You will be spending a lot more time at home, at least if you are part of the highly educated, well-paid minority of the workforce. That’s according to a new study by the McKinsey Global Institute which found that one in five people in the workforce could work remotely three to five days a week just as effectively as if they were at the office.
The findings are contained in a new discussion paper called What’s next for remote work: An analysis of 2,000 tasks, 800 jobs, and nine countries.
- Read more: What’s next for remote work: An analysis of 2,000 tasks, 800 jobs, and nine countries (Source McKinsey Global Institute
According to the authors Susan Lund, Anu Madgavkar, James Manyika, and Sven Smit, “Our analysis finds that the potential for remote work is highly concentrated among highly-skilled, highly educated workers in a handful of industries, occupations, and geographies.”
Even if just 20 per cent of the workforce shifts to work from home arrangements even for just a few days a week, the impact on urban economies, transportation, and consumer spending, would be, in the authors’ words, profound.
Right now, typically about 5 to 7 per cent of workers in advanced economies work from home on a regular basis but if that were to grow to 15 to 20 per cent the nature of cities would start to change.
“More people working remotely means fewer people commuting between home and work every day or traveling to different locations for work. This could have significant economic consequences, including on transportation, gasoline and auto sales, restaurants and retail in urban centers, demand for office real estate, and other consumption patterns,” the authors write.
Hospitality, logistics, and commercial property would be especially disrupted.
For instance, when McKinsey and Company spoke to office space managers in May it found those managers expect a 36 percent increase in work time outside their offices.
“This means companies will need less office space, and several are already planning to reduce real estate expenses.”
The paper also quotes Moody’s Analytics which predicts that the office vacancy rate in the United States will climb to 19.4 percent, compared to 16.8 percent at the end of 2019, and rise to 20.2 percent by the end of 2022.
Furthermore, they reveal that a survey of 248 US chief operating officers found that one-third plan to reduce office space in the coming years as leases expire.
Already the trends are driving significant corporate behaviour. The McKinsey paper says that REI will sell off its new corporate headquarters before even moving in. It is shifting its emphasis onto satellite offices instead.
However, not every company is reacting in the same way. “Amazon recently signed leases for a total of 900,000 feet of office space in six cities around the United States, citing the lack of spontaneity in virtual teamwork, “ say the authors.
Amazon’s experience reveals that the shift to WFM carries its own risks and costs.
According to the authors, “Many physical or manual activities, as well as those that require use of fixed equipment, cannot be done remotely. These include providing care, operating machinery, using lab equipment, and processing customer transactions in stores.”
The study also reveals, not surprisingly, that while some tasks can be done remotely in a crisis, they are much more effectively done in person. “These activities include coaching, counseling, and providing advice and feedback; building customer and colleague relationships; bringing new employees into a company; negotiating and making critical decisions; teaching and training; and work that benefits from collaboration, such as innovation, problem-solving, and creativity.”