Pros and Cons of the UK Homeworking explosion

UK’s Home-working Explosion

Covid-19 forced large-scale homeworking for the first time, but in doing exposed the benefits to both employee and employers.

The key learning was that staff could still interact in a highly personal manner with colleagues and clients via “Face to Face” meetings held over video conferencing tools like Zoom, Teams or Google hangouts. However, what were the less obvious impacts?

A recent staff survey of 2,000 employers of a well-known quoted business, sought to explore this topic and highlighted some ajor shifts in both productivity and employee satisfaction, caused by home working. It also looked at how behaviour might change if a mix of office and home working was offered.

Positive impacts of Home Working

Improved productivity.

• Travel time for meetings. A staggering 22% of paid working hours, are no longer being “wasted” on travel to client’s offices or meeting venues, with video conferencing now being quoted by customers as their preferred option, due to the increased flexibility of meeting arrangement yield by removing the travel element.
• Commuting hours. Staff were asked to estimate the time saving by avoiding their day to day commute. The average time saving for this London based business was 2.8 hours a day, which assuming an 8-hour working day, represents an increase in potential productivity of 35% if this was converted into extra work hours. However, obviously not all staff are automatically working longer, but on average staff estimated they were working an extra 47 minutes per day either at the beginning or end of their normal working days.
• Break times. The lack of human interactions options for staff, usually delivered in offices via coffee breaks and chats with colleagues, is quoted as a key negative for staff, but conversly staff did estimate a lack of breaks increased their short-term productivity by 15%. The loss of productivity due to fatigue was however felt to outweigh this productivity improvement for 63% of staff.

Life Flexibility.

• Time with family. Given it was a confidential survey, we were surprised that a large majority i.e. 86% of staff, said they enjoyed being able to spend more time with family, although staff estimated that this only represented 17% more of their day.
• Odd jobs. Not surprisingly this divided markedly across the sexes with 64% of female staff seeing working from home as a benefit in terms of being able to do odd jobs such as cloths washing, Adhoc food shopping or collecting the kids from school. Conversely, only 22% of men expressed this as a benefit.
• Although in the short-term hobby participation has been heavily impacted by Covid-19 restrictions, 78% of staff felt they would be able to enjoy their hobbies e.g. sporting activities, more if they worked from home on a regular basis.

Financial impacts.

• Commuting cost savings. On average staff estimated that work related expenditure such as not commuting, spending less on work clothing and buying food away from home, would save them the equivalent of 21% of their annual salary. This obviously represented a higher proportion for lower paid staff.
• Moving home. Over 38% of staff said they would consider moving to a new house in a cheaper or more rural location, if they were allowed to work from home more than 3 days per week.
• There were no clear trends as to types of car staff may switch to, but 42% said they would consider changing cars or the range of cars in their family, if they worked more from home, with 53% expressing an interest in getting an Electric car if they no longer had to commute or travel long distances on a regular basis for meetings.

Negative impacts.

Most negatives impact centred around their home office not being setup effectively for home working.

• Lack of separation of home and work lives. 74% of staff felt it harder to separate their workdays from home life and to finish work at a specific time. They also reported the urge to deal with emails or work issues, being much higher in non-working hours due to the lack of separation of environments.
• Multiple home workers. Even when homes do have a dedicated room allocated as an office space, many staff faced issues during Covid-19 with both parents and children were competing for home space to work in. Although, in many households’ children have now returned to school reducing the pressure, space remained a key issue where both parents were working from home.
• Lack of phone call privacy. Again this topic split down the sexes divide, with 72% of male staff saying they found it difficult having work conversations if their partners or children could overhear the conversation, but this dropped to 54% for female employees.
• Inadequate environment. The home working environment was often rated as poor compared to their work offices in the following areas
  • Comfort of chairs.
  • Desk space
  • IT Support.
  • Printer reliability
  • WIFI speed.

Summary.

Employers clearly need to consider investing in their senior staff’s “home working” environment in order to maximise the potential productivity benefits. However, current taxation laws complicate the issue as there is a clear “Grey” area over what facilities are solely for business purposes and can avoid “Benefit in Kind” (BIK) taxation.

The employer involved in the survey is currently reviewing options, but their preferred route is to provide dedicated “Garden Offices” for the following reasons.

Tax efficiency.

• Capitalisation. Employers can pay for “removeable” Garden offices and capitalise these on their balance sheets, writing off the cost over a 10-year period. If staff leave the business the units can be removed and re-allocated to other staff, allowing a longer depreciation period.
• Reclaimable VAT. The 20% VAT costs can be reclaimed by an employer on both initial set up cost and ongoing running costs, which would not be possible for individuals.
• No “Benefit in kind Tax” for staff. Having a dedicated and removeable “Garden Office” if staff sign a waiver to stating it is solely used for business purpose, makes it 100% clear that no benefit in kind tax will be applied by HMRC.
• Quality of environment. A dedicated workspace allows employers to cover all business-related costs such as Broadband WIFI, printer costs and quality ergonomic office furniture.

Employee preference.

• Clear separation of work and home. Although the office is now is close to home i.e. the garden, there is a clear separation with work starting and ending when staff enter the Garden office.
• Competition for space. A garden office removes one home worker from the house, reducing competition for space.
• Private workspace. Providing a dedicated space, where calls cannot be overhead is popular with male staff in particular and is felt to provide a more professional space for interaction with clients via video conferencing.