BusinessWorld reported yesterday that two senators are considering a bill giving employees an additional deduction of P1,000 against taxable income for every month they are forced to work from home (WFH) because of COVID-19. This is to help them recover their higher electricity costs at home. An option, he said, is for their employers to just give them the P1,000 monthly as a subsidy.
If there is one thing going for the proposal is its recognition that WFH is probably here to stay. In my humble opinion, however, I would rather work on the assumption of WTFH or Work Temporarily From Home, until the medical emergency is over. Even if it takes one to two years to develop a vaccine against COVID-19. The arrangement should be seen as temporary until such time that infrastructure is in place to make it permanent.
Even US-based global companies Google and Facebook have already announced that they would allow their employees to work from home only until the end of 2020. Twitter, meantime, went to the extreme by announcing that some of their employees could work from home “forever,” if they wished. But these are high-technology companies, and their work infrastructure as well as work products are suited to such an arrangement. The same cannot be said of most Philippine companies.
In Japan, the BBC reported, technology firm Fujitsu would permanently halve its office space throughout the country through a “Work Life Shift” program that would be offered to about 80,000 employees. Staff would work flexible hours, and work from home wherever possible. Fujitsu told the BBC that the shift would allow staff to choose where they worked, whether that was from home, a major corporate hub, or a satellite office. Again, while this may work in Japan, this may not work here.
Since COVID-19 started, some Philippine-based companies went on WFH but without clarity as to how long. Many are simply awaiting the transition to the least restrictive quarantine control before allowing most employees to report back to work. Moreover, with our present telecommunication and internet infrastructure, it is unlikely that our companies can decide on longer-term WFH like Google, Facebook, or Twitter. Even an idea like that of Fujitsu doesn’t seem to be feasible at all. It all depends on the nature of the business, I guess.
In this line, perhaps the Senate should consider a more strategic action that can pave the way for creating a suitable environment to make WFH more permanent and feasible as a long-term work arrangement here. A tax deduction for electricity consumption, or even a monthly P1,000 subsidy from employers, is too short-term, and perhaps too costly for businesses with strained revenues.
The worst thing that can happen is for employees, despite limitations, to push for WFH driven primarily by the possibility of a mandated subsidy for power cost. But in the end, it is productivity that may suffer. Over the long-term, such a scenario will hit company bottom lines. In the end, the work arrangement becomes detrimental both to the employer and the employee.
In a recent commentary in The New York Times, veteran technology writer and editor David Streitfeld noted that since the early 2000s, US companies have been experimenting with WFH arrangements and telecommuting. And many of them have suffered “setbacks” and just opted to pull back on such programs, for one reason or the other. Simply put, while technological advances point to possible success in telecommuting, experience with it indicates otherwise.
He cited the case of technology giant IBM. “In 2009, 40% of its 386,000 employees in 173 countries worked remotely. But in 2017, with revenue slumping, management called thousands of them back to the office,” Mr. Streitfeld wrote, noting that “the history of telecommuting has been strewn with failure.”
“Companies large and small have been trying for decades to make working from home work,” he added. “And yet many of the ventures were eventually downsized or abandoned. Apart from IBM, companies that publicly pulled back on telecommuting over the past decade include Aetna, Best Buy, Bank of America, Yahoo, AT&T, and Reddit. Remote employees often felt marginalized, which made them less loyal. Creativity, innovation and serendipity seemed to suffer.”
There is much to be learned from the experiences of these companies with WFH. We must study these experiences and pick up applicable best practices. The failure of many doesn’t necessarily mean that WFH doesn’t work. For one, the reason for doing WFH now is no longer the same reason as before. And there have been additional advances in technology. However, it is also very likely that employers will ask employees back to the office as soon as vaccination is an option.
The darker side of the situation is that “the lack of universal and affordable access to the Internet may widen income inequality within and between countries,” wrote Mercedes García-Escribano in IMFBlog. She is the deputy division chief in the Fiscal Affairs Department of the multilateral agency International Monetary Fund.
“COVID-19 and the Great Lockdown triggered a mass migration from analog to digital and highlighted that access to the Internet is crucial for socioeconomic inclusion,” she wrote. “High-speed Internet is key for working from home, for children’s education when they can’t attend school in person, for telemedicine, for benefiting from social support programs, and for enabling access to financial services for everyone, especially for those living in remote areas.”
But she also noted the situation created a “digital divide” that “is more like a chasm, both within and between countries.” As a result, “income inequality and inequality of opportunity may worsen — even in advanced economies — because disadvantaged groups and people who live in rural areas have more limited Internet access.”
For policymakers, she added, what would be more crucial is how “governments [could] foster a digital-friendly business and regulatory environment for the private sector. This can be instrumental to accelerate and finance investments in infrastructure.” She also said that “policies should also be geared to closing the Internet gap for firms.”
Subsidies, like what some Philippine senators are contemplating, is just one of the calibrations that may be needed, she said. But it cannot be one-off. It should be part of a package that will ultimately bridge the gaps in access to internet technology. “Government support, for instance by ensuring the Internet investment is complemented with universal electricity access, is essential,” wrote Ms. García-Escribano. “In addition, subsidies may be needed so that all households — including disadvantaged groups and those in rural and remote areas — have access to quality Internet, and to ensure there is no digital gender gap,” she added.
In essence, pushing concepts like WFH and making them part of our lives either as temporary or permanent work arrangements should be not driven just by tactical need arising from pandemics or disasters. There should be a strong vision and strategy behind it that is in the national interest. We should choose to do WFH if we truly believe that it will ultimately improve lives in a sustainable manner. And, if we truly believe this, then we should first invest in a well-prepared plan and work on providing the infrastructure that can make it happen.
Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippines Press Council.
