[Real Beat] Experiments Conducted Worldwide... How COVID-19 Changed Workspaces

Office Shift② Why Has Our Workplace Changed?

Editor's Note[Jjinbit] is a shortened form of 'Jeong Hyunjin's Business Trend' and 'Real Business Trend,' a segment that showcases trends in the changing nature of work. The segment within Jjinbit called 'Office Shift' closely examines changes in offices triggered by the COVID-19 pandemic and aims to lay the groundwork for exploring answers to new work styles through experiments we have experienced together.

[Asia Economy Reporter Jeong Hyunjin] "COVID-19 forced the world's largest work-from-home experiment."

Bloomberg reported this on February 3, 2020. It was less than a month after COVID-19 began spreading worldwide. Governments around the world implemented lockdowns and issued bans on gatherings. Companies had no choice but to close their office doors. Office workers who used to work together in one space were confined to their homes by government and corporate policies. Instead, they started working in virtual spaces online. Amid fears that meetings would spread the virus, the world conducted a large-scale work-from-home (WFH) experiment without any preparation. It was an unexpected situation.

[Image source=Reuters Yonhap News]

South Korea was no exception. In early 2020, at the start of the COVID-19 spread, if even one confirmed case occurred in an office, the entire building was shut down and everyone in the space had to be quarantined. In May of the same year, a COVID-19 outbreak originating from Itaewon occurred domestically. What seemed like a situation that would end quickly became prolonged. Various variants spread. The government strengthened social distancing measures day by day. In this new environment, companies had to find ways to continue their work. By the end of the first half of 2020, domestic companies began to adopt work-from-home systems one after another.

◆ South Korea’s Work-from-Home and Remote Work Share Rose from 4.3% to 17.4% in One Year

Most companies worldwide had no choice but to participate in experimenting with new work styles. Work-from-home was already a form of work being experimented with in some places, thanks to advances in technology such as phones, messengers, and video chats. However, not many companies had adopted it, nor had many employees experienced it. COVID-19 acted as a kind of 'trigger.' American futurist Alvin Toffler first mentioned the term work-from-home in his 1980 book "The Third Wave." Toffler predicted that the information revolution, the third wave, would occur within 20 to 30 years, but work-from-home was forcibly implemented much later than that.

According to a report by the International Labour Organization (ILO) released in March 2021, about a year after COVID-19, the proportion of workers working from home worldwide in the second quarter of 2020 was estimated at 17.4%, or 557 million people. This was based on a preliminary survey conducted in 31 countries, surveying 33 households per country, extrapolated to the total workforce. Before COVID-19, a survey conducted in 118 countries showed that 7.9% of workers worked from home. This included self-employed workers such as skilled craftsmen and tailors, and excluding them, only 3% of employees working for companies worked from home, according to the ILO. Considering this, the global proportion of work-from-home workers increased nearly sixfold after COVID-19.

By country, the proportion of work-from-home workers also increased. According to the research group WFH Research, the share of work-from-home in the U.S. was only 4.7% before the pandemic but surged to 61.5% around June 2020. After an adjustment period, the share gradually decreased. According to Eurostat, the statistical office of the European Union (EU), 12.3% of EU workers aged 15 to 64 worked from home in 2020. This figure, which had been around 5% for the past decade, more than doubled. Within the EU, Finland had the highest share (25.1% in 2020), followed by Luxembourg (23.1%), Ireland (21.5%), and Austria (18.1%).

In South Korea, according to the supplementary survey on work types in the Economically Active Population Survey by Statistics Korea, only 95,000 workers experienced work-from-home or remote work in 2019. However, this number surged to 503,000 in August 2020, right after COVID-19. The number of workers using flexible work systems such as reduced working hours, staggered commuting, selective working hours, and flexible work systems increased by nearly 700,000 from 2.215 million in 2019 to 2.898 million in 2020. In terms of proportion, the share of workers using flexible work systems among all wage workers increased from 10.8% to 14.2% during the same period, and the share of work-from-home or remote work among flexible work types increased more than fourfold from 4.3% to 17.4%.

◆ Thought It Would End Quickly... But It Became a Long-Term Battle

The large-scale experiment that started was expected to end quickly. However, as the COVID-19 situation prolonged, it changed the daily lives of office workers and even the perceptions of companies and employees. With various variants such as Alpha, Beta, Delta, and Omicron emerging one after another, it became difficult to determine when to return to the office. The new work method began to be accepted as a form of work that could be applied long-term, not just as an emergency work system applied temporarily for one or two weeks or a month. In the workplace, all existing technologies were mobilized to adapt to the new environment. Through this process, it was confirmed that work could proceed relatively similarly to the past.

Take the example of Apple, a leading U.S. big tech company. When COVID-19 spread, Apple CEO Tim Cook sent a memo in early March 2020 directly recommending work-from-home to employees worldwide. The initial period Cook mentioned for work-from-home was only one week (March 9?13). However, as the pandemic continued, this measure had to be extended. Bloomberg reported that in a virtual town hall meeting with employees in December of the same year, Cook said it would be difficult for most employees to return to the office by June 2021. He viewed the work-from-home period as about six months. Apple tried to push for office attendance in July 2021, but extended the work-from-home period as the Delta variant spread. Six months later, in December 2021, with the spread of Omicron, the office return was postponed indefinitely again.

As the COVID-19 situation prolonged, domestic large companies announced 'in-house quarantine measures' to manage the situation. Especially, they adjusted the proportion of employees working from home according to changes in government social distancing measures and limited the number of people attending face-to-face meetings and training. Facilities such as fitness centers and lounges, which employees actively used, were also subject to government restrictions. Domestic and international business trips, which were completely halted at the beginning of COVID-19, were handled with a 'rubber band' approach, lifting or tightening restrictions depending on the pandemic situation. Some business trips that were previously considered essential to be face-to-face were switched to video calls.

How did the proportion of work-from-home workers domestically and internationally change after the early COVID-19 period in 2020? According to WFH Research, the proportion of U.S. workers working fully from home surged to 60% in early 2020, then dropped to about 37% in early 2021, and as of January 2023, fluctuates around 30%. The proportion of full work-from-home in the U.S. seems to be converging around 30%.

South Korea shows a slightly different trend. The proportion of work-from-home and remote workers in South Korea surged from 17.4% in 2020 to 32.3% in 2021, then slightly decreased to 27.5% in 2022. The number of work-from-home and remote workers, which was about 95,000 in 2019, increased to 1.14 million in 2021, then decreased to 956,000 in 2022. Unlike the steady decline seen in the U.S. after 2020, South Korea peaked in 2021 and then showed a decreasing trend.

◆ The 'Great Resignation' Era... Revealing the Reality of Work-from-Home Demands

The neologism 'Great Resignation,' born in the COVID-19 era, best reflects workers' needs for flexible workspaces. Organizational psychologist Anthony Klotz, an associate professor at University College London (formerly at Texas A&M University), first introduced this term in May 2021. It refers to the phenomenon of large-scale voluntary resignations, which was particularly prominent in the U.S. According to the U.S. Bureau of Labor Statistics (USBLS), the number of non-farm resignations in the U.S. exceeded 4.5 million in November last year, the largest ever, accounting for 3% of the entire U.S. workforce.

According to Klotz’s explanation on the Washington Post (WP) broadcast in May 2021, this phenomenon occurred as workers who could not quit their jobs, suffered burnout, experienced a shift in life perspective, and adapted to work-from-home but did not want to return to the office, left their companies. As the economy was expected to recover and employment expand after COVID-19, the balance of power shifted from employers to employees. Naturally, workers’ voices demanding flexibility in work location and hours gained strength. Companies, for whom talent acquisition was a top priority, accepted and even proactively offered these demands. This trend continued until concerns about an economic downturn spread in 2022, triggering layoffs in the IT industry.

A survey conducted by Slack’s research consortium Future Forum in July?August 2021 of about 10,000 knowledge workers in five countries including the U.S., Australia, France, Germany, Japan, and the U.K. found that 76% of respondents wanted flexibility in work location, and 93% wanted flexibility in work hours. Dan Cable, a professor at the London School of Economics, said in an interview with an internal newsletter, "For many, the pandemic provided an opportunity to explore new ways of working and discover what yields the best performance. Ignoring what we have learned and returning to pre-COVID-19 ways will cause tremendous anxiety. Leaders who ignore this will pay a price."