Thursday, November 11, 2021

What Will Permanent Remote Work Mean?

It is not exactly clear what employee  preferences for remote work say about the quality of office life (most people able to work remotely work in offices). Less clear is the environment people actually will have to encounter when they return to the office.  


But McKinsey has estimated that “more than 20 percent of the workforce could work remotely three to five days a week as effectively as they could if working from an office.” 


 source: McKinsey 


Different in-office work patterns that mean fewer workers in the office overall will have other repercussions than worker happiness, company culture, collaboration and productivity, though. 


In pre-Covid days, of  the workforce in advanced economies, between five percent and seven percent of workers regularly worked from home. A shift to 15 to 20 percent of workers spending more time at home and less in the office could have profound impacts on urban economies and even demand for mobile device services. 


In the U.S. market, for example, mobile service providers are pushing customers towards higher-priced unlimited usage plans, precisely at a time when more of us are spending less time “out and about,” and therefore connected to our home broadband and Wi-Fi, reducing the value of such unlimited usage plans. 


More sustainable remote work is going to reduce the value of such plans, as people will be consuming less data from the mobile network. 


More people working remotely means fewer people commuting between home and work every day or traveling to different locations for work. This could have significant economic consequences for  transportation, gasoline and auto sales, restaurants and retail in urban centers, demand for office real estate, and other consumption patterns, McKinsey notes. 


It is conceivable that network demand patterns could shift, with less growth in urban areas, less “commute time” demand and perhaps a bit more demand on suburban cell towers. But overall mobile data demand could grow less fast than previously expected, unless consumers change behavior and simply rely on mobile data all the time, without offloading to Wi-Fi. 


The degree of shift hinges on the percentage of workers, and the percentage of work time, that shifts to remote sites. Lots of people appear to want to work remotely on a permanent basis. Of the people polled by Reed.co.uk, a recruitment website, 35 percent said that they were willing to take a pay cut in exchange for permanent remote working


The poll of 2,002 working adults probably is not structured to represent a sample replicating the entire population of workers who could work remotely on a permanent basis, but is in line with virtually all other surveys I have seen on that question. 


Work-life balance probably explains some of the sentiment. Some people, in some jobs, might find they prefer the flexibility of working from home. Others might be the sort of workers most bosses fear: unmotivated and less productive when not seen. 

 source: McKinsey 


The point is that our forecasts of mobile data demand might have to be revised if lots of remote work becomes permanent. Mobile service providers might even find their profit margins improving--in addition to average revenue per account--if customers are on higher-priced plans but usage does not require such plans. 


Then the issue becomes how valuable price certainty is, compared to the ability to buy lower-priced plans with a bit more uncertainty. It is too early to tell how demand might shift if robust remote work on a permanent basis were to develop.


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