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5 predictions for the future of work and how it will make things better for society, business and the planet.
Did you know that we owe the 9-to-5 work schedule to the bygone era of industrial revolution? While it was popularised by Henry Ford in 1926, the concept became the focus of labour unions of the 1800s who were facing up to 100-hr work weeks thanks to industrialists who wanted to maximise the use of costly machinery and the availability of electricity. The 9-to-5 was, in a way, a salvation for the worker, but it was built with the newly industrialised world and its needs in mind.
It is unbelievable that the 8-hr work day stuck around for over a century as companies and countries rested their laurels on this tired employment term. I understand it was easy to define how much time of a person a company was essentially leasing, but with the introduction of labour standards and laws and the move to digital starting with the dotcom era and accelerated by the personal handheld device revolution, it ceased to be fit for purpose more than two decades ago.
To those who say it’s necessary to keep work-life balance, I say that balance was never there, especially after Blackberry became a thing, selling more than 50 million units at its peak in 2011, followed by the iPhone.
And now, we’ve learned to welcome work into our homes amidst the imposed lockdowns and found out that it’s not so bad after all, at least for the services sector. Deutsche Bank’s chief transformation officer is reportedly looking into the learnings of the past four weeks and the opportunities it might represent for cost cutting. The hint to what that might be was contained in Barclays CEO’s comments this week: “The notion of putting 7,000 people in the building may be a thing of the past.” Similarly, Standard Chartered’s chairman Jose Vinals said “It may be that going forward you don’t need to have 100% of the people in the office, 100% of the time.”
These comments are a harbinger of changes that will impact how we work, live and spend which will in turn have immense consequences on the environment, government, and property valuations.
1. True democratisation of opportunity
Remote working was already gaining popularity prior to the lockdowns. According to Buffer’sState of Remote Work 2019, 99% of respondents said they would like to work remotely at least some of the time for the rest of their careers. The main attraction seemed to be the flexibility it offers. With the lockdowns, every worker got a taste of remote, and it looks like most workers want this to be the new norm. According to a report commissioned by O2 Business, nearly half the workforce think flexible working will increase. Of those expecting an increase, 33% expect to work from home at least three days a week after lockdown while 81% at least one day a week. The ultimate impact of this could be true democratisation of opportunity where location is no longer a filter for hiring. This could be the era of Globalisation 2.0 for the labour market, surpassing the first wave from the 90s which was limited to outsourcing of specific skills. It remains to be seen how this will square off with the growing nationalisation movements across the world. I suspect it will be a two-phase movement: initially starting off within national boundaries but then widening its scope within adjacent time zones as education and skills attainment equalise across national borders.
2. Cost cutting without the layoffs
The adjustment to WFH has been rather smooth for the services sector, which is why you hear bank chiefs looking into making this their ‘new normal’ to save on office costs. According to Statista, London is the most expensive city in Europe for office space averaging £69.50 per square foot in the City and £112.50 in the West End. There is a significant cost saving opportunity if businesses were to halve employee’s office time. Some businesses plan to allow one department at a time to come into the office one day a week to allow for in person meetings. That department would then work from home for the rest of the week allowing other departments to take over the office space on those days. The business could then either reduce their office space or sublease the rest of the office that they don’t need thereby reducing or offsetting the cost.
3. Fewer commutes will lead to better air quality
In 2018, the UK was referred to Europe’s highest court for failing to tackle illegal levels of air pollution, and nearly half of London’s roads were expected to miss pollution limits in 2020. With London’s Citymapper Mobility Index falling from 100% in early March to 11% by May, the lockdowns have had a clear impact on air quality with 50% reductions in toxic air during that time in some of the busiest roads in London. Even if only 20% of London works from home on any given day, it would cut daily commute numbers leading to lower emissions for the long term.
4. Residential demand will move out of the city
When you’re commuting every workday, you have an incentive to live close to your office, increasing property demand and thereby property values in cities. For instance, 62% of employees currently live within 30 minutes of their workplace. However, if working from home became more common, 63% of Brits would be willing to live up to an hour away from their workplace. Furthermore, nearly half of city dwellers would happily move out to more rural areas, making places like seaside towns and the countryside more in demand. This would in turn result in a balancing of housing demand and prices between urban and rural areas. It could have a knock on effect on making rural countryside more expensive than before for locals so this shift needs to be carefully managed from a socio-economic perspective.
5. Governments will provide skills improvement
As mentioned before, the current crisis was absorbed less painfully by the services sector, but when your job is in manufacturing or engineering, it’s rather tough to work from home. I expect most manufacturing businesses to accelerate their investment into robotics to eliminate the ‘human’ from any supply chain or manufacturing part of the process, making their business more resilient to future epidemic shocks. This will in turn result in less jobs for people with those skills in the future, potentially causing permanent unemployment. In order to lower unemployment and the unrest it will eventually cause, governments will have to take an active role in continued education and skills improvement for their populations so the majority of the population will be eligible for services work that can be performed from home. On the extreme end of the scale, you might hear universal income mentioned more and more as a political lever for new campaigns and votes in the future, even in the US.
The lockdown has truly shown us all that many things we took as impermeable for decades can actually change quite successfully and drastically. The speed at which many workers adjusted to remote work is astounding, let alone the level of productivity they were able to retain amidst the emotional and psychological impacts of the pandemic. With the lockdown set to ease slowly, offices will never return to ‘normal.’ To that, I say good riddance.
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