An Evaluation of the Impacts of Remote Working - DETE 2022

Please find attached below An Evaluation of the Impacts of Remote Working undertaken by the Department of Enterprise, Trade and Employment in May 2022. 

The document evaluates the impacts of remote working to the Irish economy and society, building on the goals set out in the National Remote Work Strategy. Mixed analytical methods are used, including Cost-Benefit Analysis for impacts that are easily quantifiable, and the analysis of trends and descriptive statistics for less quantifiable metrics. (Harry Williamson – Labour Market and Skills Unit)

The main findings are:

  • Overall, the evaluation finds that remote working is likely to have a positive impact on the Irish economy and society.
  • The evaluation finds strong evidence that both businesses and employees have post- pandemic plans to increase the levels of remote working compared to pre-pandemic levels.
  • The paper examines the impact remote work is likely to have on employees’ productivity. While theoretical evidence is mixed, survey data indicates that, on average, management and employees alike expect remote working to improve productivity.
  • It is likely to be the case that remote working boosts productivity in many occupations but reduces it in others. Because of this, individual firms and workers must make decisions as to whether they believe they are more productive working remotely.
  • Evidence suggests that remote working should improve labour market outcomes for both people with disabilities and caring responsibilities. Remote work enables improved access to the workplace through greater flexibility in terms of time management, childcare and commuting options. It is important however that firms do not use remote working to avoid providing required workplace provisions for people with disabilities.
  • Section 3.3 of this report assesses the impact that remote working will have on regional development and on the environment. The evaluation found evidence to suggest that housing demand in more rural regions outstripped that of cities, at least in 2021. The evaluation found there to be an inverse relationship between recent house price and rent growth, and population density.
  • Emissions savings made from reduced transport usage are likely to exceed any extra household emissions, leading to net environmental gains from remote working. This paper estimates that remote working has the potential to save 164,407 tonnes of CO2 a year, with an equivalent monetary saving of €7.6m. These potential benefits depend on a variety of factors, however, and the analysis assumed that there would be no secondary environmental effects such as remote workers taking more frequent, shorter trips during the day.
  • The final impact assessed is remote work’s effect on public and private finances. The evaluation finds that potential cost savings for employees could be large, with any increases in heating and electricity costs likely to be outweighed by a reduction in commuting costs.
  • Estimated annual increases in heating and electricity costs for households are €79 and €30 respectively. Potential savings from reduced commuting are estimated to be €413 per remote worker. Remote workers can save an average of 93 hours per year through reduced commuting – with an equivalent monetary benefit of €1,103.
  • Firms too can make significant cost savings if they downscale expensive city centre offices. Past IGEES studies indicate potential benefits for firms to be approximately €1,492 per 2
  • employee per year. This is on top of benefits accrued through improved employee productivity.
  • It is still unknown at this time what the impact of remote working will be on the Exchequer. There are potential costs of €200m per year, although the majority of this is likely to come through a reduction in ‘corrective’ tax receipts, such as excise duties. It has not been possible to estimate all of the potential benefits or costs to the Exchequer.
  • As for most remote workers and firms, benefits of remote working are likely to outweigh the costs; there is likely to be little market failure for the government to correct. While blanket spend to encourage remote working could lead to deadweight loss, targeted spending measures could improve remote working outcomes for specific cohorts (e.g., people with disabilities).
  • It is advised that the impacts of remote working are monitored on an ongoing basis as more data and empirical evidence comes to light.