1、PwC | The costs and benefits of working from home 1 The costs and benefits of working from home PwC | The costs and benefits of working from home 2 Working from home was not an unusual thing in our firm, just as it was normal to work on assignments from a client site. There were many days when the f

2、loors of our own office buildings were not fully occupied. And then, suddenly, brought on by COVID-19, we were all working from home without exceptions and for a longer period. And this turned out to be quite a different situation. We quickly found out that a combination of human flexibility, adapta

3、bility and dedication, supported by an up-to-date technological infrastructure helped us face the new challenges of fully remote working. Albeit in a different way, we got our work done. We got acquainted with each other in new ways, because we got to have a look into our colleagues home situation.

4、We saw spouses, children and other personal peculiarities during our online meetings. We also noticed that working from home impacts people in different ways depending on the circumstances at home but also on a persons character and preferences. From our weekly well-being survey we learned that a lo

5、t of our people could easily do without the daily commute, but that they missed the daily physical contacts with colleagues and clients. This is a time that tests our resilience as individuals and thus as a firm. But also our culture and the ability to seek connections. It is about flexibility, chan

6、ging perspectives and embracing the unknown. I am proud and impressed by the extent to which we succeeded in this time of crisis. Now we are carefully restarting office life, and the challenge is to hold on to all good things that came from the massive change in the way we worked in the past months.

7、 I do not envisage that we will return to pre-COVID office life completely. We need to rethink the way we work and look at all aspects of working and reconfigure them into a new normal. With this research we want to support the choices organisations and their people make in the way they (re)design t

8、heir way of working. We also want to contribute to the broader societal debate on the implications of an increase in working from home, as this redesign has implications for society at large. Our research on the costs and benefits of working from home highlights the substantial benefits of an increa

9、se in working from home in terms of both cost savings and emission reductions. However, it also outlines negative, non-quantifiable impacts that can be easily overlooked. These relate to the absence of proximity to other people and the influence that may have on working together, innovation and comp

10、any culture. Looking ahead, finding the right balance and not losing momentum to ignite transformation are key challenges. Let this document support you in this process. Marc Borggreven Member of the Board of PwC in the Netherlands and responsible for Human Capital Introduction PwC | The costs and b

11、enefits of working from home 3 In 2019, 39 percent of all workers in the Netherlands worked (usually or incidentally) from home. In this year, eight out of ten companies with more than ten workers facilitated teleworking. This number jumps to more than nine out of ten companies when it comes to thos

12、e that employ more than 50 people. These numbers that were published at the beginning of 2020 by CBS suggest that the potential of working from home, which was already large pre-COVID-19, is probably bigger than we previously thought. The current pandemic forced a lot of workers (including the self

13、employed) to work from home. While this situation is expected to continue given the scarcity of office space in a one and a half meters society, the lingering question is whether a permanent increase in working from home will occur post- pandemic. Therefore, we set out to research how in terms of co

14、sts and benefits a permanent increase in working from home would influence overall societal welfare. Our analysis takes into account both quantifiable and non-quantifiable considerations. We found that the net benefit of increasing the time worked from home by just one day per week amounts to 3.9 bi

15、llion annually, primarily driven by cost savings to companies and employees. This translates to a reduction of 1 percent of total wagebill in the Netherlands. Additionally, this change could bring about a reduction in CO2 emissions of 605.5 million kgs per year, from less (commuting) traffic. This t

16、ranslates to a reduction of 2 percent of total emissions from road transport in the Netherlands. We also considered non-quantifiable, softer, impacts such as those related to company culture, collaboration, innovation, and health. Our main finding is that while an increase in working from home is be

17、neficial from a direct cost and emission perspective, in the longer term the results are not so straight-forward. The value of cooperation, knowledge- sharing, and innovation are considered fundamental to the success of organisations. These values depend on proximity to one another and may come unde

18、r pressure in a new normal scenario. We have seen that working from home during the pandemic went very well in general. Benefiting from the highly developed digital infrastructure, a lot of work continued seamlessly. This probably explains the positive vibe around it and the debate about the new nor

19、mal. Why return to the office at all when we can avoid the traffic? It explains why organisations are seriously thinking about changing their way of working permanently. When the pandemic ends, and working from home will be a choice of employers of employees rather than forced, both parties should a

20、lso take into account the less positive effects of working from a distance. Precisely because aspects such as innovation or corporate culture are not easy to quantify or find evidence for, they run the risk of being overlooked. The challenge is to find the best combination of both worlds. How does a

21、n increase in working from home change societal welfare and who stands to benefit most from it? PwC | The costs and benefits of working from home 4 The assumption: working one day extra from home The first question of course is, how much can we work from home? This differs by the type of work one do

22、es, with knowledge workers and workers in “management, business and financial” occupations being most likely to be able to do so. Surveys conducted by PwC and Global Workplace Analytics1 indicate that on an average approximately 50 percent of the total workforce of a country is able to work from hom

23、e. This is not unfathomable, as around 39 percent of the Dutch already reported working from home at least sometimes2. The assumption that underlies our analysis is that: the part of the workforce that is able to work from home (fifty percent) of the total workforce will work from home one additiona

24、l day per week. This would mean an increase of twenty percent (1 out of 5 days a week) for half of the workforce. Implementing this has limited cost implications, as most of these workers already have the tools they need to work from home; the days that are worked from home are optimally spread over

25、 the week, meaning that the impact we calculate is the maximum impact3. Impact on four impact categories: employers, employees, environment and public goods In this analysis, we have assessed the net impact of the one-day-per-week increase in working from home on four areas: employers, employees, th

26、e environment, and other public goods. We included both quantifiable and non-quantifiable effects, and both direct and indirect effects on each of these four impact categories. The impact analysis points at a net increase in social welfare. The net increase is calculated as the difference between th

27、e welfare of our assumed scenario of a post-COVID-19 increase in working from home and the welfare of the status quo (pre-COVID-19). The analysis shows that the benefits to employees (health and overall wellbeing), the environment, and public goods are clearly positive, while the benefits to employe

28、rs are more nuanced. They benefit on some direct cost aspects but can be negatively affected by other softer/non-quantifiable effects such as a weaker corporate culture or less innovation. The analysis is quantified as much as possible, with a few impact areas being discussed only qualitatively. The

29、 distribution of the net societal benefit is also considered solely qualitatively. 1 Global Workplace Analytics, 2020, https:/globalwork- ny-people-could-work-from- home 2 CBS, 6 April 2020 3 Maximum impact calculations assume that organisations will spread out working from home over the week, so th

30、at they can achieve maximum cost benefit by reducing office space and other running costs. In reality, the cost benefit will likely be lower. CalculationCost / Benefit in millions Office spacem2 reduction: 8,700,000 m2 price: 125 1,087.5 Gasm3 reduction: 95,500,000 m3 price: 0.77 73.5 ElectricitykWh

31、 reduction: 780,000,000 kWh price: 0.2225 173.6 CateringTotal size in millions: 3,468 346.8 Total 1,681.4 5PwC | The costs and benefits of working from home 5 More working from home Impact on energy use Impact from change in working space Impact on work infrastructure Impact on households Impact on

32、organisational culture Added productivity Added productivity Work life balance Work life balance Direct cost implication Direct cost implication Health benefits Health benefits Impact on emissions Impact on emissions Impact on innovation Impact on innovation Impact on investments by companies Impact

33、 on investments by companies Outcome Mouse-over one of these buttons to see the outcome Cost/benefits to employers Cost/benefits to employers Cost/benefits to employees Cost/benefits to employees Cost/benefits to environment Cost/benefits to environment Cost/benefits to government and from public go

34、ods Cost/benefits to government and from public goods More working from home Impact on time utilisation Impact on transport Less traveling to work Outcome Mouse-over one of these buttons to see the outcome Less travel to and from work More working hours (assumed 100%) More time for childcare/househo

35、ld tasks (assumed 0%) Lower cost of operations for public transport Lower investments in public transport Lower cost of driving (fuel, maintenance) Less need for road infrastructure maintenance Less environmental costs Less electricity and heating in office Customer loyalty More electricity and heat

36、ing at home Productivity Less office space needed (including parking space) Employee turnover Less need for catering Profitability More broadband use at home (excluded low cost impact) Less need for childcare Less illness rate (including less stress/burnouts) More use of conferencing tools/ less use

37、 of face-to-face interaction PwC | The costs and benefits of working from home 6 Impact on employers: direct cost benefits but weaker corporate culture There are some direct implications of an increase in working from home. Since this is hypothetically a permanent change, we assume that companies wo

38、uld like to equally distribute the days on which employees work from home, thereby reducing the need for office space and related costs like electricity, heating and catering. Direct cost savings Taking all these direct benefits into account, we arrived at a net benefit assessment, i.e. a cost savin

39、g for companies to the tune of 1,681.4 million per year. To put this in perspective, this saving is equal to approximately 15 percent of the amount spent on office spaces in the Netherlands per year. For this calculation, we only take into account impacts that we consider material. For instance a de

40、crease in internet usage or coffee usage at the office is considered immaterial cost-wise. Impact of less proximity to colleagues However, the direct cost impact is only one part of the cost-benefit assessment. There are many other implications for employers that are less quantifiable. These are mos

41、tly related to corporate culture. A decrease in proximity to colleagues, even by one day a week, could weaken corporate culture. This may result in less effective collaboration and a subsequent decrease in innovation. It could also lead to a weaker brand name, which could decrease customer loyalty.

42、These effects have implications for company profitability in the longer run. Impact on absenteeism and turnover The impact of an increase in working from home on employee absenteeism, for reasons of health or personal circumstances, is not clear. While a weaker organisational culture would make for

43、employees that are less connected to the company and therefore more prone to leave, flexibility in working from home is shown to decrease employee turnover. A positive impact of an increase in working from home would be a decrease in absenteeism among employees, as people that have more flexibility

44、in working from home are less likely to call in sick. Impact on productivity Lastly, the overall impact on productivity is ambiguous. While less intense collaboration could decrease productivity, some research suggests that people think that they are more productive when working from home. The end r

45、esult therefore might be two-fold: there could be an increase in productivity for individual work and a decrease in productivity in work that requires close collaboration. PwC | The costs and benefits of working from home 7 Impact on employees: benefits from less travel time, but higher electricity

46、bills Impact on costs is varied Employees would save considerably by not travelling to work, but other cost implications on employees are more varied. Direct costs such as increases in gas and electricity usage are not fully offset by savings in childcare costs - assuming some employees keep their c

47、hildren at home while working remotely. The widespread broadband connectivity in the Netherlands present in 98 percent of households according to Eurostat makes any cost considerations from increases in internet usage immaterial. Overall, we estimate that the net benefit to workers would be approxim

48、ately 1,120.2 million per year. This is nearly half of total childcare costs incurred per year in the Netherlands. Impact on health and mental well-being Another major impact area for employees is their health. We deem the health impact of working from home to be positive; this is in line with resea

49、rch that suggests a decrease of 0.5 percent in sickness rate when working from home. Another consideration is improved mental wellbeing from being closer to ones children as a consequence of using less childcare services. There is not enough consensus in research on the impact of an increase in working from home on stress levels and burnout probability, but is widely considered to be positive. Furthermore, less travelling to work equals less travel related accidents and less traffic-induced stress. According