People who would adopt remote working in Ireland after the pandemic may save an equivalent of 1,400 euros and almost 4 days of their life spent commuting each year. Businesses can benefit from it depending on the industry. It may cost as much as 200 million euros for public authorities as remote working can lead to a decline in tax revenue.
The Irish Government Economic and Evaluation Service (IGEES) published an evaluation of the impacts of remote working in Ireland on May 18 for the Department of Enterprise, Trade and Employment.
By evaluating the impact of remote working to the Irish economy and society, it gives details on the gains and losses from adopting a work from home policy.
Overall, management and employees expect remote working to improve productivity, although it can reduce it in some occupations.
A survey conducted by the Central Statistics Office in November 2021 suggests that 88% of people in employment who are able to work remotely would like to continue to do so at least some of the time post-pandemic. In April 2021, only 2% of people with managing responsibilities expected that employees be at least 4 days a week on site after the pandemic, according to the National University of Ireland, Galway and the Western Development Commission.
By choosing to work from home, people can save on average 1,407 euros ($1,485) a year with direct and indirect savings, the report shows. Increases in heating and electricity costs by working from home will likely by outweighed by a reduction of commuting costs.
Remote working can save employees almost 4 days of their life every year
The study expects to see an increase of 79 euros in heating costs for households every year, and 30 euros for electricity costs. On the other hand, remote workers can have a direct saving of 413 euros ($436) a year by reduced commuting.
Moreover, it would save an average of 93 hours per year as commuting times were 28 minutes per journey in 2016. It accounts for 3.9 days a year not spent commuting, or 11.7 workdays at 8 hours a day. The study calculated this time accounts for an equivalent monetary benefit of 1,103 euros ($1,164), an indirect saving that makes most of the 1,407 euros the government of Ireland communicated on.
In terms of carbon footprint, it is estimated that remote working has the potential to save 164,407 tonnes of CO2 equivalent a year, with an equivalent of monetary saving of 7.6 million euros based on a carbon price 46 euros per tonne.
Transport is the first source of greenhouse gas emissions in Ireland, and 74% of it comes from passenger car trips. It is however assumed that remote workers would not take more frequent, although shorter, trips during the day. Overall, remote working could reduce Ireland’s total CO2 emissions by 0.25%.
These estimates are based on a scenario in which 400,000 people work from home 8 hours a day for 100 days a year, or approximately 2 days a week. The number of remote workers in the country after the pandemic may be up by 90% from pre-pandemic levels. Before COVID-19, 210,000 people worked remotely, of 13% of employees of Ireland. During lockdowns in October 2020 and December 2020, as many as 670,000 people worked from home.
Remote working can save money to businesses depending on the industry. High but uncertain costs for the Exchequer
For the employers, remote working can result in significant savings in office space rent by avoiding the expensive business hubs and city center offices. Past IGEES studies suggest that a company can save 1,492 euros per employee per year, regardless of financial benefits from increased productivity or employee well-being.
However, one point that is still not clear is the costs for the Exchequer. Remote working could cost public entities 200 million euros ($211 million) a year. As people spend less and save money, the exchequer would experience a correction in tax collection, like for excise duties and VAT as employees buy less fuel to commute. Reduced income from VAT and fuel duty could amount to a loss of 111 million euros ($117m), and local authorities could see budget shrinking by 80 million euros ($84m) with lower commercial rates.
But the report highlights there are still unclear outcomes. Indeed, money saved could be transferred to other spending, for which the state would collect tax as well, and there may be societal and financial benefits of reduced stress or road accidents, for instance.
Adoption of remote working would have many consequences, like in the real estate market. In 2021, housing demand in rural region outstripped that of cities. The government also considers rural pubs may be the next start-up incubators. The report also points out it is not a winning situation for all.
Hospitality and tourism, food preparation and service and industrial engineering are not well-suited to the adoption of remote work unlike software development, arts and entertainment or media and communications.
Petrol stations, catering businesses and commercial landlords would “suffer hardest,” according to the Irish Government Economic and Evaluation Service.
Better access to labor markets to people with disabilities or caring responsibilities
With a wide adoption of remote working, people with disabilities and caring responsibilities should see improved labor market conditions with improved access to workplace or greater flexibility in time management.
It would reduce architectural and transportation barriers to labor markets of people with disabilities. But the study warns that firms should not use remote working as a way to avoid required workplace provisions for people with disabilities. But work from home will not be the one solution to the inclusivity of disable into the workplace.
For instance, disabled workers disproportionately land on blue collar or service jobs that are not always well-suited for remote working. Depending on the disability, it can also distance can be an impediment like for workers who have hearing deficiencies. Moreover, based on a U.S. study from 2020, the disability pay gap is slightly larger for remote workers than non-remote workers, which suggests that more must be done to reduce pay gaps than offering working from home frameworks to people with disabilities.
Working from home could increase female employment and financial independence. The survey from the Central Statistics Office suggests that 75% of people with home duties who are currently not in employment would consider taking up a job if it could be done remotely. In Ireland between Q4 2019 and 2021, the number of women whose principal economic status is home duties decreased by 96,200. And the country has seen record levels of female employment during that period.
However, there is still uncertainty whether work from home would be more adopted by women than men, and whether this would have consequences on visibility, promotions, salary increase opportunities and gender pay gaps.
The government of Ireland is currently working on a Right to Request Remote Working Bill in order to ensure a legal framework on remote working. It also plans to increase broadband access to rural areas.