Research: 40% of employees will work from home by 2025

20 November 2020 5 min. read

By 2025, 40% of employees around the world will work from home, according to a new report by Tata Consultancy Services (TCS).

TCS surveyed nearly 300 senior executives across sectors in Asia, Europe and North America, two-thirds of whom came from businesses with $5 billion plus in revenues. The main aim of the study was to gauge how the corporate world is reacting to the pandemic and all its repercussions.

Executives were asked about: the impact of Covid-19 on their business; expectations of a recovery; changes anticipated in operating model; actions being taken in response; and planned digital investments. The central finding: businesses transitioned almost overnight to virtual working models, and many plan to stay this way.

Percentage of employees working remotely, across sectors and regions

In an average company, nearly 64% of all employees are working from home according to TCS, although some variations are apparent by region and industry. Labour intensive sectors such as manufacturing, packaged goods have lower ratios here – around 40% to 50% – as do key frontline sectors such as healthcare. On the flipside, sectors such as tech, government, insurance and financial services have around 70% to 75% of employees working from home. 

Regions that have imposed strict lockdown and travel restrictions – Asia Pacific and European countries – have a much higher ratio than North America, where measures have been infamously relaxed. At any rate, the average for these key markets evens out at more than two-thirds of the global workforce working remotely.

Notable is that nearly 40% of the workforce expects to be working from home even five years from now, which holds true irrespective of sector or geography. Indeed, this reflects one of the central learnings from the pandemic for businesses across the globe – productivity can be sustained even when working virtually.

Digitally advanced organisations are productive, secure and collaborative in remote work

Of course, a key factor here is the digital infrastructure at a business. TCS researchers put businesses into three categories based on their digital capacity: “Leaders who have strong digital capabilities, Followers who have weaker digital capabilities and a ‘Vast Middle’ of companies that fall in between.”

Strikingly, 100% of Leaders have managed to sustain productivity, security and collaboration even via virtual working arrangements. For the Vast Middle, this figure is just short of 70%, while nearly half of even the Followers bracket has managed the same. As it happens, this turn of events might just have transformed the workforce of the future.

The opportunity to work just as productively through virtual tools marks a big opportunity for businesses to cut on fixed costs such as office space and infrastructure, while also cutting time, energy and money spent on travelling. With many businesses adopting ‘net zero’ ambitions, virtual working is a way of cutting down a sizeable chunk of emissions.

Companies are investing to make work from home easier and more secure

Digital investments

Not surprisingly against this backdrop, TCS found a broad tendency to up investments in virtual working technology. Front and centre are collaborative technologies, which have drawn increased investment from 65% of companies since the pandemic began. Communications tools such as Zoom, Skype, Teams and other chat, email or information exchange platforms all fall within this category. 

Also on the agenda is better cyber security – drawing increased investments from well over half of all companies. The downside of virtual working is that it stretches a business’ IT infrastructure, throwing up a host of new vulnerabilities. Home WiFi networks are less secure, while people are more susceptible to phishing and other cyber attacks. If working from home is to become the norm, these gaps need to be shored up.

Other Industry 4.0 tech driving broader digital transformation efforts – cloud technology, advanced analytics and automation – have also seen a spike in investments from 30% to 50% of organisations this year. The digital imperative was key to competitiveness before the pandemic, and is key to survival now. 

“Even before the pandemic, the digital capabilities that companies possessed were rapidly becoming central to their success. As a result, digital transformation initiatives appeared to be happening everywhere. The Covid-19 pandemic, however, has served as a wakeup call. As out new survey found, many companies were not as far along in developing essential digital capabilities as they hoped they would be,” explained TCS’ Chief Marketing Officer Rajashree R.

In the new normal, clients and customers are expected to demand a little bit extra with every service, and businesses are putting the necessary technology in place to deliver.