Over the previous two weeks, our look back at 2020 has reflected on developments in Public Health and Equality. This week, we will consider the changing world of work in 2020.
The COVID-19 pandemic was probably the most significant disruptor of the world of work since the Industrial Revolution.
Working from Home
The first obvious development was the move to home working. In April 2015, 4.3% of people mainly worked from home. This steadily grew to 5.1% in 2019, although approximately, 25% described themselves as working from home at some point. Due to Covid-19, in April 2020, 49.2% of adults were working from home.
There is plenty of evidence to suggest that this percentage stayed high throughout the year, and certainly higher than the Government liked at some points, as it sought to cajole office workers back into their offices towards the end of the summer. Of course, for those companies which had their digital infrastructure in place, the move from office to remote working was seamless, but other less progressive companies suffered severe dislocation because of the change.
On-line Retail
It was not just this increased homeworking though, which changed the world or work. How consumers purchase products or access services, determine other people’s work prospects and the world of work.
The most obvious example of this was shopping. Like working from home, on-line shopping had been increasing, but the pandemic really accelerated this trend. There were more new on-line grocery shoppers in 2020 than in the previous five years and initially, on-line delivery companies struggled to cope with the rise in demand, until they could increase their capacity.
Interestingly enough, the pandemic brought a surge in baby boomers choosing the on-line grocery option. Over half of 55-year-olds plus now shop on-line for their groceries and 74% bought food goods over the internet and the message from this group is that many do not intend to return to the shops after the pandemic is over.
There are similar trends for on-line shopping growth for all sorts of other products. The result of this and remote working has delivered a double whammy to those high street shops and businesses. 176,718 retail jobs were lost in 2020, but many different jobs have been created. Logistics specialists, warehouse operatives, drivers and IT specialists have benefitted from this shift, whereas, shop workers and hospitality workers, whose roles made up 20% of the total job losses in 2020, have paid the price.
Furlough
COVID-19 has not just impacted whether somebody has a job or not. It has impacted the terms and conditions of many workers who have had previous contracts terminated and have been re-engaged on lesser terms as their employers sought to reduce costs.
2020 was also the year when a new word entered the vocabulary of many people – Furlough. The Government’s Furlough Scheme was used to support approximately 10 million employees; one third of the UK workforce. It needed to be put in place, because there simply was not enough work for people to do. Consumer spending power in the economy would have dropped through the floor without it, and there could have well been civil unrest caused by the number of destitute people if the furlough scheme had not been put in place.
Despite furlough though, 2020 will be remembered as the year when redundancies flowed and unemployment levels rose. This was not, however, a uniform problem across occupations. It would be easy to look back and assume that everybody lost economically in 2020. This would be an incorrect assessment though. There were losers, but there were winners too.
The Future?
So, what does this all mean for 2021 and beyond? Well, in terms of homeworking it is highly unlikely that things will stay as they are, but it is also highly unlikely that things will go back to where they were before. My assessment is that we are reasonably likely to see a higher percentage of the workforce continuously working from home or remotely, but that it is highly likely we will see the emergence of a ‘hybrid’, fluctuating mix of home and remote working to meet the needs of employers and employees.
Already, a significant number of large corporations have declared that they will never go back to full-time office working. Why would they? Large offices in cities are expensive to lease and run. If these companies have good digital connectivity, which has proven to work well over the past year, it is a sound decision. After one year of remote working, the more progressive companies have also found innovative ways to build teamworking amongst their remote workforce.
In terms of employees there is plenty of anecdotal evidence to suggest that there has been a shift in mindset here too. It is true that for many homeworking has been a very difficult experience and they will want to return to the office, but others have seen a new life and will want to maintain it. Less time lost from commuting, lower contributions to greenhouse gas emissions, other reduced costs when working from home, a greater integration of life and work, and a much more casual dress code appeals to many.
There is evidence from both recruitment companies and estate agents that people are looking to burn their bridges and protect their newfound lifestyle. Numbers of people are selling their commuter properties and looking for more green space to make the shift permanent. There is strong evidence of a growing willingness to change employer 2021 too, if necessary, to hold onto their newfound lifestyles.
2021 then will be a complex mix of realities and aspirations in the employment market. There will be sectors which will shed employees after the furlough support ends, but equally, there will be sectors which are desperate for employees. Employers who want to attract and retain scarce talent may well need to be open to extensive homeworking. Employees who find themselves less in demand may well have to work in a way they would not choose to. With this uneven situation regarding supply and demand, leverage will drive conditions.
However, it is my view, that there are several further factors which will drive the world of work inexorably towards high levels of remote working. These include:
- The growth of the knowledge economy, the service economy, the gig-economy and a digitally based, sharing economy with their utilisation of knowledge workers.
- Value increasingly residing in non-tangible assets such as knowledge, creativity, brand values, goodwill, networks and intellectual property.
- The rapid development of technologies enabling remote working.
- A newfound readiness on the part of employers, employees and consumers to use such technologies.
Work being a place was solidified with the advent of the industrial revolution and the crowding of lone and agrarian workers into factories containing physical assets, which needed to be harnessed by people, usually between certain times of the day.
With knowledge becoming the predominant factor of production now and technologies supporting remote connectivity, for many work is no longer a place, it is an activity. Not an activity which necessarily needs to be conducted between 9am to 5pm either, but one which can be integrated with life on a bespoke basis. This pandemic has acted as a catalyst for this change in the UK.
The furlough scheme was undoubtedly the most significant state intervention in the labour market since the Second World War. The country was in a position where there was simply no work for a large part of the workforce. The link between citizen, work, income and consumer activity had been cut and this was likely to have catastrophic consequences both economically and socially. On this basis it made sense to pay people to stay at home.
The link I make from this is to the notion of a universal basic income. I recognise that Furlough payments were not uniform, that they were linked to pay, but there was a ceiling. There are many observers who speculate that with the exponential rise of new technologies, there is the prospect that technologies will reduce employment until the link between citizen, work, income and consumer is cut for many in society.
To allow this to happen without intervention is likely to cause massive economic disruption, let alone social problems. Was the willingness to embrace furlough in 2020 a foretaste of what is to come, if the technological revolution impacts the labour market as some believe? Will a universal basic income, an unconditional monthly income paid to all adults, whether they are working or not, become the new furlough at some point in our future?
There will be some reading this article who will never have heard of the idea of a universal basic income and will consider the notion far-fetched. They should reflect though that our whole economic model works on the link between work and income and if the work disappears due to technological developments, that link is broken.
This becomes not just a problem for individual citizens, but for the whole economic functioning of our society. Reflect also, that Switzerland has already had a referendum in 2016 on the proposal to introduce a universal basic income. The proposal to introduce one was lost, but 23% voted for it and it is only likely that support for such an approach will grow if technology does really begin to take our jobs.
What does all this mean for employers in 2021? Well, again, employers need to think seriously about where their organisation is placed in this context, in terms of the nature of its work and its ways of working. Businesses need to consider what their position is in relation to talent attraction, motivation and retention and what the talent they need is likely to want. In the light of this, they will need to consider what their policy is on homeworking, both generally and in the case of responding to individual requests.
They will also need to think about how homeworking can be supported and, of course, make sure that they have the management practices in place to ensure legal compliance around factors such as risk assessments, supporting employee health and wellbeing, and data protection.
If your organisation needs any assistance with this, please do not hesitate to contact either our Employment Law team, or our Human Resource Consultancy, Forbury People.
Prefer to Listen? Then check out our Mini Series Podcast on Employment & HR in 2020:The Changing World of Work