I just got off the phone with a friend who is good friends with the CEO of a European financial services firm with several thousand employees. During the COVID crisis, essentially all of those employees are working from home, just as my friend is doing. Said CEO found out one thing: it works. And well. So he has decided: Of those now working from home, maybe 3-4 percent will return to the office once the COVID crisis is wound up. The rest will be asked to mostly continue to work from home.
There is some academic research as to what this can mean in terms of productivity gains if done right.1 And, it has to be said, some skepticism has been voiced with regard to the special situation of COVID-19, because working from home has suddenly been forced upon people who unexpectedly have to double as guardians and teachers of their children which in turn have been evicted from their kindergardens and schools aso.2 But, as the real-world example mentioned above indicates, it appears to work even now.
So if, when the last COVID-caused ICU case has been resolved, just some firms initially adopt the approach that “our” CEO has already decided upon, it will gradually be adopted by most services firms for which such a model is suitable, because the remaining firms, for competitive reasons, cannot afford to ignore the productivity gains the approach can offer. According to the research cited above, while one can certainly not cling to exact numbers from one real-world, if large-scale, experiment, productivity gains can be expected to be nothing short of very substantial. And then think about the potential for not insignificant savings in rental expense for office space.
Daily lost living time for those still commuting to work will decrease substantially because of less-clogged traffic arteries.
People will have more time to do higher-value and more fulfilling things in their lives than driving to work, or pushed to (learn to) do higher-value and more fulfilling work than driving other people to work.
Those who may feel lonely at home because they miss social contact with colleagues (see the research cited above) may enjoy such contact during scheduled meeting times either in the much-reduced remaining office space or, better yet, in the café where the employing firm pays for the delicacies consumed. More importantly still, it may instill in them the desire and spur respective adequate activity to improve their private social life that one would assume is lacking somewhat when colleagues are the most important social contacts.
In countries like Italy, where beautiful historic buildings are currently used as mundane office space, a liberation of such space may lead to more affordable livable, lovable living space for many people. Of course, for real estate investment firms, the somewhat lower rents from residential instead of commercial occupants will mean a painful haircut, with repercussions also for financial institutions, so this will have to be a non-too-abrupt change.
Needless to say that everyone concerned about city-center air quality will welcome the reduced pollution resulting from reduced work-related commuting.
In short: productivity and profits significantly up, quality of life significantly improved. While we as humankind are still licking our short-term wounds from COVID-19, we can at the same time look forward to very significant improvements the pandemic may bring about for our livelihoods much sooner than many now expect. If we handle the opportunity well that has been forced upon us, those unbelievable creatures that are human beings may be able to turn COVID-19 into one of the biggest economic as well as societal success stories of our time.
Addendum, May 12, 2020
The above post was a spontaneous “outburst” after ending a telephone conversation.
We are currently, in a way unfortunately, extremely busy wrapping up development of our proprietary forecasting software on the one hand, and finalizing, concurrently, two major articles in the medical field, one on the systemic/immunological questions that COVID-19 has yet again posed with unwelcome vigor, poised to appear on loico, the other attempting at a systematic understanding of hippocampal functions – something which at every turn threatens to escalate into a topic that would warrant a title as encompassing as “The brain” -, and which we have agreed to submit to a peer-reviewed scientific journal.
So explaining in a satisfactory way why a perfectly spontaneous writing is something perfectly fitting for a website focused on actual logic will unfortunately have to wait a few weeks longer.
After writing the post, however, I could not refrain from doing a web search to see what others may have written on the topic. I found that while making working from home permanent has been discussed in a number of articles,3 and while “Fortune” has published a piece on the “Nationwide” insurance company4 planning similar things as “our” European CEO at about the same time as we have published the above post, it seems that, again, seeing the facts and connecting them in a logical way are often two different things.
While other articles typically mention some of the benefits of making “WFH” permanent, such as savings on office rental expenses and employee satisfaction, they do not draw the conclusion that this will very likely mean that medium-term the world economy will actually come out of COVID-19 significantly strengthened at its core, not weakened and headed for a depression as has been the pervasive public perception in recent weeks and months.
And when “Fortune” quotes the “Nationwide” CEO as saying: “At the end of the day, we looked at key historical events that shaped society: the Great Depression, the 1918 pandemics, WWI and WWII, 9/11, and the financial crisis. During these crises people reduced consumption, grew more frugal. After the crisis, worry continued and it was a permanent mindset shift. That’s really important. We think the world is changing. We’ve got to take cost out of the system. We want to enable sustainable growth,”4 then it strikes that he does not mention the fact that WWI and the 1918 pandemics were actually followed by the “roaring twenties”, and that he himself, in his stream of thought, clearly appears to make the connection between “taking cost out of the system” and “enabling sustainable growth”.
“Growth”, that is. Not depression._____
- See, for example, https://www.informationweek.com/strategic-cio/security-and-risk-strategy/cfos-covid-19-work-from-home-plans-may-be-permanent/d/d-id/1337576 and https://www.crn.com/news/running-your-business/some-may-work-from-home-permanently-after-covid-19-gartner