The Salary Calculator

The working from home debate

by Madaline Dunn

Back in 2020, as the Covid-19 virus took hold of the world, working from home became compulsory for those who were able to do so. And so, for many, came the rise of endless Zoom calls and Teams meetings, virtual social lunches, much more time at home, and fewer hours commuting.

However, as the world has slowly gained back control over the virus, WFH has endured in many workplaces. That said, the majority of people still never work from home (63.9%), 21.4% work in a hybrid model, and only 7.8% of workers permanently work from home.

Yet, despite the above figures, and many who choose to work from home touting the benefits of doing so, recently Chancellor Jeremy Hunt, speaking at the British Chambers of Commerce conference, said workers should return to the office unless they had a “good reason not to.” One of the main reasons he cited included that WFH stifles creativity.

So, what’s the basis behind his argument, is there any truth in it, and what does the workforce think? In this week’s article at The Salary Calculator, we’ll walk you through:

• The statistics on productivity,
• How creativity is faring at home versus the office,
• How WFH impacts mental health and relationship building,
• What workers’ preferences are.

Variability in productivity

When it comes to productivity and WFH, depending on who you talk to or which sources you scan through, you’ll get a very different picture painted. For example, a study conducted by Stanford, which surveyed 16,000 workers over a nine-month period, found that for those working from home, their productivity was boosted by around 13%. A few contributing factors included having a quieter and more convenient place to work in and working more due to fewer breaks. Further, it wasn’t just productivity that was boosted; workers also said they felt more satisfied, and attrition rates were even cut by half.

This is supplemented by research from TechTalk which found that 55% of the 2,000 work professionals it surveyed concentrated better when working from home. Similarly, Gitlab found that 4 in 5 workers would recommend remote working to a friend, and 81% of people surveyed felt satisfied with remote working.

That being said, while individual productivity might be thriving in some cases, surveys show that teamwork isn’t faring so well. Gitlab, for example, found that only 37% said the organisation they work for does a” good job” of aligning work across projects.

Creativity in the workplace versus WFH

One of the main reasons Hunt has cited for a return to the office is his concern about creativity or lack thereof. However, while there is no definitive data, some research shows that employees can be just as creative, if not more so when working from home. Research from Better Up found that people were 56% more creative and thought more innovatively when working remotely.

Some of the reasons that the research team gave for explaining these results were that long commutes and excessive meetings, more time being alone and thoughtful, and being in a place of safety and strength contributed to more creativity. However, there are two sides to this, and research published in Nature on a field experiment across five countries actually found that more video-conferencing, something more prevalent in remote working, in fact, inhibit the production of creative ideas. Indeed, some workers are worried about this, with around 18% concerned about their creative output outside the office.

One of the common arguments regarding this is that without being in the office, workers don’t have the opportunity to bounce ideas off each other or spark up conversations that lead them down the road of innovation. There are no so-called “water cooler moments.” However, it really comes down to an individual’s working style.

Mental health and relationship building

A core issue often explored when discussing the WFH dynamic is how it affects mental health, well-being and relationships. Again, as with all of these areas, there’s a huge level of variability.

That said, isolation is often a common concern for those working from home. One study found that 81% of younger workers said they would feel more isolated solely working from home, while another study found that 60% of workers felt less connected to colleagues.

Further, many workplaces appear to be failing to provide their employees with additional resources to cope with these new challenges. In fact, one study found that under 30% (29%) are doing so. At the same time, around 19% of workers like WFH because it allows them to avoid office politics.

It’s not just work relationships that can be negatively impacted by working from home, though, according to experts, it can also put a strain on home relationships, for example, with a partner. This is often put down to being “physically present” but “unavailable” or due to letting work seep into home life.

Linked with this is the question of work-life balance. Living and working in the same space can make switching off difficult, with a reported 32% of workers finding it difficult to do so. This is especially true for those working in their bedrooms (17%) and living rooms (27%). Working in the former can also be bad for productivity and negatively affect workers’ ability to sleep. According to Hubble research, Gen Z reportedly struggles with this the most.

What are workers’ preferences, and what does the future hold?

So, all things considered, what are workers’ preferences? Do people enjoy WFH, hybrid or office-based working? Well, a wide range of contributing factors affect this, and it appears that age group also has a part to play.

According to Deloitte, 77% of Gen Zs and 71% of Millennials would consider looking for a new job if told they had to return to the office full-time. Meanwhile, another piece of research found that two-thirds (66 per cent) of workers aged over 55 years old prefer hybrid working.

Elsewhere, a study by Hubble found that, interestingly, Gen Z were the most “pro-office” group, while Gen X and Baby Boomers were more “pro-WFH.”

It’s likely that preferences will also depend on whether or not workers have young children; after all, WFH allows much more flexible scheduling (perceived as the main benefit for 50% of workers). Likewise, another factor is how far away a worker lives from their place of work; lack of commute is the secondary draw to WFH for 43% of respondents after flexible scheduling – this comes with big savings, too, a draw for 33% of people.

While the research shows that different groups might prefer different models of working, a key insight from research in this area is that workers like flexibility and the option to choose where and how they work.

Looking ahead, while the likes of Hunt may consider WFH to be detrimental to employees’ performance, it looks like it won’t be going anywhere anytime soon. Moreover, leaked Labour policy documents reveal that the party is even planning to make flexible working a legal right. So, watch this space.

Tags: Economy, hybrid, Working from home, working week

The cost of living crisis: Working from home versus at the office

by Madaline Dunn

The working from home revolution has brought many people flexibility, more job satisfaction and savings; however, as the cost of living crisis bites, some are starting to weigh up whether it’s still a better option than in-office working. As the winter months draw nearer, some think that returning to the office might help them save money.

At The Salary Calculator, we’ll explore:

• The current cost of living crisis and employment trends,
• The cost of working from home,
• Whether working from the office can save you money.

Cost of living hike and employment trends

According to figures from the ONS, around 40% of adults in Britain now work in a hybrid working model, with 30% of the UK workforce working from home at least once a week – 8% of workers didn’t even step foot in the office for the entirety of 2021. Research from last year also found that around 70% believed that workers would never return to the office in the same way ever again, with the majority expressing a preference to work from home either full-time or “at least some of the time.”

However, this was before the cost of living crisis had taken a turn for the worst. Now, around 89% of adults (46 million people) report that their cost of living is continuing to increase. While almost everything is on the rise, with Citi investment bank warning that inflation could exceed 18% in January, rising heating costs are for may their primary concern. It’s not surprising considering that the energy price cap was due to reach £3,549 a year in October. However, the new Energy Price Guarantee means that a household with average usage will pay £2,500. This means that the 80% rise in energy bills that was due to come into effect on 1 October will be avoided, but many will still be faced with bills they can’t afford.

As Paul Johnson, director of the Institute of Fiscal Studies (IFS), says, the energy freeze is “very poorly targeted” and one that will benefit “better-off people.” This was echoed by Torsten Bell, the Resolution Foundation’s chief executive, who said, despite the support being “big” and “bold,” families should still expect a “tough winter ahead, with rich households getting twice as much cost-of-living support as poorer households next year.”

Experts forecast that without the government intervening, the number of UK households in fuel poverty could reach 12 million by January, with The End Fuel Poverty Coalition highlighting that 42% of households will be unable to afford adequate heat and power from January. The situation is so dire that the head of the World Energy Council (WEC) has said that the UK will have to begin to develop a spirit of “radical generosity” in order to prevent the loss of lives.

With energy becoming so expensive, it appears that the trend of working from home may phase out. So let’s break it down – which option is cheaper?

The cost of working from home

According to Uswitch, by winter, those working from home, rather than the office five days a week, will use around 75% more gas each day and 25% more electricity. Analysis from New Statesman’s business editor Will Dunn also found that poorly insulated homes in the UK could cost over £30 a day to run. Considering that a study conducted by EDF in partnership with property data platform, Sprift, found that only 58% of the 21 million homes across England and Wales studied meet insulation standards of 1976 or earlier, many people will find themselves paying more.

Specifically, research shows that from 1 October, a large 32kW boiler will cost £4.80 an hour to heat, boiling a kettle will cost 10p, and running a desktop PC and monitor will add £1.25 a day at the new rate of 52p per kilowatt hour. However, on the childcare front, while not always ideal, working from home can mean that you pay less in childcare costs.

Speaking about this, Uswitch energy spokesman Ben Gallizzi said: “Using extra energy when the heating would usually be off will be especially noticeable on bills this year with prices rising by 80%.” Adding: “Not only do people working from home use more energy staying warm, they are also cooking lunch and making cups of tea, as well as running computers, TVs and phone chargers.”

Can working from the office save you money?

Many of those working from home are beginning to feel the pinch, and research from MoneySupermarket.com shows that now around 14% plan to head to the office more often to help save on energy bills. Interestingly, this figure rises to 23% for those aged 18-24 years old.

That said while returning to the office means you’re likely to save on energy bills, it will cost you in other respects. Working from the office means travelling in, and transport costs are currently also pretty high. 

If one travels by car, factoring in Confused.com’s estimate that the average daily commute equates to 5,040 miles a year, and NimbleFins estimation that the real total cost per mile of driving is roughly 47p, this means annual commuting costs will reach around £2,370.

If you don’t drive, travelling by train can be equally, if not more expensive than driving. New rail fares mean that the current price of the typical annual rail season ticket is £3,263, which is due to rise further by £433 next year. Meanwhile, The Times reported that a return journey from Reading to London would see commuters pay £4,860 for an annual season ticket, which is also £93 a week. The paper made a point to outline that this doesn’t factor in additional costs, for example, buses, Ubers and taxis from the station to your place of work. A monthly Oyster Travelcard for TfL services, for example, costs between £147.50 to £270 per month.

For parents considering returning to the office, it’s also important to take into consideration childcare costs. Childcare can be expensive, with research from the Coram Family and Childcare charity finding that the average price for children under two in a part-time nursery sets parents back around £138.70 a week. Money Helper reveals similar figures, with a full week of childcare costing £263.81 a week, which, over 39 weeks, reaches £10,289.

Final thoughts

With so many variables to factor in, the best way to determine what will be best for you and your finances is to review your bank statements and reflect on where you can make savings. If you’re able to travel to work via a less expensive medium of transport, pack your own lunches, and, if you have children, find suitable and affordable childcare, returning to the office might work in your favour.

However, if you live a significant distance away from your workplace’s office and would have to use public transport for travel, it might be best to continue as you are. Moreover, there are some hints and tips that can help you save energy when working from home, for example:

• Turning your appliances off at the mains can save you £55 a year,
• Ensuring you turn off the lights in rooms you’re not using can save you £20 a year,
• Switching to energy-saving light bulbs can save you £13 per bulb per year,
• Turning your thermostat down by just 1 degree can save you £150 a year,
• Only filling the kettle with what you need can save you £36 a year,
• Covering your pans with lids means your food will cook quicker, and you’ll use less energy – likewise, if you’ve got electric hobs, make sure to keep them clean; dirt and grease will make them less energy efficient.

While these savings may seem small in the grand scheme of things, they will all add up and leave you with more money than you expected while exerting minimal effort.

Tags: cost of living, Economy, Jobs, Working from home