Policymakers may be underestimating the power of remote working to boost productivity.
I have been saying for a decade that working from home could allow businesses to save on office space and have access to better workers.
I know this for a fact, as all of the Capital Business Media group of companies have operated a hybrid business model since 2011. This has resulted in staff satisfaction and productivity improving the output of each of the companies and unlocked the ability to provide higher pay rewards for workers which in turns allows for us to attract the best talent.
I’m not pleased that Michael Saunders, an external member of the rate-setting monetary policy committee agrees with me as in its latest Monetary Policy Report, the Bank said that more remote working could weigh on productivity because it might damage the quality of collaboration and communication between workers. However, Saunders said: “The effects of working from home on potential output during the pandemic may turn out to be less one-sided than assumed in the February Monetary Policy Report. Moreover, a persistent increase in working from home seems likely and may well actually support potential output over time.”
Saunders said that forced homeworking was weighing on the economy because it was not suitable for all jobs, but this was likely to be replaced by a hybrid model. “While a shift to widespread compulsory full working from home probably is not optimal, working from home offers a range of possible advantages for some firms,” he said. “It is likely to allow some firms to access a wider pool of staff (for example, people that cannot easily get to a specific work location), and . . . lead to reduced absence from sickness.”
He said some workers were more productive at home because there were fewer distractions. It also could lead to a better work-life balance, which could increase staff retention and reduce costs linked to high staff turnover.
Richard Alvin