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What is the future of working from home? - The Global Story podcast, BBC World Service
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Hi there. I'm Caitríona Perry, and this is The Global Story.
At the height of the Covid 19 pandemic
the working world went through a revolution.
Workers, particularly white collar office workers,
were ordered to work from home to stop the spread of the virus,
and it seemed like a permanent change.
Hybrid working has remained incredibly popular
years after the Covid lockdowns were lifted.
But now more and more companies are ordering employees back to work.
And many employers have slammed working from home as inefficient and bad
for the bottom line.
So is the work from home revolution over now?
Joining me from London is the BBC's employment correspondent, Zoe Conway.
Hello. And also with me,
Nick Bloom, an economist at Stanford University in the US,
who has studied the effect that all of this is having on productivity.
Hey there. Great to have you both with us today.
Now, before we go any further, I just want to establish the status here.
Are you working from home or in the office?
Nick. You first.
I'm actually at home.
Although I have to say,
for me, it's 8:00 in the morning, so I am going in later.
But right now, yes, this is the spare bedroom.
But ordinarily you're in the office full time?
When I teach. So I teach obviously students because I'm at Stanford.
That's definitely in person.
Big meetings is in person,
but I do spend a couple of days a week on zoom
taking calls, working from home.
And what about you, Zoe?
I'm definitely at the BBC today.
I like coming into the office.
Actually, I work with a team of incredibly clever, interesting,
and funny people, and I like the camaraderie of the office.
But I travel around the UK for work quite a lot as well,
so I don't really work from home.
Okay, so we've established where you both stand on the working from home.
I obviously am not working from home.
Can't be a presenter and work from home unfortunately,
although I did suggest it from time to time during the pandemic.
But before the pandemic I was working here in the US
and I mean, it was really very rare in this country
that you would have encountered anyone really working from home.
Nick, are there certain countries or certain industries
that have always had this tradition of remote working or working from home?
Yeah, so tech has always been pretty work from home friendly.
So you can think of if you're on a keyboard using computers,
you often don't need to be in the office.
You know, it's also actually interesting
that a lot of English speaking countries, it's not clear why,
but you're right. Northern Europe,
Canada, UK, Australia, New Zealand have been pretty high.
We tend to see the lowest levels in Asia.
So there are big international differences.
So Asia you know typically back in the office pretty much full time,
but northern Europe, US, we still see tech, some finance
working from home two or three days a week.
But of course, everything changed for everyone, didn't it?
In the spring of 2020,
with the arrival of this thing we'd never heard of before. Covid 19
and the pandemic and how that changed everything at that time.
Governments rushing to announce stay at home orders, lockdowns to try
and keep everyone away from each other and limit the number of infections.
It was a crucial step, we were told at the time,
to keep the hospitals from getting overloaded and to get everyone safe,
and suddenly employers had to adapt to a situation
where their employees could not come into work.
So tell us a little bit about that transition.
Who was working from home and who wasn't,
and what did it all mean for people?
It was the most incredible adjustment for so many of us.
There were all these forms of technology we'd never used before,
whether it's zoom calls or team chats
that some of us are still fairly useless at using.
certainly in my unit,
Everyone still mutes themselves.
Everyone seems to be on mute.
So it was an incredible adjustment.
And I think what we're seeing in many cases in the UK
are people who have learnt that they can be very productive at home
and that they can juggle it very successfully with, you know,
perhaps raising a young family or looking after elderly relatives.
And so there's a lot more flexibility that we're seeing.
But I think there's still a huge amount of uncertainty here in the UK
about whether we're going to see a big switch back.
Because as well as having more time with your family and your children.
I mean, there are other benefits for people from working from home as well.
Financially commuting time.
Tell us a bit about those.
We went to Bank underground station.
Now that is right in the heart of the city in London.
It's the sort of place where you're going to see a lot of people
very smartly dressed,
walking incredibly fast to get to their law firm or their bank where they work.
And we went on a Thursday morning and we went again on a Friday morning
during rush hour.
And there was a big drop in numbers.
And the data shows that now on a Friday, if you go
to Bank underground station, you'll see that the commuters are roughly
at just just over half what they were before the pandemic.
So a big drop.
Nick, on that point, I mean, individuals might save
because they can make their lunch at home.
They're not spending on fuel for their cars, train tickets and so on.
But what's been the economic impact on businesses
from this situation where people are working from home?
Well, there's two ways to look at it.
Mostly for businesses hybrid, which is when you come in,
say two or three days a week and work from home two or three days a week,
it's actually pretty profitable, and it's why it's stuck.
It's why if you look at the Fortune 500.
So these are the largest 500 companies in the world.
80% of them are on hybrid because it makes them a lot of money.
And why is that?
Well, if you look at the research,
if you work from home a couple of days a week,
it doesn't really seem to damage productivity.
So, yes you need to be in for mentoring, for connectivity,
for building culture, for innovating.
But by the time you're coming in three days a week,
it looks like you kind of have your fill.
And the other two days are good for quiet time
and for recharging without a commute.
So productivity is not affected.
What businesses gain is turnovers a lot lower.
So in one study we published actually last year in Nature,
you see quit rates fall by about a third.
And you know you can see why like folks are like
'I really like working from home a couple of days a week.
I'm less likely to change jobs.'
And for businesses, that saves them an enormous amount of money
because every person that quits, you've got to go out.
You've got to re-interview, rehire.
And has that passion been replicated across the world?
This moved from a full time working from home to that hybrid model
you're talking about.
If you look at Southern Europe and Asia, take Tokyo.
There's very little working from home going on.
So Tokyo is kind of unchanged.
It's a weird world, you know, in 2019,
these cities look similar.
Suddenly, five years later, you know, six years later,
we've now seen a surge of work from home in much of Europe and the US,
and pretty much everyone's return to the office in Asia.
And so what has that meant for how people might move between jobs
if you can potentially be working from home
for a company that is no longer based in your town or in a nearby city,
as may have been the case in the past
when you sought employment adjacent to where you live.
I think there has been a shift in terms of the balance of power that
when you apply for a job, it has become the norm to ask for flexible working,
or certainly more normalized and to expect it.
Zoe is exactly right.
It's funny talking to recruiters.
They said, look, pre-pandemic, if you're recruiting folks,
you tell them about the salary and obviously the role,
but they're always going to ask about the perks.
And, you know, there's the big two, which is pension
and is there any kind of health care plan. Now they said,
look, it's the big three. Pension, health care plan and work from home.
And so yes, it's become a critical part of recruitment.
Then normal numbers that I hear from recruiters I see in research is 8%.
So folks say look, if I can be hybrid,
you know, I'll accept basically 8% less pay to be hybrid
versus come in the office five days a week.
So you can twist it around and say,
if you're a boss and you want your folks in five days a week,
you have to pay people basically 8% more.
So what are the major negatives that have been reported to you
from employers?
We went and interviewed the CEO of a record label in East London,
and he set up this company himself.
It's his baby, and he has a lot of young staff.
And it's interesting because he's been allowing
his young workers to be at home coming in for two days a week,
and he's now asked them to come back in for three days a week.
I can't help but have this nagging feeling
that sort of continual remote working has affected our bottom line.
It's his business, and he feels
that it's the kind of industry where people can and should be
networking, should be part of this team.
Not just in spirit, but but physically together
sharing ideas.
And I think he also wonders about what effect it's having on
the mental health of his young workforce to be at home too much of the time.
You know, I firmly believe that the music industry is all
about relationships.
And so the one single way to really, for any of us to be able
to build those kind of meaningful relationships is to do it in person.
Perhaps for him, it's a bit of a slight sense of loss of control
that he just doesn't quite know what everybody's up to.
Which I think he might feel is a bit of a disadvantage.
And he found it difficult to just be communicating via,
you know, video conferencing.
So I think there are some disadvantages that he would say.
Do those arguments extend out to the point where the whole economy would benefit
from everyone being back at work, what did you find?
For an in-depth bit of reporting for the BBC
that I've been doing in recent weeks, we spoke to Lord Stuart Rose,
and he used to run two of the biggest retailers in the UK,
supermarkets called Marks and Spencers and Asda,
and he came out very strongly in favour of people coming in
for most of the time.
People who drive trains have to go to work.
People who work in operating theatres have to go to work.
service industries like retail have to go to work and others don't.
Well, you know, what's different?
They have children, they have problems.
They have issues. You deal with it.
And what he said to us was that he just thinks it's really bad
for productivity in the UK.
It's really bad for economic growth in the UK
if people are spending too much time working from home.
Do you want to jump in there with your stats and research?
There's a number of folks who can only work
if they're allowed to work from home.
So we see in the data that employment of folks with a disability,
people looking after young kids,
folks close to retirement, has been surging post-pandemic.
And this is, you know,
hundreds of thousands of millions of people literally, who can work.
And if they're working, they're paying taxes, providing goods
and services for the rest of us.
And that's a win win.
So actually, I think these are typically,
you know, kind of older in their career CEOs, typically men,
if you look in the data who are very against work from home,
you know, they're judging on their experience.
That might have been right 20 or 30 years ago,
but in 2025, it's actually good for the economy.
And that's interesting that there are certain jobs that can only be done in the workplace,
but there are certain people who can only work if they're at home.
And it's sort of setting up a bit of a divide between workers.
I mean, just to to broaden it out a little bit.
We heard Elon Musk, of course, aide to President Trump
and billionaire businessman tell CNBC recently that not only did he think
working from home made people less productive.
He also thought it was a symbol of class division between white collar
and blue collar workers to use those terms.
Nick, what do you make of that argument?
Well, you know, Musk's views are really problematic.
So I'll give you an example.
There's someone I was speaking to last week who
a couple of years ago, broke their neck in an accident.
And so he used to be, you know, pretty senior exec.
Poor guy is now basically disabled from the neck down.
And he said, look, if I've got to go into work,
it takes me about three hours and I was like three hours?
He said, yeah, my carer has to get me up,
wash me, get me dressed, take me to the car.
And then my dad would normally drive me into work.
He said if I can work from home, it's about 20 minutes.
Now, this is someone that's highly productive.
If you force someone like that to come into work every day,
he said, to be honest, I'd probably stop working.
And so the Musk view of trying to turn it into a crusade
to force everyone back to the office is going to lose folks like that.
People with young kids,
folks close to retirement and is a loss to all of us.
You know, if there are more people working and paying taxes,
it's less taxes for the rest of us to pay.
Nick, why do you think this has become such a politically charged issue?
I mean, it's almost a cultural issue here in the US.
And obviously, as we've been talking about, it's a huge issue in the UK
at the moment now as well.
Politics comes into everything eventually.
Unfortunately, and politics has come into work from home.
It's pretty natural in a sense,
because if you look at who can and who can't work from home.
So think about who can work from home.
They tend to be university educated folks.
They tend to be professionals, managers.
They're higher earners.
You know, they tend to have a certain type of politics.
And at the other end, who can't work from home tend to be
they're more likely to be frontline service workers.
Maybe they left school at 16 or 17.
They're lower earning. Certainly in the US.
that group tends to vote for Trump.
And as a result, if you're Trump or Musk,
your vote base is people that can't work from home.
And it's appealing to then ban work from home because it appeals to the base.
You know, if you can kind of poke in the eye
the other half of the population, it's a win for your base.
So you tend to see populist parties that tend to appeal to
lower income, more kind of frontline service workers, frontline workers.
They tend to be against work from home.
And if you look at parties that tend to have more university educated people that have office jobs,
they tend to be more supportive of work from home.
And, you know, sadly, that's nothing about whether it's good or bad.
It really just predicts who votes for these
politicians and politicians know who their voters are
and they appeal to them.
And I suppose the other side of things,
though really is that some countries are actually taking steps
to make remote working part of workers' rights or workers' entitlements.
Spain has guaranteed the right to flexible arrangements.
Last year, Ireland made a legal right to request to work remotely,
and the UK government is including the right to work from home
in an upcoming bill.
So there are places
where working from home, the right, is being protected, aren't there?
That's right. In the UK,
the Employment Rights Bill is going through Parliament right now.
It's due to become law in June.
But the critical question is how this is going to be implemented,
because there's something that's going to have to be worked out,
a code of practice over the next year or so.
And that means there's going to be yet more consultation.
And there is concern by campaigners who want to see more flexibility,
that business is going to lobby government hard
and reduce the amount of working from home that's made possible by employers.
So I think it's really still up for
grabs and the government at the moment is desperate to prove to
business that its number one priority is economic growth.
So I think it's a bit unclear at the moment exactly how
this legislation is going to be implemented, how it's going to work,
and whether it is actually going to increase flexibility at work,
whether it's really going to lead to an increase in the number
of people working from home.
Okay, so final question.
After all that we have been discussing here,
what do you both think the future of work will look like?
Will hybrid work be as popular ten years, even five years from now
as it is as we're talking today?
Nick, what's your final thought on this?
So working from home is going to follow a Nike swoosh.
So you know it dropped from 2021 - 2022.
It fell pretty clearly.
It's now in the flat bit. We can see in the data.
It's not really changed for the last year and a half. Long run, it's up.
So you know 2030 work from home is going to be higher than it is now.
Why is that?
Three drivers.
One is companies have office leases
and they last typically 10, 15 years as they expire.
Companies think, oh, now's a good time to downsize.
And we've been seeing that. Two is younger CEOs,
younger firms tend to be more remote.
And as current CEOs kind of age out, retire and replaced by younger folks,
they're more sympathetic.
And finally, actually most importantly is technology.
I'm in my 50s.
I grew up in the UK in the early 70s,
and both my parents worked for the British government, actually.
And I remember as a kid, one of four kids, occasionally my mum
or dad would have to work from home because there'd be something,
I would be sick off school or something.
And I was talking to them the other day
and my mum was saying like, it was terrible.
You'd have to be carrying in the 80s piles of paper home
you could phone in to work,
but it's really expensive.
And technology's just got ever better.
So in the 90s we had computers.
We then got the internet, cloud, you know, video calls, all of this stuff.
If you look 2030, it's probably going to look
like the Star Wars Jedi Council with holograms and amazing headsets,
and it's just going to be easier to work remotely.
So what do you think?
Where will working from home or hybrid working be in ten years, say, from now?
I think there's a really interesting question about
what do companies in this country really think about working from home?
How many CEOs think like Lord Rose?
But don't say so publicly.
I say that because working in the business unit here at the BBC,
you hear things and I've been talking to colleagues about this,
and they think there are probably more chief executives out there
that want their workers back in more,
possibly back in full time than are actually letting on.
We do hear that anecdotally in the business unit.
So I think there's a bit of a question there
about how the chief executives of our biggest companies think about this.
But I also think there's another question in terms
of what this is going to look like in, let's say, five years time.
And that's just the state of the economy, the state of the labour market.
It's a supply and demand thing at the moment.
Workers seem to have more power to demand these things.
But let's say there's an uptick in unemployment.
Let's say it's harder to find work.
Will that balance shift back towards employers?
And so for those employers that don't want their staff working from home,
will it be easier for them to say no
because there's a bigger pool of people looking for work?
I think those are two things we're just not really clear about at the moment.
Fascinating discussion.
Thanks to you both for being here. Thank you.
Thanks very much for having me.
Thanks for being with us.
If you want more episodes of The Global Story,
find us wherever you get your podcasts.
Every day we do a deep dive into a single international story.
Subscribe to make sure you never miss an episode.
And if you want to, do leave us a comment in the section below.
Thanks for watching. Bye bye.
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