The future of work; who are the potential winners and losers of the ‘new normal’
How many people have you seen on video conferences sitting in their bedrooms, kitchens, and in one case I saw recently, the cupboard under the stairs crammed in with the ironing board and boxes of washing powder? We’ve all had to make sacrifices for how and where we work over the past year, and for the most part it has worked, creating a few amusing anecdotes for us to share after these calls. We have all put up with the inconveniences of homeworking as there were benefits, for some at least, but who are the long-term winners and losers in this set up, how do individuals and, more importantly, organisations need to change how we work to make it work for everyone?
Early in the pandemic there had been an assumption that things would ‘go back to normal’ at some point in the future and we would all return to the office, but this is clearly never going to happen as we had expected it to. There have been several studies[1] that have indicated that productivity has either remained stable and, in some instances, increased over the past year. This has led to a number of organisations rethinking where their workforces need to be, and how they can work in a post-pandemic reshaped future where working from home is the normal and being in the office the exception. There are clear potential advantages for both the organisation and the employee in this new future
However, the benefits of the potential new future won’t be distributed equally between the two sides, with the organisation likely to receive the bulk of the reward through reduced costs and therefore increased profits, while the work from home employee carries the cost of the change. If this move to working from home becomes standard for a significant percentage of the workforce, then things will need to change in people’s homes where the once temporary set up at the kitchen table becomes the permanent office space.
So, what can be done to help to understand and start to prepare organisations and employees for these changes in how we work?
First of all we need to recognise that there are advantages for both sides of this where the employee can have greater control and freedom over how they work, reduced mental and physical costs of commuting and a better work life balance, and the organisation can have reduced overhead costs, and increased profits and stable or even increasing productivity.
For organisations to start to build sustainable futures as how we work changes forever, we need to recognise how the costs of doing business are being transferred from the company balance sheet to the employees balance sheet and also more importantly to recognise that these costs differ by geography, age, and gender. As with all costs both explicit and implicit, they will have the tendency to mirror the pre-existing economic, gender, and power imbalances within society and the organisation itself. An example of this being the relative wage differentials between male and female employees within the vast majority of organisations will result in the costs of homeworking being proportionally a greater burden for the female employees. There is also a tendency to see these changes in work practices from a very western perspective where access to high-speed internet, office equipment, and home space are both largely affordable and easy to adapt. However, this is not necessarily true for colleagues who live and work in large parts of Africa and Asia where, for example, having to upgrade your home internet connection to ensure that they are able to carry out video conferencing for their work can be disproportionately expensive compared to doing the same in a city in Europe.
A possible part of the solution for how we will change work in the future, is for organisations and their employees to recognise that there are unequal costs and benefits accrued by both parties in this situation. Organisations need to acknowledge that they can’t just shift operational costs to their employees and hope for the best for the future. What this could mean is a redistribution of the financial benefits from the organisation back to the employee that recognises these changes and the costs associated with them.
This could take the shape of two different types of payments to staff. Firstly, there needs to be the recognition that there is a financial cost to the newly homeworking employee which could be redressed through a one-off flat rate payment. The flat rate transfer would be a low transaction method of benefits redistribution and would also be of a proportionally higher value for the lower paid employees who are likely to be incurring higher costs of the switch in work practices.
The second option addresses the longer-term consequences of the future of our working practices and the principal-agent problem which likely to increase with the physical distance between manager and the managed. As discussed above, there is early evidence that productivity has remained stable and, in some cases, increased with the changes to homeworking. This could remain the case over time and productivity gains could continue to be identified as we change how we work and are managed. Incentivising productivity through tangible benefits[2] to the employee can create the longer-term sustainable productivity gains that organisations need to remain financially viable. Creating a bonus / incentive scheme isn’t just about financially rewarding your staff, this could and probably should take the shape of support for training or academic courses that have a direct career development impact for the employee, but also directly benefit the organisation through a higher skilled and engaged set of employees.
We have all put up with how we needed to work during this time as there was little choice for any party, but this crisis will end and some sort of different way of working and being will emerge. If we just concentrate on the current crisis and ignore what is coming, then we are just setting ourselves and our organisations up for another round of crisis in the future. What we need is to think about how we can reshape the future of work now, so we create new and sustainable ways of working with profitable responsive organisational cultures where the benefits of change are felt by all of us.
[1] Forbes article; https://www.forbes.com/sites/adigaskell/2020/12/08/productivity-in-times-of-covid/?sh=3dbc780e1fa1
[2] https://www.businessnewsdaily.com/8506-employee-productivity-incentives.html also see https://www.fond.co/blog/increase-employee-productivity/
