[Special Feature: Working Styles in the Post-Office Era] Telework and Changes in Working Styles During the COVID-19 Pandemic

2020/12/07

Initially, telework attracted attention as a measure for work-style reform due to its ability to make working hours and locations flexible, and it has gradually spread. In this context, the COVID-19 pandemic spread in 2020, and telework, which allows people to avoid person-to-person contact, has gained attention as an effective means of preventing the spread of the infection. Balancing infection control with economic activity is difficult, and the promotion of telework has been called for regarding work. Although commuting increased again after the state of emergency was lifted, telework has taken root and spread to some extent, and it seems that our way of working is gradually changing. This article examines the current state of working styles and telework based on the "Survey on the Actual Conditions of Workers Regarding Telework," a joint project between the Toshihiro Okubo Laboratory at Keio University and the Nippon Institute for Research Advancement (NIRA).

According to the results of the survey on the actual conditions of workers, the percentage of workers nationwide who used telework was only 6% on average in January, but it rose to 10% in March and jumped to 25% in April and May when the state of emergency was declared. Although it dropped to 17% in June after the declaration was lifted, it remained about 7 percentage points higher than in March before the declaration, suggesting that telework is becoming established (Note 1).

Looking at the data by prefecture (Figure 1), the usage rates in June were highest in Tokyo at 33%, followed by Kanagawa Prefecture at 27%, Saitama Prefecture at 23%, and Chiba Prefecture at 23%, showing high usage rates in the Tokyo metropolitan area. The background to the progress of telework in central Tokyo is not only the result of the government actively calling for telework due to the high number of infected people. Corporate organization and industrial location are also considered major factors, as head office and core functions, which are primarily office-based, are concentrated in Tokyo, and service industries suitable for telework, such as information and communications, are also concentrated in Tokyo.

Furthermore, looking at the usage rate in the Tokyo metropolitan area from the perspective of commuting time (Figure 2), it can be seen that there is a significant increase in the telework rate among commuters with a one-way commute of 30 to 100 minutes. People living in the suburbs and working in the city center tend to use it. Since the pain of commuting is inherently high and the risk of infection within transportation systems is also high, the use of telework seems to be progressing significantly. Additionally, in the suburbs, living spaces are larger than in the city center, making it easier to secure space for telework, which may also be a factor. In the future, train commuting from the suburbs may decrease and be replaced to some extent by telework. Therefore, the development of telework hubs such as satellite offices in the suburbs through public-private partnerships will be an urgent task.

There are industries unsuitable for telework, and the disparities between industries are large (Figure 3). As of June, the industries with the highest usage rates were Information and Communications (50%), Information Services (45%), and Finance and Insurance (30%).

On the lower end, the rates were Transport (10%), Medical and Welfare (5%), and Eating and Drinking/Accommodations (4%). During the state of emergency in April and May, Information Services and Information and Communications rose to around 60%, and Finance and Insurance also exceeded 40%. These are industries that were originally easy to adapt to telework, and they maintained high usage rates even into June, suggesting that telework has become established to some extent. On the other hand, Eating and Drinking/Accommodations and Medical and Welfare were low in January and remained stagnant thereafter.

Of those who were teleworking as of June 2020, 77% started teleworking after February 2020.

Many people started teleworking during the COVID-19 pandemic, and these individuals seem to face various problems with telework itself. Beyond the inherent suitability of an industry, there are various obstacles and challenges in teleworking (Figure 4). The survey on the actual conditions of workers classified these obstacles and challenges into three major categories.

First are issues related to the company or organization. These include file sharing, electronic payments, digitization of documents, and information security. Second are issues related to the environment surrounding the workers. These include home environment issues, such as lacking PC equipment at home or being busy with childcare, and work environment issues, such as difficulty in grasping the results and progress of colleagues' work or difficulty in having one's own results evaluated. Third are issues related to individual abilities and awareness. These include a lack of ICT knowledge, inability to communicate sufficiently, and falling into a state of anxiety.

Figure 4 is aggregated by industry and shows the percentage of people who subjectively feel their industry is unsuitable for telework, as well as the percentage of people who fall under the three types of obstacles/problems, allowing for a comparison of high and low levels by industry for each item.

First, in the Electricity, Gas, and Water Supply industries, more people feel that almost all three types are obstacles compared to other industries. This is also high in the Finance and Insurance industries. While many people answer that their industry is relatively unsuitable in terms of subjective suitability (far left of Figure 4), the actual usage rate is relatively high, as shown in Figure 3. Although telework usage is progressing, workers feel it is not suitable. Since government regulations are strict and improving operational efficiency is difficult, these factors may be acting as obstacles. Fundamental solutions such as regulatory reform or changes to company systems may be necessary.

Next, in service industries such as Eating and Drinking/Accommodations and Medical and Welfare, many people feel that telework is unsuitable (far left of Figure 4). In fact, the telework usage rate (Figure 3) is also extremely low. On the other hand, obstacles in the three areas of company environment/systems, individual environment, and individual ability are relatively low. Even in these service industries where telework seems difficult at first glance, telework is possible for tasks such as accounting, bookkeeping, and customer information management, and there is a possibility that it will advance rapidly in the near future. Furthermore, digitalization is expected to solve challenges in the future. For example, even in the medical field, if new services can be provided through remote surgery using robots and VR (Virtual Reality) or remote diagnosis through online medical consultations, digitalization will progress rapidly.

In the Information and Communications and Research industries, many workers generally think they are suitable for telework (far left of Figure 4), and the actual usage rate is very high (Figure 3). These are the industries where telework usage has progressed the most. However, despite this, few people said they had no obstacles at all. Furthermore, the working environment is not always sufficient, and it seems that a significant number of people are experiencing some degree of problems.

Is it ultimately possible to work solely through telework? The employment situation under the state of emergency provides an answer to this question. The worker survey asked for the reasons why people had to go to the office during the state of emergency in April and May. As many as 80% of all workers performed some form of temporary workplace attendance under the state of emergency, citing reasons such as face-to-face services/on-site labor (44%), administrative processing (paper documents, payment operations, and stamping seals) (27%), meetings (20%), and external communication (15%). It seems extremely difficult to work entirely through telework. It is clear that Japanese corporate culture and systems themselves—centered on frequent meetings, massive amounts of paper documents, and the use of seals—are the biggest factors hindering telework. However, on the other hand, since this could potentially eliminate the good traditions of Japanese society that value collaboration, careful consensus-building, and harmony (wa), ingenuity such as combining it with regular office attendance will be necessary.

Despite these various problems and challenges, workers seem to be gradually changing their lifestyles and working styles through telework. The survey asked about changes in work and life due to the use of telework (multiple answers allowed). Differences in whether changes occurred were more related to company size than industry. In large companies, many people experienced changes in their lives due to telework. While workers at large companies (500 or more employees) felt problems such as a decrease in communication (36%) and a decrease in work consultation/guidance (30%), a high percentage answered with many benefits, such as being able to work in a relaxed manner (23%), it being easier to adjust work hours (17%), and having more time with family (25%). It is clear that it is contributing to an improved work-life balance. In the future, large companies are likely to increase productivity by leveraging the benefits of telework while clearing challenges one by one. However, in small and medium-sized enterprises (SMEs), even if they use telework, there is little change in work or life, and few people feel the benefits of telework. It is possible that these SMEs are not able to utilize telework effectively. It can be said that public support for the digitalization of SMEs is an urgent task.

In recent years, telework has been introduced as part of work-style reform. It is said to have many benefits, such as work-life balance, promotion of employment for women and the elderly, improvement of productivity through flexible working styles, and compatibility with childcare and nursing care. Not a few companies have reviewed their employment systems. A major challenge is how to maintain productivity while preventing the spread of infectious diseases during the COVID-19 pandemic.

The survey on the actual conditions of workers asked about the efficiency of work during telework (Figure 5). Taking the case of working normally as 100, respondents were asked to answer with a number from 0 to 200 regarding their current telework. As shown in the figure, nearly half answered less than 100, with the average being 83, and very few people gave a number larger than 100. As expected, the efficiency of telework during the COVID-19 pandemic seems to have dropped due to the various obstacles and problems mentioned above.

Furthermore, an econometric regression analysis of the data revealed several effective solutions (Note 2). It was found that an individual's familiarity, years of experience, and the number of hours worked via telework are important for increasing efficiency in telework. Furthermore, the surrounding environment also has an impact. It was found that efficiency tends to increase when the worker's job is sufficiently clarified and roles are well-distributed within the workplace, when there are systems that allow for flexible hours (flextime systems or childcare/nursing care systems), and when infrastructure such as telework hubs is established near the place of residence.

Furthermore, the survey asked about working styles after the end of the pandemic. As of June 2020, the percentage of people who responded that they would like to telework at least once a week even after the pandemic ends reached 52% overall. Conversely, the number of people who answered "I want to go to the office every day" fell below half. Looking at age groups, younger people are more likely to desire telework, with the percentage of those in their 40s and younger who want to telework at least once a week reaching 55-60% or more. On the other hand, among those in their 50s and older, those who answered that they want to go to the office every day accounted for about 60%. Many people, centered on the younger generation, hope to work while utilizing telework. Although there are problems and challenges with telework during this COVID-19 pandemic, it seems that people, especially the younger generation, desire working styles that actively utilize telework.

We also asked whether people are positive about reducing commuting and living in a preferred remote location through telework in the future. Including those who were "somewhat positive," the highest percentages by prefecture were Shiga (53%), Kanagawa (48%), Tokyo (48%), and Saitama (45%), with urban commuting zones and the Tokyo metropolitan area ranking at the top. Thinking such as correcting the over-concentration in Tokyo and migrating to rural areas is becoming stronger, centered on the Tokyo metropolitan area, and it seems that views on residence and working styles are changing. If the diversification of working styles such as rural migration, multi-habitation, and workations progresses, it could significantly change the relationship between rural and urban areas. There is also a possibility that movements such as companies downsizing offices in city centers or relocating to rural areas will become more active.

Telework has grown rapidly and is currently becoming established. However, there is suitability and unsuitability depending on the industry, and furthermore, those who suddenly started using it during the COVID-19 pandemic are proceeding with telework while facing various problems with the use of telework itself. On the other hand, working entirely through telework is difficult, and the current situation is that people are forced to go to the office due to the massive amount of paper documents requiring seals, as well as meetings and consultations unique to Japan. However, digitalization is steadily progressing, centered on large companies, and the thinking of workers regarding working styles is changing and diversifying, especially among young people and those in urban areas. The number of people who want to continue teleworking in the future is increasing among the younger generation, and interest in migrating to the suburbs will likely increase in urban areas. Beyond the improvement of work-life balance, which was a challenge in work-style reform from the beginning, people's thinking regarding their working styles and life itself is changing.

Note 1: Okubo, T (2020) “Spread of COVID-19 and Telework: Evidence from Japan”. Covid Economics 32

Note 2: Okubo, T. A, Inoue and K. Sekijima (2021) “Teleworker performance in the COVID-19 era in Japan” Asian Economic Papers, 20:02