Cliff Taylor: Time to plan for implications of working from home

Nearly two years on it is still hard to see the longer-term impacts of the pandemic, beyond speculating that we will need some permanent structures to deal with it.

Significant leeway may be needed in the public finances, for example, to deal with Covid-19 and the contingency funds put aside this year are likely to become an annual event, at least for some time. And the future shape of some sectors remains uncertain – travel, hospitality, retail and events all still face big uncertainty amid changing consumer spending patterns.

But one trend is here to stay. The pandemic has fundamentally altered the world of work for many and, nearly two years on, there is surely now no going back to the way things were.

Work can indeed be done from home, even if innovation and team-work requires some presence in the office

The eventual outcome of the working from home debate may not entirely please either employers or employees, but the surge of presenteeism and the obligation to do long commutes to offices each and every day is over. Flexible working is here to stay.

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The pandemic has, to an extent, speeded up trends that were already in evidence. Stanford professor Nick Bloom told the Financial Times that the acceleration of the existing slow move to working flexibly had seen the equivalent of 30 years progress made in the first 18 months of the pandemic.

But the crisis has meant a fundamental change in mindsets – companies may argue that they need employees in the office some of the time, but they can’t now argue they need them there all the time. Work can, indeed, be done from home, even if innovation and team-work requires some presence in the office.

And what studies there are suggest that flexible working can – on average – improve productivity a bit, probably from a combination of more contented employee and less time wasted commuting. Though it does vary from job to job.

Need for office

I initially thought the idea of “hybrid working” – two or three days in the office and the rest at home – was a bit of a cop-out as an idea. It avoids the question of why people need to be in the office. But things do need a structure – and the hybrid idea is clearly gaining traction.

Bloom sees it as likely to be the way forward for a significant number of people, with a minority – perhaps 10 per cent – working remotely all the time. As every job is different, there is no “right” answer.

There is another vital factor in play now. The current jobs market tilts things in favour of employees. There are labour shortages now pretty much across the board from the highest-paying sectors to the lowest. Potential recruits are now routinely looking for flexible working. And while, in some cases, companies may seek to pay them a bit less, the general pressure on earnings is still upwards.

Where working from home lands as a trend has implications for planning for housing, transport, services and more

Bloom estimates that employees would put a value of 7-8 per cent of earnings on the ability to work flexibly, though in the current Irish labour market many will be looking for both.

The trend of working from home has big implications which have so far had little discussion. One is the future of city centre businesses – pubs, restaurants and retailers, all relying on footfall from those working in the city centre.

This week sisters Domini and Peaches Kemp – who continue to run a string of food businesses – tweeted that they had to close their Hatch & Son restaurant outlets in the Hugh Lane Gallery in Dublin's Parnell Square and beneath the Little Museum on Stephen's Green.

They said: “From 2020, there were simply not enough tourists or office workers to sustain sales in any meaningful way. Despite some attempts to pivot, it was clear we had lost 96 per cent of our revenues for 2021.”

Suburban drift

The more people work from home rather than returning to city centre offices, the more small city-centre enterprises will face the same fate, particularly as business supports are withdrawn. On the flip side, there will be more opportunities in suburbia – where the horse-box coffee outlets may be staying – and in commuter towns.

Another possible implication is the growth of international service businesses – including the big digital multinationals who have a big presence here – as enterprises with at least some of their workforce spread around the globe.

This would threaten employment here and Irish income tax revenues – so far income tax receipts here are performing very strongly, so as yet there is no sign of this happening, and there are legal and tax complications. But this is one to watch.

Not everyone can work from home, of course, and the divergence between the generally older, higher-paid people who can and the generally younger, less well-paid who often can’t will only widen the existing gap between these two groups.

Beyond that, where working from home lands as a trend has big implications for planning for housing, transport, services and more – because it alters where people want to live, the kind of homes they want and their daily movements.

What does it mean for the stated policy goal of having people living closer to work in smaller, more densely packed houses and apartments, if many are only going in to the office for a couple of days a week and want more space to work from home?

More than one-third of people were working remotely at the peak of the pandemic. If the percentage of people working remotely rises permanently from about 14 per cent before the pandemic to 25 per cent – and the average hours worked from home rise – that would be a really big change.

It has the potential to improve living standards and protect productivity – and perhaps lead to more balanced development across the country – but only if we start planning for it.