Is a future without remote work even imaginable by now? For most workers, the pulse on working remotely has drastically changed compared to the initial months in the pandemic. The pandemic has left a huge remote work footprint, and has effectively given way to long term structural changes in the manner of work and economic patterns.
McKinsey & Company conducted an analysis on the prospects of remote work in the future, with the input of 2,000 tasks, 800 jobs, and nine countries. The miscellany in the sample of McKinsey & Company did identify some industries that were simply unable to perform their activities remotely. However, the analysis shows how the ability to conduct work remotely depends on activities rather than occupations. Remote work definitely brings technological capabilities that allow for a bigger pool of talent, however, what does this long term shift mean for different economic factors?
Here’s a summary of McKinsey Global Institute findings:
1. The top industries with most potential to thrive in remote work
The analysis showed that remote working essentially differs among industries. Logically, the digitally driven industries are typically less prone to productivity losses in remote work, thus having more prospect for utilizing it in the future. Some of the industries with the highest of effective potential percentage in remote work include finance sector with 76%, management sector with 68%, and the professional, scientific and technical services sector with 62% of effective potential.
The table below shows lays out the results further:
2. Advanced economies have higher remote work potential
As there is correlation of certain industries with remote work, economies with more intense use of those industries have more potential for remote work. Conversely, emerging economies are mostly labor-intensive due to their reliance in agriculture and manufacturing. Not surprisingly, countries such as Great Britain, Germany, U.S., and Japan stand at the top of the list of economies with higher remote work potential.
3. Significant economic implications of hybrid remote work
Considering the lifestyle change when working from home, the analysis goes deeper on the economic implications that might result with workers’ shift in consumption patterns. Without frequentation in restaurants, or use of transportation and fuel to get to work, these urban centers are most likely going to face major price decreases.
The real estate sector is particularly prone to these changes. Based on existing data that the analysis cites from a survey with U.S. based companies, one third for 248 chief operating officers plan to reduce office space in the coming years as leases expire. even tech hubs such as San Francisco or New York. In San Francisco, for instance, the median price of a one-bedroom rental dropped 24.2 percent compared to a year ago.
4. The need to adjust policies and practices
The McKinsey analysis found that although the confidence in the productivity of remote work is increasingly on the rise, organization ought to nevertheless adjust policies further to maximize this productivity. In this regard, a special focus must be put in factors that hinder the process of remote work for employees. Digital infrastructure stands as a top priority in this regard, given that poor internet service prevails as one of the biggest challenges to workers’ productivity in remote work.
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