Working from – effects in the labour market and economy as a whole
The pandemic has led to a huge expansion in the trend towards working from home. The longer the pandemic lasts, the higher is the probability that the sharp increase in remote work will remain as a lasting effect.
Such a revolutionary change in the daily routines of hundreds of millions of employees worldwide has the potential to create major consequences in many different areas, both in the labour market and in the economy as a whole.
Reduced need for passenger transport
For example, an increase in remote work will reduce the need for passenger transport, which in turn will adversely affect everything from auto sales to the taxi business and civil aviation which has already become apparent. Meanwhile reduced travel is positive from a climate standpoint.
Decreased demand for city centre flats
Perhaps the most obvious effect of letting people work from home is that the need for office space will shrink, and this space can instead be used for more housing in major cities. While the disappearance of offices will lead to an increased supply of city centre flats, remote work will also result in less demand for such flats as the advantages of living close to the office diminish. This may eventually help narrow the price differences between housing in city centres and suburban or rural areas.
Freedom to choose where to live
Remote work can open up completely new opportunities for people to choose freely where they want to live. According to a recent Kantar Sifo opinion survey, three out of four respondents in Sweden hope the pandemic will lead to changes in their work situation. Topping their wish list is greater opportunities to work from home.i Another Kantar Sifo study shows that nearly four out of ten office workers would consider moving if the trend towards better remote work opportunities continues, and 5 per cent are even thinking about performing their job from abroad.
Competitive advantages disappear
In the traditional employment model, an employee is usually required to physically report to a workplace five days a week. If this requirement should disappear in the future, it may not be entirely beneficial to employees. If the office becomes less important, one of the most important competitive advantages enjoyed by employees in the Western world will also disappear. When a company’s employees gather at an office each day, the office becomes a natural barrier against the company employing people who work remotely.
For more on how working from home affects the labour market and the economy, read the full theme article in Nordic Outlook – November, page 16.