If the lack of traffic during working hours in Dubai is anything to go by, many businesses are still operating an almost total WFH policy at the moment. Initially an enforced response to the Government lockdown, are we witnessing a deeper and voluntary shift to this approach now that rules have been relaxed, and is it viable or desirable in the long run?
On April 23rd the Dubai government lifted some of the full-lockdown restrictions, allowing residents to leave their homes without a permit and up to 30% of company employees to return to their places of work. Our informal discussions suggest that many office-based businesses are yet to take up this opportunity, with almost all employees still working from home. Many other countries are mirroring this, driving speculation that remote working may become a new normal. But this major change, if it takes hold, is unlikely to be positive for all parties over the long term.
Who's really set up for it?
Despite Dubai's glitzy international image, the reality for many workers in the Emirate is far less glamorous. Many are here to earn money for families back home and not for the lifestyle. Every dirham counts, especially for rent, which consumes a large percentage of a monthly salary. Consequently many office workers live with multiple room-mates in small apartments, which are hardly the ideal "home-office" environment from a productivity or quality of life point of view. Can businesses reasonably expect employees to sit in their bedrooms for most of the day and put out sustained high-quality work? Will they be happy for employees to work from Starbucks if their accommodation is not suitable? Equally, higher earners who are able to live in more spacious surroundings may still not have appropriate space from which to work for much of the time whilst not having a negative impact on the wider family if they have one- as many parents will currently attest!
Employers need to be careful that they are not seen to be simply outsourcing their office costs to employees and leaving them to deal with the domestic impact. Smart companies will explore these and other implications rather than simply assuming that WHF is desirable/achievable/profitable for everyone in the long term.
A commercial property slump or social distancing keeps the status quo?
From speaking to business owners and managers, it is already apparent that most see WFH as having limited downside so far, and in fact is working well for the most part. Naturally this leads them to re-evaluate the volume of office space they currently pay for and if there's an opportunity to make a significant reduction in costs. Commercial landlords must be getting increasingly nervous that WHF will unleash a deluge of lease negotiations at best and cancellations at worse.
That said, if social distancing rules and office capacity restrictions become more or less permanent could this actually put a rapid floor under the downward pressure? As businesses calculate that they will require similar space to accommodate many fewer employees this may give them food for thought.
Less commuters, less revenue...
Since it's introduction in 2007, Dubai's "SALIK" road toll system has been a major source of revenue for the government. A Khaleej Times article in 2018 estimated revenues at AED2.3B (US$625m) and growing. In parallel the Dubai metro has been carrying over 200m passengers a year generating positive income to cover ongoing costs and current investment on the new line to the Expo 2020 site. A major and fast transition to WFH will obviously have an sharp downward affect on commuter numbers. Already under huge pressure from the economic paralysis of the Covid lockdown, it is unlikely that the Dubai government will welcome a sharp decrease in returns from two of its key cash cows. It remains unclear how it can directly influence this outcome.
We think that many businesses will be tempted by the upside of reducing a major overhead and outsourcing these costs to employees. There seems to be an assumption that it can work long-term and suits all parties. Our feeling is that this assumption is misplaced, based on the points above. If the move to permanent WFH really takes root, we hope that the process will be undertaken with all stakeholders in mind and a workable new reality is the outcome for all.