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Rise in working from home could be negatively impacting UK economy

A 10 month research project led by Southampton University looked into the economic impact of the work from home revolution that was sparked by the pandemic,

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Rise in working from home could be negatively impacting UK economy
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The post-Covid work from home revolution has not helped to level-up struggling regions of the UK, and may even make matters worse, research has revealed.

A 10 month research project involving De Montfort University Leicester (DMU) and others looked into the economic impact of the work from home revolution that was sparked by the Covid pandemic of 2020.

At the time it was widely thought that changes in working practices would redistribute wealth around the regions of the UK as well-paid workers in high-skilled occupations dispersed around the county.

However, research led by Southampton University, and involving DMU as well as the Universities of St Andrews and Birmingham, and University of the Arts London, found that most home workers still follow hybrid patterns, splitting time between home and office, and staying within reach of major employment hubs.

This limits the potential to reduce regional inequality or boost growth outside South-East England.

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The research team analysed data from the UK Household Longitudinal Study and Labour Force Survey.

They also conducted interviews with stakeholders from local and regional government, and businesses in three ‘second-tier’ regional cities: Glasgow, Sheffield and Birmingham, each of which has a distinct economic profile and changing patterns of employment.

Findings revealed that among all workers in the UK, just over 52% never work from home, but among high-skilled workers this figure is just 29%.

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The majority of those who do work from home do so in a hybrid pattern, with at least some days spent in the office.

The research project called ‘Regional differentials, changing working patterns and high-skilled labour mobility’, was funded by the Economic and Social Research Council (ESRC) and Ministry of Housing, Communities and Local Government (formerly the department for Levelling up).

Jonathan Payne, professor of work, employment and skills at DMU’s Faculty of Business and Law, explained: “There was an expectation after Covid that the ability of large numbers of highly-skilled workers to work largely or exclusively from home would lead many to relocate to parts of the country outside London and the South East, and that this might help reduce the UK’s long-standing regional inequalities.

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“However, we have found little evidence of this happening. Hybrid working is more common than fully remote working, and remains largely concentrated among highly-skilled workers in these already affluent areas.

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“Whether new working arrangements have settled into a ‘new normal’ remains unclear. Regional hub cities will continue to be key sites for firms, but their shape is likely to change as a result of hybrid working.”

He added: “Policymakers, businesses and local leaders need and more and better data on the relationship between working from home and the residential mobility of highly-skilled labour, which could help inform local growth plans and place attractiveness strategies.

“However, new working patterns do not offer an easy solution to inter- or intra-regional inequalities, let alone inclusive growth.”

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