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UK pivot to hybrid tech could add £76bn to GDP
Study shows rise in hybrid working could boost GDP by £48bn annually as part-time workers increase hours and investment in hybrid technologies could add nearly £80bn over next four years
Hybrid working will likely be the default mode of operation for firms in the post-Covid environment and could likely bring back nearly four million people currently seen as “locked out” from work, according to a study by Virgin Media O2 Business and the Centre for Economics and Business Research (Cebr). This could add £48.3bn to the UK economy each year, with investment in technologies that enable hybrid working and digital innovation potentially adding £76bn in GDP to the UK economy by 2025.
The study, which examined how Covid-accelerated digital transformation will reshape the British economy, was designed by Cebr in collaboration with VMB and undertaken by Opinium, which surveyed 502 decision-makers between 1 and 10 July. A separate survey of 2,000 consumers weighted to be nationally representative was conducted between 13 and 17 July 2021.
The study noted that the mass adoption of hybrid working would bring people such as parents, carers and disabled people into the workforce and enable part-time workers to do more hours. It also revealed that the potential for part-time employees to work more could lead to an additional 1.27 billion hours worked every year.
A driver for this addition was the finding from the study that 45% of Brits who are currently out of work would be able to start working if they could do so remotely. Unemployed carers were among the main beneficiaries, with 52% more inclined to work remotely, along with parents (49%) and disabled people (40%) whose circumstances mean they’re locked out from 100% office- or site-based work.
In total, increased hybrid working was found to potentially mean an additional 3.8 million people could enter the workforce, including 1.2 million parents, 1.5 million people with disabilities, 500,000 with caring responsibilities and 600,000 others who are currently out of work.
Of the UK’s 8.6 million part-time workers, more than two-fifths (43%) said they would increase their hours if they could work remotely. On average, hybrid working would enable part-time workers to work 5.1 more hours each week, with increases reported for disabled people (five hours), parents (5.3 hours) and carers (6.8 hours). The number of extra hours worked could equate to 631,000 full-time employees entering employment and would provide a huge financial boost to some of the country’s poorest families.
Moreover, the survey suggested that hybrid working could enable part-time workers to earn £3,600 a year of extra income, or £69 every week. In particular, it calculated that part-time carers, who would benefit most from remote working solutions and could work nearly seven additional hours every week, had the potential of earning an additional £4,800 per year, or £92 every week.
These figures were calculated by considering the potential increase in hours worked by part-time workers if offered a remote working solution alongside median hourly earnings (as of 2019 wages). By this method, the overall uptick in extra hours worked in hybrid roles was calculated to be able to boost GDP by £48.3bn every year, equivalent to a 2.4% uplift in GDP.
This comes ahead of government proposals on flexible working which are expected to give employees the right to request flexible working arrangements as soon as they start a job.
Encouragingly, and in contrast to other reports in the subject area, the report revealed that employers and employees shared similar views on hybrid working and each party recognised many positive aspects of working more flexibly 18 months after lockdown restrictions were first imposed.
Just over a third (36%) of employees reported being more productive – and furthermore feel more in control of their work (34%), trusted (26%) and empowered (27%) – with 20% of workers being less distracted when working at home.
More than two-thirds (69%) of business leaders expected changes to working policies driven by Covid-19 to be made permanent. This has been motivated by growing demand among employees for better work-life balance, with 85% reporting that working remotely offers them additional leisure time to relax, see family and friends, or spend time pursuing hobbies.
There was also close alignment between organisations and their people on what they view as the optimal working arrangements in the future, too. Employees now expect to work remotely 2.5 days per week, while company leaders also expect employees to work remotely about half of the week (2.3 days).
The report also highlighted the critical role that sustained investment in hybrid working and digital technologies will play in helping the UK economy bounce back from Covid-19.
Looking forward, the survey made the bold prediction that the increase in hybrid working, alongside the digital delivery of services and the use of big data by organisations across private and public sectors, could lead to a boost of £76bn to UK GDP within just the next four years and result in a net uplift of £236bn by 2040. The survey noted this latter figure was mostly additional to the boost the UK economy would receive by bringing 3.8 million people back into work and encouraging part-time workers to work more hours in hybrid roles.
“Covid-19 means hybrid working is no longer a nice to have – it’s become an expected and essential part of modern work which boosts the business bottom line while creating opportunities for nearly four million people currently locked out of jobs,” said Jo Bertram, managing director of business and wholesale at Virgin Media O2.
“By unlocking a deeper pool of talent and creating opportunities for more people, hybrid working offers businesses and society the opportunity to bounce back stronger. Organisations that embrace it will sprint ahead by attracting the best people, boosting productivity and creating a more diverse and inclusive workforce. The UK has made years of digital progress over the past 18 months and now’s the time for business leaders to build on this momentum and commit to a hybrid digital future. That means investing in technology that helps people work smarter, boosts productivity, all while helping achieve better societal outcomes and adding £236bn to the UK economy.”
Cebr chief executive Nina Skero added: “Covid-19 had serious economic, societal and emotional impacts. But it’s clear that technology and new ways of working provide a pathway to recovery – one that won’t just take us back to where we were, but which could make things significantly better than before. By continuing to digitise and embrace hybrid working models, businesses and public sector organisations can fundamentally transform the economy – unlocking a massive GDP uplift, boosting productivity and building a more inclusive society.”
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