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08 June 2022

Homing instinct: is hybrid working reshaping London?

Mark Kleinman

Workers in the capital appear to have embraced hybrid working

WorkPlace blog

Mark Kleinman is Professor of Public Policy at King's College London.

20 years ago, with four colleagues, I wrote a major study of London which analysed the capital’s resurgence after decades of decline. “Big cities,” we wrote, “are again big news”, and we titled our book Working Capital, reflecting our view that the impact of economic economic growth was the key factor in understanding how the city had changed. We quoted William Cobbett from 1830: “What is to be the fate of the great wen? The monster, called… ‘the metropolis of the empire?’”, and we also quoted Madonna, presenting the Turner Prize in London in 2001: “Is it nice to win 20 grand? Definitely – but after spending time in this city, I can tell you it won’t last very long.”

Is London now on the cusp of another major change, this time driven by the hybrid working revolution? In new research by King’s College London’s Policy Institute at Business School, we surveyed more than 2,000 London workers to see how they are working now, what the impact has been, and how they think it will affect the capital.

What did we find? First, that there has been a huge shift in working patterns. Six in 10 London workers say they are now hybrid working, as defined by working from home at least one day a week and from their workplace fewer than five days a week.​ Of those in work at the time, 37% said they worked from home at least one day a week on average before the pandemic. Now roughly double this proportion – 75% – report doing so in the past four weeks.

Furthermore, our sample saw this change as permanent – three-quarters of London workers think we will never return to the previous way of working where most people come into their workplace five or more days a week.

It is clear why people think this. High proportions of London workers say they have experienced benefits from working from home (WFH) and that it is better for people’s quality of life. They are even more likely to feel in control and generally connected to things that are important to them. On a more practical level, the lack of a commute is seen as the top benefit of WFH, followed by being able to manage home/social responsibilities – and gender and childcare responsibilities are associated with differences in views.

We also found that these views were widely shared, with relatively small differences across personality type, age and political support. And despite suggestions that new ways of working have the biggest benefits for people who are more introverted, extroverts are nearly as likely as introverts to cite benefits of WFH that relate to wellbeing.

Only a small minority think those who WFH are less productive – most people disagree with this view, regardless of politics, age or seniority, while there is also a perception that the media exaggerates the negative impacts of WFH.

Furthermore these views seem to be driven by positive feelings about WFH rather than office phobia, aka “David Brent syndrome”. Hence, ideally, most London workers would like to WFH three or more days a week and go into their workplace the rest of the time.

So are we on the cusp of a new working Utopia with no downsides? Workers in the capital aren’t sure: there is little consensus on whether WFH threatens the quality of life in the city or future jobs, and a third go as far as to say there’s no point living in London if you’re able to work remotely – only slightly less than the 43% who disagree with this view. There is also a sense that the move towards WFH will have a greater negative impact on younger people’s careers than those of older workers.

While London workers appear to have embraced hybrid working and WFH, it is by no means clear that this is a long-term positive for London’s economic growth and development. Workers themselves may think they are just as productive at home as in the workplace, but the quantitative evidence on productivity impacts of WFH tends to point in the opposite direction, as Cristian Escudero and I have shown in a recent paper.

Fundamentally, it is the benefits of “agglomeration economies”, such as connectivity, proximity and serendipity, that have driven the growth of London – from the coffee-houses of 18th century London to the tech clusters of the 21st. These benefits have not disappeared, and it is hard to see how “Nespresso for one” across a distributed workforce can act as a substitute. Moreover, there is no clear model emerging for how to coordinate home/workplace decisions by individual workers so as to maximise their productive collective in-workplace dwell time. As one expert recently put it: “It’s really hard to get anybody to come to a party if everybody RSVPs ‘maybe’.”

So the London economy – the most productive part of the UK economy – may need its workers to spend more time in the office than they are currently doing. But politicians and policymakers will first have to recognise the deep commitment to flexible working that is already embedded. Those workers who have the ability to WFH – and let’s not forget that there are substantial numbers whose work requires them always to be at the workplace – have experienced increased control over their working lives over the last two years. From the evidence of our survey, these are benefits they will not lightly give up.

21Jul

How WFH is changing London

How do London workers really feel about WFH, and will things ever go back to the way they were?