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By Guest Blogger Doug Rowat
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“How much longer will work from home be a thing?”In a year that’s featured a global pandemic, a global recession and the ensuing onset of massive market volatility and the fastest bear market in history, you would think that the questions from our clients would only revolve around their finances and portfolios. Indeed, such questions are frequent, but surprisingly, what I’m most often asked is simply: when will work from home finally end?
There is, of course, no certain answer to this question and the asking of it is usually based on entirely different motivations—one client may ask because they can’t stand the daily grind of their kids invading their makeshift home office like the zombies scaling the walled city in World War Z, while other clients ask because they simply love sitting in their pajamas at 3 pm not having showered for days. But either way, the desire for an opinion on the future of work from home remains strong.
First, it’s important to be aware of who’s actually able to work from home. According to StatsCan, only about four in 10 Canadian workers have this flexibility. As you would expect, labour-intensive industries such as mining, manufacturing or construction have limited work-from-home opportunities. Similarly, industries that require plenty of face-to-face interaction such as health care or food services face similar work-from-home difficulties. Workers in all of these industries, sadly, face a dire choice: suffer financially or endanger their health.
So, when we speak of working from home, we’re mainly talking about knowledge workers with computer-based jobs. Generally speaking, the more your job strays from this model (a job that requires physical labour, frequent travel or close social contact, for instance) the more the opportunity to work from home diminishes:
Telework* capacity by province and industry
Click to enlarge Source StatsCan; Telework and work from home are used interchangeably by StatsCan
Incidentally, you could reasonably invert this chart if you were ranking worker fortitude and bravery, meaning that the milquetoast finance guys, such as myself, who presently reside at the top of the chart and work away on their laptops from the safety of their back decks are, admittedly, wimps. Labourers and frontline workers put us to shame.
However, in estimating how long work from home may last, it’s the knowledge-based industries that we’re mainly addressing. For financial-service workers in particular, there’s a sense across Bay Street that we’re not returning to the office until the spring of 2021 at the earliest. Anecdotal evidence, along with the official announcements thus far from the big banks, support this:
Canadian banks are saying your home is your workplace until 2021
Source: Bloomberg
At the moment, the primary factors driving the work-from-home decisions at the big banks (I sincerely hope) are worker safety and a responsible desire to prevent the spread of Covid-19. However, the longer this goes on, estimating a return to the office may not be based simply on the probability of an infection, but rather on pure economics.
Working from home has been a grand experiment. And the main unknown for employers has been whether productivity would suffer. However, early results seem to indicate that employers have been reasonably satisfied with remote-worker productivity and the majority of these workers themselves also report being more productive. Will this last? Who knows, but what’s not in dispute is the immediate cost savings that this work-from-home arrangement is providing corporations.
According to Global Workplace Analytics, a research firm that studies the future of our working world, work-from-home initiatives during the Covid-19 crisis are saving US employers more than US$30 billion per day. Global Workplace notes that corporations may save more than US$500 billion per year in real estate, electricity, absenteeism and turnover costs alone. This doesn’t even include money saved on utilities, janitorial services, security, maintenance, office equipment and furniture, office supplies, parking spaces and travel subsidies.
The absolute cost-saving numbers would be smaller in Canada, of course, but the source of the savings would be identical. And don’t think for one second that companies, including our big banks, aren’t crunching these numbers. Web-conferencing, cloud technologies, secure laptops, WiFi and so on are allowing our working world to be reshaped in unexpected ways during this crisis. And when technology changes our world, the first to figure out how to save a few bucks are always the corporations. When was the last time, for instance, that you didn’t speak to a bot when you called your bank?
So, you may be perfectly happy sitting in your Ikea home-office, half-dressed and struggling with your Zoom connection, but there’s a good chance that your employer is perfectly happy to have you sitting there too.
Doug Rowat, FCSI® is Portfolio Manager with Turner Investments and Senior Vice President, Private Client Group, Raymond James Ltd.