Remote Work: has the sovereign office been dethroned?

Six months after the outbreak of COVID-19 the workforce has settled into a new routine. Much has been made of the phenomenon of remote working – but will this trend continue after September 13th?

For the most part, public discussion about the pandemic has centred on health and the economy, and with good reason: the disease and its consequences pose a severe threat to both. However, the contingencies of a crisis provide us with a range of new experiences, not all of which are negative.

In Ireland, the working population is approximately 2.5 million. The number of office workers is difficult to pin down, but according to the CSO’s 2020 statistics almost 240,000 people work in administrative and secretarial positions.

If you take into consideration the people working in management, tech, sales, financial services and customer service, and the large number of professionals that work in offices (like accountants and architects), a modest estimate of the number of regular office workers in the Irish economy is about half a million. That’s 20% of the working population.

This means that since March, one in five people have continued to work under completely new conditions.

On September 13th, the restrictions that apply to non-essential work are supposed to lift. What is the likelihood that remote working will continue after this date?

Personal Perspectives

Let’s be clear – it’s not as though remote working doesn’t have its challenges. The Director of Clontarf’s East Point business park is Gavin Gallagher. He communicates daily with his clients and their employees, hearing directly about their struggles.

“If you’re young and you’re working from home, you may be sharing your home with others, which means that the space you’re using is cramped. If you’re older, you may have a family, which means young kids in the house. I know from experience, with my own children running around the house, that it was quite difficult to carve out the time for Zoom meetings.”

“Then there’s workplace education. Corporate culture doesn’t just benefit people by allowing them to socialise with their colleagues. One of the main ways new or entry-level staff learn is by listening to conversations that take place between the senior members of the firm.”

Nonetheless, the feedback from remote workers is overwhelmingly positive. The reason is simple. “There are a lot of people working from home who are delighted to avoid the long commute. For them, it’s a blessing.”

By cutting out travel, office workers have added free time to their day. If you spend an hour travelling to and from work, that’s 12.5% of the average adult’s waking life.

Remote workers significantly increase their ability to exercise their freedom on a daily basis – they can go for a walk, call over to a friend’s house, read a book, play with their children, or just lie in. Every single day they work from home, these opportunities are possible in a way they haven’t been before the pandemic’s restrictions.

And, of course, those benefits are supplemented by the fact that weekly expenses have suddenly and drastically been reduced. The cost of train tickets, road tolls, petrol purchases, not to mention work lunches and mid-morning coffees, have all been eliminated in one fell swoop.

But what about the employers? Aside from also being the beneficiaries of more free time – a powerful incentive to maintain the new status quo – conversations with senior management are cautiously optimistic.

Crucially, there hasn’t been a fall in productivity since remote working began. If anything, the indications are that productivity has increased, and when a workforce is happier at no cost to productivity, management takes note.

And if that weren’t enough of a bonus, one feature of the senior-level workload has greatly improved under the new conditions. This cohort typically attends several meetings a week, to engage with new clients, monitor projects, and update various boards and committees etc.

While ‘Zoom gloom’ is a phrase I have heard repeated, everyone is amazed at how the work required to attend these meetings has suddenly disappeared: no more searching for an empty room in the office large enough to accommodate everyone, fiddling with the adaptors and ports for presentations; no more expensive catering; no more travelling to hotels and event centres in another county to host a gathering of nationwide partners. Like a butcher’s knife, remote working removes all of the excess fat from the day.

However, as obvious as the benefits of remote working are to employees and management, this kind of consensus doesn’t necessarily translate into the momentum that is required to effect a lasting change. To predict whether remote working will affect us for long, we need to consider its impact on an economic and political level.

The Logic of Markets

On the economic side, there are two factors that ought to be discussed. The first can be summarised in one word: overheads.

The average rental price for prime real estate in Dublin’s city centre is €700 per square metre. A small company looking for enough space to accommodate five employees is liable to spend anywhere between €25-35,000 per annum on rent, excluding utilities.

The cost for the same small company is roughly halved if they re-locate to the suburbs. This means that no matter where this small company is located in Dublin, they save on average a minimum of €12,500 every year by switching to remote work. The closer they are to the city centre or the more staff they have to accommodate, the greater the savings once they decide to make the switch.

Corporate logic is simple and ruthless: minimise costs to maximise profits. Not only is this the rule of the game, but remember that the more profits a company makes, the greater its senior employees’ salaries – another incentive for the managerial class to allow remote work. For many business insiders, other rationalisations pale in comparison to this one. The wheels of free-market capitalism spin tirelessly, and when money can be made using new means, those means will be rapidly employed.

The second economic factor relates to investment trends. Dublin’s office rental market is profoundly suppressed. According to the CBRE, only 15 new lease transactions were completed in the country’s capital between April and June. The number of vacancies rose. For the first time in years, no office leasing activity was recorded in Dublin’s south suburbs.

This trend minimally improved in July and August, but the market remains subdued. Nobody is expanding or relocating if they can help it, and the CBRE states that there has been an “increase in incidences of occupiers looking to sublet excess office accommodation in recent weeks.” In other words, companies are looking to downsize their on-site workforce and they want rid of the superfluous space.

As with any sector of the economy, the commercial office market is propelled by demand and investment. The greater the demand, the more investors are willing to fund construction and expansion projects, and as more money and capital gets tied up in the sector, its significance increases, leading to more investment and greater leverage in the economy. Dublin’s office rental market has flatlined for six months, and though signs are that it won’t get worse, investment portfolios have begun to turn elsewhere.

In fact, as Marie Hunt of the CBRE explained to me, investment portfolios were already veering away from Dublin’s commercial office sector before the pandemic, favouring instead multi-family units. “In the last few years, you’ve seen a shift in corporate investment strategy, away from the office sector toward the residential.

Historically investors in Ireland bought individual properties, building up a portfolio over time. The term ‘multi-family unit’ was coined to explain the kind of investment we have seen since 2012 whereby large investors buy a block of apartments or housing – 50 to 100 units plus.”

In the wake of the global financial crash, “several funds saw an opportunity to buy a lot of cheap residential units and converted them for rental. Since then you’ve just seen more and more capital flooding into that space. Up until recently, they were buying those blocks to rent to the private sector. Now they’re leasing entire blocks to local authorities or housing bodies, backed by government money.”

The pandemic’s restrictions will only accentuate this trend, and investment in the office sector will decrease further.

A New Political Football

But hang on, you might be thinking, what about the existing infrastructure that facilitates office work in Ireland? Surely the owners and beneficiaries of that infrastructure – the money and capital it represents today, as opposed to ten years from now – will lobby aggressively for the elimination of remote working?

This is where things get interesting. Whatever workers and the profit-motive might suggest, remote working will face an uphill battle unless the political class have a stake in arguing for its continuation.

This stake exists, at least for every politician outside of Dublin. Those politicians will want the continuation of remote working for one simple reason: regionalisation.

Employment is arguably the single biggest driver of migrant activity in the state. People flood to the nation’s capital for jobs and every person that leaves an area to pursue their career in Dublin is another person not paying taxes locally, or spending in the local shop and cafe, or contributing to their local theatre group, GAA club, or political party etc. The lure of Dublin’s job market is a financial and social drain on the rest of the country.

Now consider someone looking to buy their first home. For the same money, would you rather get a mortgage on a 2-bed flat in Dublin or a 4-bed house in Kilkenny? Many Dubliners would happily live elsewhere if it means that they could afford a larger space, with no cost to their employment. This is to say nothing of the area’s local community. Councillors and TDs will be able to bank on the votes of young professionals if they can claim some responsibility for those workers having the means to live in their hometown, at huge savings.

Ronan Lyons, Professor of Economics at Trinity College Dublin and an expert in the Irish property market, stresses this point. “Politicians will love this. They have been itching to take jobs from the cities and spread them out across all of the marginal constituencies in the country. This is their chance. They have been beating IDA Ireland and Enterprise Ireland over the head for decades, looking to get 20,000 high-paying jobs to the west of Ireland – not in Galway but in Sligo, Mayo, Roscommon and Leitrim.”

Lyons also makes an astute observation concerning the mechanics of our system of political representation: “as a sitting politician you don’t want the cities to attract a higher proportion of the population, because those will require more constituencies and TDs, and then your place is undermined.”

This means that politicians will argue for remote working as an instrument for regionalisation both out of obligation to their constituency (increasing their popularity) and for their own immediate personal gain.

And in case you missed it, the politicisation of remote working has already begun. The public sector, traditionally a staunch opponent of remote working, has just come on board. The Programme for Government published in June refers consistently to the benefits of remote working.

In the section dedicated to regional development, the Programme promises to “mandate public sector employers, colleges, and other public bodies to move to 20% home and remote working in 2021.” This means that public sector employees must be given the option to work from home one day a week, and as Lyons notes, “the public sector is a huge occupant of office space.”

The case for remote working continuing after September 13th is strong, but as we’re all aware, the future is increasingly difficult to predict. All we know is that we are in the middle of a grand social experiment, and with the announcement coming this week of Google’s withdrawal from a major office deal in Dublin, we may see changes happen very quickly.

Post by Tom Lordan.  Tom is a freelance journalist who writes about philosophy, politics and the arts. You can get in touch with Tom on Twitter here, Instagram here and LinkedIn here.