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

Initially, telework attracted attention as a measure for work-style reform because it allows for flexibility in working hours and locations, and it has gradually become more widespread. In this context, the spread of COVID-19 in 2020 led to telework being highlighted as an effective means of preventing the spread of the infection by avoiding person-to-person contact. Balancing infection control with economic activity is difficult, and the promotion of telework has been called for in terms of work. Although commuting increased again after the state of emergency was lifted, telework has taken root and spread to some extent, and it appears that our way of working is gradually changing. This article examines the current state of work 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 worker survey, the percentage of workers nationwide who used telework was a national average of only 6% in January, but rose to 10% in March and 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 was 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 utilization 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 utilization in the Tokyo metropolitan area. The progress of telework in central Tokyo is not only the result of the high number of infected people and the government's active calls for telework. A major factor is likely the corporate organization and industrial location, such as the concentration of head office and core functions in Tokyo, which are primarily office-based, and the concentration of service industries suitable for telework, such as the information and communications industry.

Furthermore, looking at the utilization 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 about 30 to 100 minutes. People who live in the suburbs and work in the city center tend to use it. In addition to the inherent pain of commuting, the risk of infection within transportation systems is high, which seems to be driving the significant progress in telework use. Another factor may be that residential spaces in the suburbs are larger than in the city center, making it easier to secure space for telework. 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 utilization rates were Information and Communications (50%), Information Services (45%), and Finance and Insurance (30%).

On the lower end, Transport (10%), Medical and Welfare (5%), and Eating, Drinking, and Accommodations (4%) were noted. 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 utilization rates even in June, suggesting that telework has become established to some extent. On the other hand, Eating, Drinking, and 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 such 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 worker survey categorized obstacles and challenges into three main types.

First are company and organizational issues. 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 of individual ability and awareness. These include a lack of ICT knowledge, inability to communicate sufficiently, and falling into anxiety.

Figure 4 is compiled 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, showing the high and low points for each item by industry.

First, in the Electricity, Gas, and Water industries, more people feel that almost all three types are obstacles compared to other industries. This is also high in the Finance and Insurance industry. While many people subjectively answer that their industry is relatively unsuitable (far left of Figure 4), the actual utilization rate is relatively high, as shown in Figure 3. Although telework use is progressing, workers feel it is not suitable. Since government regulations are strict and it is difficult to improve operational efficiency, these 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, Drinking, and Accommodations and Medical and Welfare, many people feel that telework is unsuitable (far left of Figure 4). In fact, the telework utilization 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 accounting, finance, 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 advance rapidly.

In the Information and Communications and Research industries, many workers generally think they are suited for telework (far left of Figure 4), and the utilization rate is actually very high (Figure 3). These are the industries where telework use has progressed the most. However, despite this, few people said they had no obstacles at all. The working environment is also not 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 service and 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, large volumes of paper documents, and seal stamping—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, ingenuity will be needed, such as combining it with regular office attendance.

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 telework use (multiple answers). Differences in whether changes occurred depend more on company size than on industry. In large companies, many people experienced changes in their lives due to telework. While workers at large companies (500 or more employees) feel problems such as a decrease in communication (36%) and a decrease in work consultation and guidance (30%), a high percentage of people cited many benefits, such as being able to work in a relaxed manner (23%), ease of adjusting work hours (17%), and increased time with family (25%). It can be seen that it contributes to improving 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), there is little change in work or life even when using telework, and few people feel the benefits of telework. It is possible that these SMEs are not utilizing telework effectively. Public support for the digitalization of SMEs can be said to be 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 key challenge is how to maintain productivity while preventing the spread of infectious diseases during the COVID-19 pandemic.

The worker survey 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 an average of 83, and very few people gave a number larger than 100. As expected, the efficiency of telework during the COVID-19 pandemic seems to be declining due to the various obstacles and problems mentioned above.

Furthermore, econometric regression analysis of the data revealed several effective solutions (Note 2). It was found that for increasing efficiency in telework, the individual's familiarity and years of experience, as well as the number of hours worked via telework, are important. 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 tasks 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 in place near the place of residence.

The survey also 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 by age group, 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, especially among 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 a way of working that actively utilizes 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 high. The idea of correcting the over-concentration in Tokyo and migrating to regional areas is becoming stronger, particularly in the Tokyo metropolitan area, and views on residence and working styles seem to be changing. If the diversification of working styles such as regional migration, multi-location living, and workations progresses, it could significantly change the relationship between regional areas and cities. There is also a possibility that movements such as companies downsizing offices in city centers or relocating to regional areas will become more active.

Telework has grown rapidly and is currently becoming established. However, suitability varies by industry, and 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 large volume of paper documents, seals, meetings, and consultations unique to Japan. However, digitalization is steadily progressing, particularly in large companies, and the thinking of workers regarding their way of working 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 grow in urban areas. Beyond the improvement of work-life balance, which was a challenge in the original work-style reform, people's thinking about work 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