Post-Covid home working has failed to level up UK economy, study finds

The Guardian

15-05-2025

The post-pandemic shift to greater home working among highly skilled professionals has failed to level up Britain's economy and help struggling regions as many had predicted it would, according to academic research.
Hybrid working – where workers split their time between the workplace and another remote location such as home – has surged since the height of the Covid pandemic, yet is mostly available to older, high-skilled professionals based in London and other major cities.
The researchers found that just over half (52%) of all UK workers never work from home, but this falls to less than a third (29%) of highly skilled workers.
The prevalence of hybrid roles over those that are fully remote means most staff who can work from home are still tied to a city centre workplace. This has dashed hopes that the post-Covid world of work would prompt professionals to move and thereby spread talent around the country, according to a report from academics at the universities of St Andrews and Southampton and others.
'There has been no mass relocation of highly skilled workers to cheaper places as we might have hoped at the start of the pandemic,' said Dr David McCollum, one of the report's co-authors and a senior geography lecturer at St Andrews.
'People are still opting to live in places that offer the best wages and the best opportunities for their profession. If they are relocating, they are not moving that far away as they still have to go to their place of work on a weekly basis, usually a few days a week.'
When highly skilled workers move house, the main reason tends to be a need for more space rather than it being determined by their job, the researchers found.
The report, which was funded by the Ministry of Housing, Communities and Local Government and the Economic and Social Research Council, urged policymakers to take action to prevent home working from deepening regional divides, as local challenges such as skill shortages, economic inactivity and low-quality jobs cannot be solved just by attracting the most-skilled workers.
'If high earners relocate, that can push up house prices, which can exacerbate inequalities at a local scale,' McCollum said.
At a time when the Labour government is aiming to have 50% of all senior civil servants based outside London within five years, the report's authors have called on ministers to consider incentivising firms to establish remote or hybrid work hubs in the UK's second-tier cities, as well as investing in co-working and business support spaces outside the capital to help redistribute economic activity.
Employees who are able to work from home value hybrid working the same as an 8% pay rise, according to Nicholas Bloom, a Stanford economics professor who has studied home working for two decades.
'If you think of somebody that is working 45 or 50 hours a week in an office, they've got a 45-minute additional commute. If they get to work from home two, three days a week, they're saving about 8% of their total time,' Bloom told a House of Lords committee, set up to investigate how the rise of remote and hybrid working has affected employers, employees and the wider British economy.
'I would say hybrid helps retention and recruitment and, if it's well organised, is about net zero on productivity,' Bloom told peers on Tuesday.
Earlier in May the world's biggest asset management company, BlackRock, became the latest company to call time on an era of remote working by ordering its senior managers back to the office full-time, in a change from its previous four-day-a-week policy.
The New York-based company, which employs more than 21,000 people globally, is one of a handful of companies to have followed the Amazon by reinstating pre-pandemic ways of working.
Bloom said he believed companies issuing full return-to-office mandates hoped this would make staff leave, thereby helping them reduce their headcount.
'That fifth day in particular, it just annoys people. To force them in on Friday doesn't seem to improve productivity,' he said.