safeguards, ensuring levels of innovation and collaboration are maintained, we suggest the hybrid model will be permanent.

The implications

We see this seismic shift in home working as having many direct and indirect effects.

Those returning to work in recent months will have seen the stark physical reminders of the pandemic’s impact on a plethora of businesses set up to service office working — whether in the form of boarded-up cafés, pubs or sandwich shops or the reduction in numbers travelling by public transport.

Whilst we fall short of predicting a devastating economic transformation of the order seen in the mid-1980s with the closure of the mines and its effect on mining communities, we suggest that the changes seen so far will endure with a likely shift to an economy more attuned to the homes of employees and not ‘workplaces’. We see the emergence of recent and future pandemic variants as fuelling that transition further.

For the majority of employers post-pandemic, only a reduced physical footprint will be needed — this will have implications for both overheads and rental income for landlords, but will also impact construction projects. In short, supply is likely to outstrip demand in the future — obviating the need for all but a few bespoke projects.

For the 10% to 15% of working adults able to work permanently from home, suburban living with good commuter links to city centres is no longer a necessary consideration. This, in turn, has already led to increased demand and consequent rise in property prices in many desirable coastal locations.

Wider implications — workplace mental health and career progression

Catherine Mann, an Economist of the Bank of England’s Monetary Policy Committee, was reported in The Times (12 November 2021) as stating that those who work from home risk falling behind in their careers as two tracks develop — one physical and one virtual, with the former more conducive to career progression.

ONS research shows that women are more likely to work from home than men. The Times states “…it affords them more time to complete tasks and makes for fewer distractions…”, given ongoing pandemic related disruption to schooling and accessing childcare.

The current arguments played out in the media as to the risks/benefits of holding the annual Christmas party, highlights how the pandemic has also had a wider, more indirect impact on workplace social events, volunteering, donating and other employee initiatives. Employers will need to look for innovative ways in which to engage staff working remotely.

Employers will also need to ensure that remote workplaces are subject to the same risk assessments and audits. The HSE draws no distinction, from a health and safety perspective, between the office and the home

The pandemic has caused increased levels of depression and anxiety worldwide. The Lancet reported on 8 October 2021 that cases of major depressive disorders had risen by an estimated additional 53 million cases worldwide, with cases of anxiety disorders increasing by over 76 million.

We suggest, however, that the picture of workplace mental health is much more nuanced. Although some research points to an increased rate of employee burnout and a feeling of isolation by many, other studies have suggested that many employees report a sense of gratitude to the support received from their employer during the pandemic. Further, home working has allowed them to obtain a proper work/life balance alongside the removal of the stress induced by commuting. We also suspect that co-worker and management conflict — a significant driver behind pre-pandemic workplace stress, has been reduced significantly by home working. In future articles, we will examine the issue of workplace mental health in greater detail.

Conclusions

Whilst the effects of the pandemic continue to linger into most facets of daily life, assessing what will be a “new normal”, is potentially fraught with uncertainty. For a significant minority, however, the hybrid workplace model appears likely to remain for the foreseeable future.

Although this may sound the death knell for some businesses set up to service a full office-based economy, the impact will have positive benefits for employees and employers alike, whether from a reduced costs base, improvements to work/life balance or a reduction in cases of occupational stress and anxiety.

Employers and businesses need to become quickly attuned to the implications. The face of the workplace has changed for many and that change is permanent.