Apr 27 2020
The COVID-19 (coronavirus) pandemic and closure of nonessential businesses has caused many people to work from home (WFH) in order to maintain business continuity. Working from home has been seen as a privilege throughout the years, but now it has become widespread due to social distancing. IBISWorld estimates that 20.4% of all services are conducted online in 2020, but this number is anticipated to increase as more businesses adopt a digital and WFH model. In this article, IBISWorld looks into the potential benefits and challenges of WFH across different industries.
Among the leading factors in favor of remote work is the cost-effectiveness. Maintaining a remote workforce typically reduces overhead costs and allows employees to save money on commute, wardrobe and food. According to Entrepreneur Magazine, each employee that works from home saves the employer $10,000.0 a year on related workspace and expenses. As WFH has taken hold, the number of services conducted online is expected to see a sharp increase that is likely to be sustained across certain service-based industries.
Still, some companies and industries benefit more than others. For example, Microsoft Teams and Zoom, both leaders in enterprise digital communications, have experienced a surge in usage during the pandemic. Retailers that are able to move their stores online will be able to keep revenue flowing. For example, the E-Commerce & Online Auctions industry (IBISWorld report 45411a) is anticipated to grow as an increasing number of businesses are leveraging their online presence. However, Internet Service Providers (51711d) have encountered both a decrease in demand from businesses due to temporary closures and an increase in demand from residential customers as more people are working from home. Furthermore, as corporate profit is anticipated to decrease as a consequence of the pandemic, businesses may seek to cut overhead costs. IBISWorld expects this to adversely affect office leasing activity; industry revenue for the Commercial Leasing industry (53112) is estimated to decline 7.3% in 2020 alone.
Working from home in the future, whether full-time or partially, could change business operations as a whole by cutting traveling expenses and real estate budgets. Businesses might invest more in technology and home office set ups in the near future to save on overhead costs. Still, manufacturers, wholesalers and other hands-on industries will not be able to make the digital shift. These industries are anticipated to make changes in the design of the work environment or office space such as rearranging furniture to keep practicing social distancing. The Office Furniture Manufacturing industry (33721) will likely see an increase in demand for more spacious desks and dividers as sanitation will be a top priority among businesses once people return to work.