How Covid-19 will change workplaces and cities

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One of the biggest effects of Covid-19 is that it has forced organizations and companies around the world to adopt work from home (WFH) on a massive scale. As the world recovers from the pandemic and opens up again, they can use that experience and adopt a more flexible workplace model where at least some of their workers continue to work remotely. The potential benefits include lower office costs and superior productivity for companies, fewer commutes, and better work-life balance for workers and less traffic congestion and pollution for cities.

Why did it need a global pandemic to push companies to seriously explore WFH when the underlying technology including broadband and video-conferencing has existed for at least a decade? One problem was the learning curve for both companies and workers in adopting a completely new method of work. People had to learn to use new technology, integrate it in their workflow, learn to be productive from home, and develop new norms for remote working. Inevitably there was a risk of lower productivity during the transition. Also, it was hard for one company to make the change on its own when its clients, partners, and suppliers still used a traditional workplace model.

What the pandemic did was to force organizations in every sector and country to adopt WFH at the same time on a massive scale and also learn to work remotely with others. Today any organization which wants to continue with WFH even after the pandemic will find a much more receptive environment.

For most companies, a hybrid model probably makes the most sense: a core group of employees who go to an office every day, another group who may commute once or twice a week, and a third group that works remotely almost all the time. Finding the right mix of work practices will be an important challenge for companies in the coming years

Ideally, companies should start preparing now when many of their workers are still at home allowing them to precisely measure their remote productivity and understand what support they need to be more productive. As workers start coming back to the office, companies need to analyze, preferably through controlled experiments, what work requires physical presence and what can best be done remotely. They also need to design group activities to build and maintain their cultural and social capital when many employees are not physically present 5 days a week.

In the longer run, companies can redesign their offices perhaps reducing individual working space while creating new spaces for group collaboration. They may also move some of their offices from the largest cities to less expensive alternatives which would both cut costs and widen their employee pool.

WFH will bring larger benefits to the economy with less traffic and pollution and reduced regional inequality as jobs are dispersed away from the biggest cities. The government should support this transition by redesigning its processes for remote work and allowing regulated organizations in the education and other sectors to experiment with WFH.

India is well-placed to transition to WFH. In relative terms it has made more progress in telecom than other infrastructure sectors; for example, in 2018 India had the highest data usage per smartphone in the world. At the same time, it struggles to finance and build urban transportation leading to commuting choke points, like the notorious "super-dense crush load" of Mumbai local trains at rush hour. WFH will allow India to develop a more asset-light urban model with less office space and commuting and therefore less pressure on urban transit. WFH also could boost India's service outsourcing model as companies around the world become more comfortable with remote employees.

Of course, today only a small fraction of India works in formal office jobs suited for WFH but that means that Indian companies and cities will have the time to adapt to this potentially radical transformation. Newer Indian companies, in particular, can build their culture, processes, and office space from the ground up for WFH and newer Indian cities can be built more efficiently with less commuting. Managing this transition well will be one of the central challenges of this decade.

-     Authored Article by N Sawaikar, Core faculty in Economics at S.P. Mandali's Prin. L. N. Welingkar Institute of Management Development and Research (WeSchool)