The Rise of the Remote Workforce – November 2021

As the COVID-19 pandemic shuttered the doors of organizations, it fundamentally changed the way that work was done. The pandemic forced both employees and employers to embrace the paradigm of “work from home” or “WFH”.

The impact this shift has had on the workplace is undeniable. While in February 2020, Americans on average spent 5% of their working hours at home, by May 2020, during the first round of COVID lockdowns, that number soared to 60%. Offices in downtown cores remain just over a third full and commercial centers remain substantially quieter than before the pandemic.i

Now, as organizations – including regulators – reopen, they will need to reckon with the role of WFH going forward. This article aims to provide regulators with the most recent research on WFH so that they are best able to adapt to this changing landscape.

Changing Attitudes to WFH

Perceptions about the future of work have undergone a paradigm shift. Much of the pre-pandemic hostility toward WFH has eroded.ii There are now a spectrum of attitudes across multiple industries, including workplaces that are requiring all workers to be back at their desks full time and those that are doing away with offices altogether.iii The result is that more organizations are receptive to WFH and that WFH arrangements will become more common in the future.

Why WFH?

Even after we can finally shed our non-medical face-coverings, WFH arrangements will likely remain.

WFH is tied to increased worker satisfaction. In one study, 80% of employees indicated that they would like to spend at least half of their hours working from home post-pandemic.iv Further, the “great attrition” has increased workers’ bargaining power.v For regulators who are dependent on a highly in-demand professional workforce, these concerns are worth monitoring.

Moreover, multiple studies indicate that WFH models may result in higher efficiencies than “office-first” models. A Statistics Canada study found that more than half of remote workers reported completing about the same amount of work per hour as before the pandemic, while over one-third indicated that they were more productive.vi Economists have ascribed this productivity increase to increased opportunities to focus, more effective coordination of teams through technology, and the elimination of commuting.vii However, regardless of its cause, this is clearly a trend which regulators can capitalize upon.

Finally, there may be larger benefits to WFH which cannot be ignored. WFH has been tied to improvement in a range of other socioeconomic indicators: worker-wellbeing, gender equality, housing accessibility, and reduced fossil fuel emissions, to name a few.viii

So Why Bother with Offices at All?

Though in its infancy, research indicates that pure WFH might have some significant weaknesses in terms of organizational culture.

A study of 60,000 Microsoft employees in 2019-2020 suggests that remote work makes collaboration more “static and siloed.” While workers continue to interact with close contacts and teammates, they interact less frequently with others. This makes information sharing across an organization more difficult.ix

WFH might also decrease “knowledge flows” in an organization.x This can result in employees having trouble learning and acquiring new skills. Additionally, WFH reduces “chance encounters” between individuals with different perspectives working on related problems. In this way. WFH may ultimately result in a loss of “collective knowledge” in an organization and, ultimately, has the potential to reduce long-term productivity and innovation.xi

Given that regulators are multi-faceted organizations tasked with regulating complex and dynamic areas, the potential impacts of WFH on their organizational culture, and especially their ability to innovate, should not be overlooked.

Post-Pandemic Work

While “work from home” defined the pandemic, the future is “work from anywhere.”xii This reflects the trend that employers will likely need to give employees the freedom to choose where to work, whether in the office or remotely.

Trends indicate that “hybrid” WFH arrangements will persist in most organizations with employees returning to the office on specific days, or only for specific meetings or events.xiii For most firms, this seems to give employees the freedom and convenience they desire from WFH models, while mitigating any potential long-term risks to organizational culture, productivity, and innovation. These models may also allow organizations to reduce their physical footprint, thereby resulting in significant cost savings.

While it is impossible to determine which model is best for any given regulator, the following five key factors ought to be considered by regulators when developing their WFH strategy:

1. Organizational Size: Smaller regulators may be less able to scale the costs and benefits of remote work, both in terms of WFH structure and organizational culture. Regulators should consider how widespread WFH will become at their organization to ensure their strategy is scaled to demand.

2. Resources: Significant resources are required to establish a robust WFH infrastructure that promotes efficiency and employee satisfaction. Regulators must consider the costs of establishing and operating WFH systems – a glitchy system is worse than no system at all.

3. Employees: Regulators must consider which employees will be able to work remotely, and to what degree. Generally, employees tasked with building stakeholder and client relationships, negotiating key multidisciplinary decisions, and teaching and trainingxiv are ill-suited to WFH arrangements.

4. Organizational Culture: Regulators should consider their current organizational culture and how it might be impacted by the introduction of WFH options. This information can be used not only to inform a regulator’s WFH model, but also to develop strategies and initiatives to retain positive elements of organizational culture.

5. Learnings from the Pandemic: Regulators should not ignore the fact that, during the pandemic, all employees worked remotely to some degree. Data from that period can be used to inform a regulator’s WFH strategy by gauging the effect that remote work might have on employee satisfaction, employee performance and organizational culture.

i “Remote-first work is taking over the rich world”, The Economist (Oct 30, 2021): https://www.economist.com/finance-and-economics/2021/10/30/remote-first-work-is-taking-over-the-rich-world

ii “A bright future for the world of work”, The Economist (Apr 8, 2021): https://www.economist.com/special-report/2021/04/08/a-bright-future-for-the-world-of-work

iii “The future of Silicon Valley headquarters”, The Economist (Jul 1, 2021): https://www.economist.com/business/2021/07/01/the-future-of-silicon-valley-headquarters

iv Tahsin Mehdi & René Morisette, “Working from home: productivity and preferences” Statistics Canada (Apr 1, 2021): https://www150.statcan.gc.ca/n1/pub/45-28-0001/2021001/article/00012-eng.htm

v“‘Great Attrition’ or ‘Great Attraction’? The choice is yours”, McKinsey Quarterly (Sep 8, 2021): https://www.mckinsey.com/business-functions/people-and-organizational-performance/our-insights/great-attrition-or-great-attraction-the-choice-is-yours

vi Mehdi & Morissette, note 5.

vii The Economist, see note 1.

viii “Productivity gains from teleworking in the post-COVID-19 era: How can public policies make it happen?” OECD Policy Responses to Coronavirus (COVID-19) (Sep 7, 2020): https://www.oecd.org/coronavirus/policy-responses/productivity-gains-from-teleworking-in-the-post-covid-19-era-a5d52e99/

ix Lonnie Yang et al., “The effects of remote work on collaboration among information workers” Nature Human Behavior (Sep 9, 2021): https://www.nature.com/articles/s41562-021-01196-4 x OECD Policy Responses to Coronavirus (COVID-19), see note 9.

xi Ibid.

xii Kelsey Rolfe, “‘Work from home’ defined the pandemic, but the future is ‘work from anywhere’” Financial Post (Sep 14, 2021): https://financialpost.com/fp-work/growing-number-of-companies-stepping-up-remote-work-policies-with-the-option-to-work-from-anywhere

xiii “Office re-entry is proving trickier than last year’s abrupt exit” The Economist (Jul 1, 2021): https://www.economist.com/business/2021/07/01/office-re-entry-is-proving-trickier-than-last-years-abrupt-exit; “What’s next for remote work: An analysis of 2,000 tasks, 800 jobs, and nine countries” McKinsey Global Institute (Nov 23, 2020): https://www.mckinsey.com/featured-insights/future-of-work/whats-next-for-remote-work-an-analysis-of-2000-tasks-800-jobs-and-nine-countries

xiv McKinsey Global Institute, see note 14.