How can remote working support levelling-up?

Blog posts

8 Sep 2022

Daniel Muir, Research Economist (Officer)
Astrid Allen, Research Fellow
Rosie Gloster, Principal Research Fellow 

The government has an ambition to ‘level-up’, overcoming long-standing regional inequalities. The knowledge industries have historically been concentrated in London and the South East of England. There has been a graduate ‘brain drain’ from the regions to London, contributing to high house prices and an imbalance in regional skills. Alongside investment in the types of capital (physical, human, intangible, financial and social) identified in the Levelling-Up White Paper, which does not explicitly mention remote working, how might remote working contribute to levelling up? What could government do to capitalise on this trend? What contribution can employers make?

Opportunities to level-up from working remotely are not the same between locations

London has both the highest rate of remote working (January to March 2022) and the largest increase in remote working since pre-pandemic (ONS, 2022). Across the UK, there is variation in the prevalence of remote working between local authorities, and this has changed over the course of the last two years. For example, Stevenage, which now has one of the highest proportions of advertised working from home vacancies (21 per cent), had less than 1 per cent of vacancies advertised as work from home at the start of the pandemic (the first week of March 2020). This story of a rapid increase in the prevalence of work from home vacancies since the pandemic is very common for local authorities across the nation. It is not, however, uniform.

Looking at a recent snapshot of data from Adzuna (February 2022), large urban hubs including Manchester, Bristol, Leeds, Cardiff, Glasgow, Edinburgh and Birmingham are amongst the areas with the highest prevalence of work from home vacancies, all above 15 per cent. Conversely, the local authorities with the lowest prevalence of advertised working from home vacancies are mostly rural regions, including the Orkney Islands, Rhondda Cynon Taf and the Forest of Dean, although more urban areas including the London Boroughs of Greenwich, Enfield and Havering, and the Thames Estuary areas of Thurrock, Dartford and Gravesham also have limited working from home vacancy opportunities (all below 4 per cent).

The sectoral and occupational mix of places helps explain whether areas are creating vacancies that could be ‘exported’ to individuals located in other areas, or whether they are likely to be an ‘importer’ of these jobs. Certain sectors naturally lend themselves more to being undertaken remotely. Sectors with the highest proportion of vacancies advertised as working from home positions include, Information Technology (27 per cent, 2nd of 27), Accounting and Finance (20 per cent, 5th) and Legal (19 per cent, 6th). As might be expected, industries least likely to be advertised as working from home include Domestic Help & Cleaning (0.4 per cent, 30th – last), Hospitality and Catering (0.6 per cent, 29th) and Manufacturing (1.1 per cent, 27th) – essentially, roles that need to be done in a physical setting.

There are benefits from remote working when managed effectively

As the data shows, employers have increased the number of advertised work from home vacancies over the last two years. This will help to increase the diversity of the people they employ and deliver a competitive edge, enabling them to attract workers from new talent pools and enhance creativity within their organisations. Encouraging more locally diverse job applications represents a major opportunity for organisations when competing for workers in the current climate. Working from home allows workers to maximise their real pay by working in areas with lower costs of living and reducing travel costs. Having workers from across the UK brings new perspectives to an organisation and, crucially, allows organisations to better reflect and serve diverse customer bases.  Employers will need to carefully consider the sustainability of this approach. They need to thoroughly consider opportunities for bringing staff together, virtually and (where possible) in person to build social capital and combat isolation.

As well as allowing more people to secure jobs, it is important to recognise that working from home opportunities allow more people to stay in jobs that they would otherwise leave – maybe because of a chronic illness, caring responsibilities or simply because they want to live in a different location to their employer. Every employer knows that retention of staff is a major factor for a successful business. To give an example from one organisation who has implemented remote working for their staff: “Colleagues who may previously have reduced or condensed their hours to enable spending time at a parental home hundreds of miles away, now have much more flexibility to work from multiple home locations, which is better for them, their loved ones and the employer.”

There is though considerable variation in the prevalence of working from home across regions even when accounting for industry composition (ONS, 2022), suggesting that more working from home options may be available, but not currently advertised. Employers should review their approach, advertising potential work from home opportunities to ensure that they are maximising them.

Government has a role in maximising the opportunity for local economies

Organisations supporting people to enter the workforce, such as jobseekers or people leaving education, need to support individuals to demonstrate they can work at home. These skills include having the ability to work independently, be self-motivated, and having strong digital skills, among others. Government should recognise and support the opportunity that remote working represents.While it has developed strategies to address regional inequalities, it has underplayed the potential role of remote working. Whilst it brings its challenges, working remotely presents an opportunity to distribute wealth more evenly across the UK.  ‘Knowledge’ jobs that do not have to be delivered in a specific physical setting, offer the most potential for working from home. Places need people skilled to undertake this work, and the infrastructure to support them, such as high-speed broadband and co-working spaces.

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Any views expressed are those of the author and not necessarily those of the Institute as a whole.