Numbers Don’t Lie

Had it not been for the work from home (WFH) arrangement, government’s quarantine measures would not have been sustainable. Corporations and citizens would have insisted on going back to work to survive — and this would have caused a spike in infection rates. Without WFH, the economy would have collapsed in a matter of months. Thus, it could be said that the WFH arrangement saved the economy while acting as an important tool in combating the Wuhan virus.

A recent study by the School of Humanities and Sciences of Stanford University reveals that in the United States, 42% of the labor force are presently working from home, 30% are floating or unemployed, and 25% continue to physically report in their place of work. Interestingly, the 42% who work from home consist of middle to upper management and decision makers who can carry-out their work remotely. Meanwhile, the 25% who continue to physically report to work consist of factory laborers, retail frontliners, and service providers. Those that work from home make-up two-thirds of the American economy based on their earnings.

The ratios in the Philippines may be different from that of America but the trends are the same.

Before the pandemic, corporations were hesitant to adopt the WFH arrangement fearing a decline in productivity. But the quarantine forced corporations to embrace WFH whether they liked it or not. The majority discovered that it is workable, more convenient and potentially more efficient. A recent survey among Filipino executives shows that those who work from home on a full time basis deliver an efficiency rate of 80% or more. This is higher than the efficiency rate of those who work in the office where distractions are aplenty.

The stigma over working from home has disappeared and corporations, here and abroad, are making it a standard feature in their organizations. Apart from increased productivity, WFH allows companies to offer better quality of life to their employees; Employees can customize their workspaces; employees save the cost, time and stress of a daily commute — they save on having to invest in office clothes and eating out as well; new skills are developed as employees are no longer “spoon-fed” in a WFH environment; it discourages illicit behavior and extra-marital affairs in the workplace; it is also beneficial for employee’s mental health as they are less likely to get burnt-out; and, most importantly, employees are generally happier with better work/life balance. All these translate to higher retention rates.

On the part of corporations, WFH allows them to make do with less office space thereby reducing their overhead expenses; employees generally put in more work hours when working from home and take less sick days off; they can hire the best talent regardless of where they are in the world; with employees dispersed geographically, corporations gain “eyes” and first-hand insights on markets and competition; office politics is minimized; above all, business owners and their board of directors have reason to work from home too.

But just as there are advantages, there are disadvantages too. Working from home takes away personal human interaction among employees, thus making them feel lonely; some employees have difficulty switching out of home-mode and into work-mode, and vice versa; boredom sets in; employee motivation diminishes; lack of access to documents and office equipment can diminish productivity; and in some cases, the home becomes a place of stress, not relaxation.

One the part of the employer, it is difficult to measure productivity and/or performance of employees who work from home; security risks on confidential information are heightened; collaboration among employees suffers and this diminishes the sense of team work within the organization; corporate culture becomes muddled and/or more difficult to inculcate; bad Wi-Fi connection can obliterate the productivity of an employee; lack of face to face interaction makes it hard to gauge employee motives and unspoken cues, miscommunication becomes more rampant; employers are at the disposition of employees as to when they answer their calls or provide answers to questions.

In the US, studies show that there will be four times more employees working from home, post-pandemic, then there were before it. I tried to search for a similar survey in the Philippines but there was none. Again, I argue that the ratios may differ slightly but the trends are the same.

Working from home will spawn a new set of winners and losers.

The winners will be real estate for suburban properties, e-commerce, direct-to-consumer retail, home furniture and accessories, computer hardware, computer software, “gig” services, and the health and wellness industry.

The losers will be industries that depend on employees being physically present in their offices and those who travel to clients or branch offices. This includes the real estate industry for highrise and city center properties, automotive, food and fashion retail, construction, oil and gas, travel and hotels.

However, the biggest losers of all will be those who are unable to work from home due to the manual nature of their job. This sector will be left out from the many benefits of working from home. And because they will be increasingly invisible to management, they will likely be bypassed when it comes to opportunities to make the great leap from blue collar to white collar.

In other words, working from home emphasizes the great divide between labor and management. This is a ticking time bomb when seen through an income inequality and opportunity inequality perspective.

Whether we are on the side of the winners or losers, there is no denying that working from home is here to stay. We all need to adapt to make the most of it.


Andrew J. Masigan is an economist.