How far working remotely can go ?

With the outbreak of COVID-19, many companies have switched their employees to all-telework. This mode of remote work has some advantages for the employers (fewer delays, productivity improvement, recruitment ease, etc.), but also for the workers (lower travel costs, less stress, more liberty, etc.). But it also has some limitations.

Working remotely and the appropriate jobs

The first limitation of telework is that it is not adapted to all professional activities. Recent analyses have shown that only about 40% of job categories can be carried out from a remote location. It concerns activities that are performed with no requirement for physical presence on site, interaction with others or use of fixed equipment. These activities include information processing, communication, accountancy, customer service…

This trend could create inequality between workers within a company as well as social stratification.

Working remotely and productivity

All-telework impedes the “agglomeration effects” identified by economist Alfred Marshall in the later 19th century. This term designates the potential for productivity gains through the geographic concentration of activities. The proximity of companies to their counterparts can improve productivity by between 3% and 5%. When professionals cross paths, whether on the street, in a hallway or in a meeting, they talk to each other and share their information. Switching to an all-telework system would therefore entail the risk of depriving the company of this important source of productivity gains. The exchange of ideas is mostly done through face to face exchanges, not through virtual ones. In addition, face-to-face communication promotes the creation of a trustful relationship.

Working remotely and Outsourcing Risk

In view of the efficiency of telework, some companies might be attracted to relocate many telework jobs to other countries.  Indeed, in some countries, the wage costs are cheaper. This may result in local skilled employees facing increased competition from telemigrants.

In contrast, there is the possibility of relocation of domestic teleworkers. With the possibility to work from any location, many of them are also being attracted to telework from abroad.

Working remotely and Management

The COVID-19 is a catalyst for digital transformation within companies. Fortunately, the necessary tools for remote working have already been available long before the pandemic. This facilitated the quick implementation of full telecommuting. But companies are now facing new challenges and it’s becoming difficult for them to control this type of work. It is now hard for companies to control what employees do during their work hours. Companies are therefore forced to change the way they handle their employees by relying more on trust.

Working remotely and relocation

With the health crisis and telecommuting, many families have decided to go to the countryside to enjoy a better living environment. This has led to movements in real estate prices. While they are dropping considerably in the centers of large cities, they are rising in the outskirts. Families have an interest in moving to an area within a reasonable distance of their workplace, since telecommuting will only be practiced partially, from 1-3 days a week.
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