With more and more businesses going online introducing hybrid work models to support a flexible workforce, the impact of COVID-19 is undeniable. Work from home has become the new “business as usual.” A report by Upwork revealed that more than two-thirds of professionals in America were working remotely during the height of the pandemic. Over the next five years, 20% to 25% of professionals will continue to do so. While there might be some challenges when working remotely, there are several positives you can’t ignore.
As vaccine rollouts continue to grow and the world enters a new normal with fewer restrictions, it’s time to assess the impact working remotely has had on the global economy.
What is The Global Economy?
Before we unpack the impact of working remotely, let’s take a step back and understand the global economy. Simply put, it’s the economies of the world’s individual countries considered together as a single economic system. It looks at the sum of activities that occur both within a country and between different countries.
Every country has its own economy, operating as a separate unit. It technically sits in its own box, whether it’s industrial production, labor markets, financial markets, resource management, or environmental legislation. Globalization has enabled and enhanced the development and integration of economies worldwide. Countries have worked together, finding shared solutions from international trade and finance to migration. While there are countless benefits to globalization, it also means drastic changes in one country have a domino effect. Take Brexit as an example.
We use economic indicators to measure and analyze economic activity. One of the fundamental measures is gross domestic product (GDP), the total value of all goods and services manufactured within one year. At the beginning of 2020, the U.S. had the highest GDP, followed by China, Japan, and Germany. China, India, Russia, and Brazil were set to move up the ranks in the forecast for 2030. That all changed with the COVID-19 pandemic, which took its toll on every country.
What Working Remotely Looks Like On A Global Scale
The pandemic forced office blocks to close around the world. Only a quarter of those working from home in the U.S. would voluntarily return to the office. For many, a work-from-home lifestyle is preferable. Companies like Facebook and Twitter have gone as far as closing their office spaces, making working remotely a permanent fixture.
MIT compared the ease of transitioning to remote work in a study with 30 different countries. Naturally, developed nations with better access to the internet, a mix of occupations, and pro-employee policies transitioned with ease. Developing and middle-income countries battled more significant obstacles. The transition was much harder with low internet quality and penetration, intergenerational families, and challenging home setups.
While remote working during COVID-19 was inherently different across the globe, it did benefit the global economy. Productivity increased by 5%, and businesses embraced new technologies set to boost the economy in the future.
The Benefits Of Working Remotely
- Increased Productivity
Remote work relies on online collaboration technology, perpetuating the increasing demand for digital skills. Once businesses are appropriately set up for remote work, productivity skyrockets. Things like meeting attendance rates, internal communications, and people management improve. With more breaks and a comfortable working environment, employees focused on time management. Remote work relies on processes being in place, but the beauty is, once they’re set up, employees are more susceptible, embracing the changes to fit their new environment.
- Employers Have Access To More Talent
Most businesses have embraced hybrid teams often made up of permanent employees and freelancers located in various places. From a hiring perspective, remote work delivers a bigger, more diverse talent pool, benefitting both parties. Employees have more choice for growth and opportunity, while businesses can access niche talent that’s often tricky to find.
- More Time And Money
Without the daily commute, remote workers are saving time and money. With much of the labor force working from home, saving money, more disposable income benefits the local economy. That same high-paid salary is no longer going towards fuel or public transport. Instead, it’s funneled back into the economy via restaurants, online shopping, investments, and more.
- Working Remotely And Pandemic Remote Work Are Two Different Things
While the pandemic forced us to embrace working remotely, it delivered a host of challenges like balancing child care when schools were closed. In a post-pandemic world, this isn’t the case. Parents can work from home, optimizing productivity with access to childcare and schools. Shared workspaces will continue to thrive as employees seek collaboration, but businesses won’t have to invest in their own.
- Smaller Cities Thrive
For decades, the larger cities and main metropolitans have owned a significant share in the spending flow thanks to a concentrated workforce. With remote work, smaller towns can grow as local businesses experience increased trade. Instead of grabbing lunch at the café opposite the office, employees support businesses closer to home. It’s created a boom in smaller cities that have faced disproportionate economic downtimes in the past.
- Company Culture Was Re-Prioritized
Pre-pandemic company culture revolved around the workplace. It was easier to arrange functions, have face-to-face check-ins and gauge employee engagement. Working remotely made website maintenance a priority for HR teams, ensuring they had systems in place to manage employees. It forced businesses to implement employee satisfaction projects, inventing unique solutions to drive engagement from anywhere.
Businesses continue to embrace working remotely as we enter a post-pandemic environment. While the reason for working remotely may have evolved, the positive impact is undeniable. Whether it’s increased productivity, better company culture,, and improved processes, both employees and employers see a benefit. As smaller cities experience a surge in local expenditure, it opens the door for new opportunities. It creates a broader hiring pool, giving businesses access to top talent to achieve their objectives. It also allows employees to grow into jobs outside their local network, moving into a new salary bracket.
The pandemic has undoubtedly knocked the global economy, but we can’t ignore the positive impacts.