Companies Plan to Keep Remote Work Arrangements After Crisis
Research
In light of the changes to organisational processes that businesses have had to make due to the COVID-19 pandemic, many firms have realised that there are more tasks that can be carried out from home than previously expected. In the business-related services sector, more than 50 per cent of companies – and in the manufacturing sector, more than 40 per cent – are reporting such digital learning effects. “The widespread recognition among firms that many more tasks can be performed remotely than previously assumed reinforces the impulse the coronavirus crisis is giving to increasing mobile work. Because of these new experiences and insights, many companies are planning to use remote work more regularly after the crisis than they did before,” says Dr. Daniel Erdsiek, a researcher in ZEW’s “Digital Economy” Department. About one in three companies had to invest in new technologies in the short term in order to make remote work arrangements available during the crisis. These are the results of a recent representative survey conducted by ZEW Mannheim in June 2020 among approximately 1,800 companies in the information economy and manufacturing industry.
“Especially in larger companies, the coronavirus pandemic is leading to a long-term expansion of remote work opportunities for their employees. Around 75 per cent of companies in the information industry with 100 or more employees expect a permanent increase in home-based work, for example,” says Dr. Erdsiek. This figure is 64 per cent for medium-sized companies and 40 per cent for small companies with 5 to 19 employees. In the manufacturing sector, more than half of the large companies expect a permanent increase in remote work use as a result of the crisis.
Large companies more likely to plan permanent changes
A possible reason for the increased use of remote work arrangements even after the crisis may be the experience gained during the crisis that fewer activities than previously assumed have to be done in the main office – a lesson which larger companies in particular are learning. With that said, 83 per cent of companies with 100 or more employees in the information industry and 70 per cent in manufacturing stated to have learned that more activities are suitable for remote work than previously assumed. The investments in new technologies, which were necessary for around one third of companies in order to make remote working available to the employees, will therefore be paying off in the long term.
Before the outbreak of the coronavirus pandemic, only one in four companies in the manufacturing industry offered their employees to work regularly from home. This share has now risen to almost 50 per cent. For the period after the crisis, around 37 per cent of companies plan to continue using remote work arrangements. Since not all activities in manufacturing are suitable for remote work, the proportion of employees who regularly work from home at least once a week is comparatively low. However, the pandemic is also having a long-term effect on the prevalence of remote work: In only four per cent of companies, at least one in ten employees worked regularly from home before the crisis. After the crisis, this share in the manufacturing sector is expected to increase to 14 per cent of companies, three times higher than before.
Use of remote work is likely to increase in the long run
The long-term changes are likely to be even more pronounced in the information economy, which includes the ICT sector, media service providers, and knowledge-intensive service providers. “Even before the crisis, around one in two companies in the information economy already made use of mobile work, since these sectors involve a large number of tasks that can be performed remotely. In the long term, almost two thirds of companies are now planning to offer remote work arrangements even after the crisis,” says Dr. Erdsiek. Companies also assume that an increasing proportion of employees will regularly make use of remote work. While up to now only about one in ten companies had more than 20 per cent of their employees working regularly from home, almost one in three companies expects the same regularity of remote work use in the post-crisis period. In the ICT sector, one in two companies plans to have more than 20 per cent of its employees work regularly from home after the crisis, whereas before the crisis, remote work arrangements were widespread in only one in five ICT companies.
