The Covid pandemic has led to the largest shift in working practices and there are both positives and negatives emerging from this change, says the Bank of England chief economist Andy Haldane.

He notes the long-term effects of home working are not known but they could dampen creativity and productivity if human contact continues to diminish.

Haldane was speaking at the Engaging Business Summit and Autumn Lecture earlier this month and referred to a survey the summit had undertaken. It found that many people appear to be happier working from home and prefer it to working in an office.

Pre-Covid, most studies suggested home-working improved productivity although it depends on the type of work being done. Creative tasks appear to be more conducive to home-working.

Haldane then mentioned a survey of Bank of England staff that suggested, overall, they believe their productivity has not been much affected by home-working.

Commuting and empowerment

There are two key factors to the positive side of home working: commuting and empowerment.

People no longer have to spend time and money commuting and Haldane notes that in well-being studies, “commuting ranks just after death and divorce in the unhappiness stakes”.

The second positive element of working from home is improved worker empowerment. Home-working allows for flexibility, so people’s working day can be tailored more to personal needs and less to organisational requirements.

But the longer-term consequences of the shift to home-working are yet to be seen although there are two factors which could detract from both productivity and happiness at work.

Working relationships and creativity

These two factors which could impact negatively are working relationships and workplace creativity. Creativity fosters innovation and that in turn fuels economic growth.

Working from home can be quiet, with less distraction and noise than in a workplace environment, enabling concentration and creativity. But lack of distraction and noise is not always a good thing.

Haldan points out: “It is well-established that exposure to new and different experiences – sounds, smells, environments, ideas, people – is a key source of creative spark.”

Random conversations and chance meetings also fuel creativity, ideas and innovation but home-working can take that away.

The second issue is working relationships which need to be “fed and watered” in order to grow. Remote working inhibits our ability to cultivate and grow these working relationships.

Virtual meetings can be an efficient and often more effective way of getting things done than a physical meeting. But Haldane points out that virtual meetings risk losing the capacity to explore uncharted territory.

He says: “Those informal between-meetings conversations are, in my experience, the bedrock of relationship-building and the key to trust–building.

“I always knew that I picked up a lot of information from the unscheduled time between meetings, when informal and sometimes chance conversations take place. Having now lived without them for six months, I now realise these informal non-meetings were often my main source of information.”

Haldane doesn’t know if he is happier working from home but he thinks home-working has probably reduced his capacity for creative thought. A balance needs to be struck between both working from home and being in the workplace.

He says: “I do not miss the commute. But I feel acutely the loss of working relationships and external stimuli – the chance conversations, listening to very different people with very different lived experiences, the exposure to new ideas and experiences.

“These losses will grow with time. At some point, they will offset the benefits of avoiding South-West trains.”