In some sectors, such as IT, remote work has been popular for years, as it provides companies the freedom and flexibility to build products faster, hire the best talent in the world, and enjoy other benefits of the location-independent setup. For other industries, it may be harder or even impossible to go online, but 2020 set its own rules.
Let’s see how the Covid crisis influenced the popularity of remote work and how companies coped with 2020 and its ongoing challenges.
Resisting the Transition to Remote Work
Despite the fact that tech companies have trailblazed some modern office trends, including casual workwear, open office environments, and standing desks, some tech giants were against remote work for the longest time.
A bright example was the 2013 Yahoo debacle when telework was essentially banned at the web service.
Of course, regular office-based work has its specific benefits over telecommuting, such as:
- Offices give companies more control over work processes.
- Live meetings can supposedly be more productive than online calls.
- Some people need in-person interaction.
- Being physically present in the office induces creative collaboration.
But then 2020 rolled around, and remote work became the new normal and often the only means of survival for many companies.
Whether it was a forced transition or not, months of social-distancing rules, quarantine regulations, and lockdowns drove companies to re-think and restructure their processes.
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For many, there were just two options on the table: adjust to the situation or go out of business.
How Did Companies Cope with Pandemic-Induced Telecommuting?
According to a paper on the impact of Covid-19 on small business outcomes and expectations, 43% of surveyed U.S. companies had temporarily shut down a few weeks into the crisis. During the same time, 45% of both large and small businesses in the U.S. moved part of their staff to remote work, according to the National Association for Business Economists.
According to these numbers, it would seem that some businesses were hoping the crisis would blow over within weeks. As time went on, new models of work were implemented but not fully exploited.
This begs the questions:
- Which businesses can transition to remote work?
- What occupational attributes are suitable for remote work?
How Did the Covid Crisis Impact Large Tech Companies?
Although tech seems to be more adaptable to telecommuting, Silicon Valley companies and other U.S.-based firms had to cut over 40,000 jobs by May 2020. The biggest share in that number belonged to Uber, with over 7,000 employees laid off, according to official sources.
In addition, many Silicon Valley startups were forced to flee their locations and sell co-working spaces, homes, and cars. The upkeep was too expensive while the facilities and vehicles were underused due to the quarantine. Workers also moved from the expensive Bay Area to more affordable locations — where they could rent or buy homes with more room to accommodate remote work.
For those that transitioned to telecommuting, predictions about returning to in-office work remain uncertain. Offices that intend to reopen continue to postpone their deadlines. For example, in July 2020, Google estimated they would resume working in-office by the summer of 2021, but in December, they pushed the date to sometime in September 2021.
Some companies are seeing the remote office as a trend that’s here to stay, and in that spirit, Facebook gave its employees a $2,000 bonus to set up home offices.
On the other hand, companies that facilitate the observance of social-distancing rules have seen an increase in demand. Edtech giant Coursera is expanding its collaboration with universities, while the popularity of Zoom skyrocketed until new collaboration apps emerged or existing ones, such as Microsoft Teams, improved. Grocery delivery apps are also on the rise, with Instacart benefiting from a 150% increase in demand.
Businesses That Struggle to Go Remote
While more and more work is getting automated and can be performed remotely, certain activities can hardly be performed off-site.
As a result, the nature of some occupations and businesses prevents them from going fully online. Such jobs include:
- Healthcare and wellness providers
- Delivery and transportation
- Installation, maintenance, and repair
- Food preparation and service
- Protective services, and many others
Occupations that have a better chance at making it work from home are in computers, education, financial, legal, management, and arts sectors.
As shown by Dingel and Neiman, higher-income workers are more likely to work from home and less likely to be unable to work during a crisis — and this disparity has remained during Covid-19.
These findings can help policymakers target financial aid toward groups that need it.
Remote Work Before and After Covid-19
Telecommuting spikes match times of crisis. Back in 2001, when broadband connections were just starting to replace dial-up, the 9/11 tragedy and anthrax attacks spiked interest in remote work after several major government offices were forced to close. Three years later, at a committee hearing, Congressman Tom Davis expressed his concern over the lack of telework opportunities in the “post-9/11 world.”
Another handful of years later, there was another spike of interest in telework. On the other side of the globe, 2010 and 2012 brought earthquakes to New Zealand. This time, government agencies fully transitioned to home-based work.
Remote work opportunities provide continuity in operational plans, and not only for government agencies. Telework in a variety of forms should become an integral piece of the emergency preparedness and response plans of companies that secure the 37% of jobs suitable for remote work.
The pandemic has renewed and increased the interest in remote work across industries and regardless of company sizes. In the U.S., the number of employees who have never worked from home dropped from 47% to 34% in 2020, while at the same time, the number of people who work from home five or more days per week has leaped from 17% to a staggering 44%.
However, not all employees want to continue working from home when the pandemic blows over. For example, only 12% of employees at WeWork want to keep the arrangement, while the others would like to come back to the office two to three times a week.
Benefits of Remote Work the Pandemic Is Driving Home
“Industrial digitalization and new habits of working are the kinds of the things that our business is based on. This crisis forces people to think about how work should be done. I don’t think that the situation normalizes once corona is over – this will cause permanent changes in our working habits. So, in theory, this should help us to advance further.” – Tero Aaltonen, CEO of Augumenta — a Finish company that develops AR solutions that enable remote work in factories.
With jobs that don’t require people to work on-site, one of the biggest benefits companies can derive is cutting the costs of real estate. Buying office spaces, renting offices and employee housing, and all the renovation work feed huge budget requirements.
Going fully or partially remote means companies need less workspace or none at all. They can maintain an office in a more affordable location, as well as employ workers from areas where the cost of living and salaries are more suitable for a company’s budget.
On the other hand, companies that simply cut costs on real estate can allocate the funds to other areas of interest, such as:
- Testing new business models
- Hiring more or better-qualified personnel
- Venturing into new segments
- Implementing and improving new work models
- Investing in new initiatives (e.g., startups, charities)
A huge area of interest that remote companies can pursue, both as a development and investment opportunity, is virtual reality. In 2019, a PwC report titled “Seeing is believing” projected a $1.5 trillion addition to the global economy by 2030, all thanks to this technology.
VR and AR have already taken a course to speed up product development, train staff, and enhance customer experience. And now, with virtual offices in the making, the projection doesn’t sound farfetched.
Findings and Lessons Learned
Leveraging the rapid changes in technology and adapting our work environments to the present time is a must. When it comes to workplace effects, telecommuting reduces health risks and is less tasking on the budget.
Numerous companies are becoming more motivated to hire employees based on skills instead of location or pedigree. These diverse teams can create better products due to a wider understanding of customers and their needs. However, some businesses and occupations that require interpersonal interaction and on-site activities cannot fully transition to remote work.
In conclusion, the coronavirus pandemic has certainly reshaped our view of the 21st-century workplace and will presumably speed up the transition to a hybrid model that includes both telecommuting and in-office work.