Home-working here to stay, finds IoD study

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Date: 6 October 2020

Happy worker in front of their laptop working from home

The coronavirus pandemic will have a lasting impact on office use, according to a new survey of company directors.

The Institute of Directors (IoD) has polled 958 company directors and has found that 74% said they would be keeping increased home-working after coronavirus. More than half said their organisation intended to reduce their long-term use of workplaces and more than four in ten said that working from home was proving more effective than their previous set-up.

The poll findings show that business leaders have been making other adjustments during the pandemic that they intend to keep in place - 43% have embraced greater use of flexible working such as compressed hours, while over a fifth have moved a service online.

However, the IoD has warned that the long-term prospect of increased home-working could raise legal questions around employers' responsibilities for staff outside the office. It is also calling on the government to take a number of steps to help SMEs adapt to increased home-working. These could include:

  • Improving SME tax incentives, enabling more small firms to harness new digital technologies and bolster the productivity of home-working. This could be achieved by expanding the scope of R&D tax reliefs.
  • Improving access to management training, to reduce concerns around productivity and employee wellbeing. Boosting management skills could be one target of the National Skills Fund.
  • Lowering employment costs, particularly Employers' NICs, to encourage job creation and help more firms retain staff. This could be done by increasing the Employment Allowance or raising the threshold for paying National Insurance contributions.

Roger Barker, IoD director of policy, said: "Remote working has been one of the most tangible impacts of coronavirus on the economy. For many, it could be here to stay.

"Any remote-working set-up is only as good as the technology that enables it. Alongside continued investment in digital infrastructure, the government should give small firms the headroom to invest in the latest equipment and software. The restrictions have spurred significant innovation, but low revenues and high costs could put a lid on this."

However, he cautioned that remote working does not work for every business. "Managing teams remotely can prove far from straightforward, and directors must make sure they are going out of their way to support employees' mental wellbeing.

"The benefits of the office haven't gone away. For many companies, bringing teams together in person proves more productive and enjoyable. Shared workspace often provides employees the opportunity for informal development and networking that is so crucial, particularly early on in a career."

He concluded: "Looking ahead, it seems more and more companies will take a blended approach to where they work. Any transition can cause challenges, and the government should look to ease this. In the long run, greater flexibility could benefit both business and worker alike. However, it's crucial that the legal and economic implications of this change are grappled with from the start."

Written by Rachel Miller.

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