Jacob Rees-Mogg’s back-to-work comments prove he has a lot to learn

Simply attacking people for not wanting to got back to the office, as Rees-Mogg has done, is stupid, writes Hamish McRae

This is a very tight labour market on both sides of the Atlantic – the tightest for a generation (Getty Images)

Enjoy working from home? Or feeling a sense of relief to be working with colleagues again?  The world is on a learning curve about the extent to which people can efficiently work remotely, and we are perhaps a quarter of the way up it.

So when a government minister says that civil servants should go back to the office, the immediate reaction of most people will be one of irritation: what do politicians know about effective working? Since the minister in this instance is Jacob Rees-Mogg, who deliberately cultivates an antiquated demeanour, the irritation becomes fury. If you spend your life relying on other people to do stuff for you, of course you need them to be around. The rest of us have to type our own emails.

Actually, the path back to the office is more interesting than Rees-Mogg would suggest. There are efficiencies from home-working and there are inefficiencies. The world’s business, financial and academic communities are gradually learning how to build on the pluses and minimise the minuses.

The overall drive does indeed seem to be to get as many people back into the office as possible. But there are exceptions. Thus, Apple Inc, the company that has created so much of the kit that makes remote working possible, wanted everyone back last week, though I haven’t yet seen a good readout as to how well this is being received by the workforce.

Of course, it is not just a question of telling people you want them back in the office. It is also a matter of building the appropriate environments, so that they want to come in. Earlier this year, Google spent $1bn (£762.5m) on buying the space it was renting in Holborn in London, so that it can upgrade the space. It has also just confirmed that it will spend $9.5bn (£6.4bn) on US data centres and offices this year.

If the tech giants insist that their people come into the office, does this mean that other industries will too? Here the picture is more confused. The famous Pret Index, which is compiled with Bloomberg and tracks the sales every week at Pret a Manger sandwich outlets in London, New York, Paris and Hong Kong, suggests widely different return-to-office patterns.

Its latest numbers show that while sales in London’s West End are pretty much back to pre-pandemic levels, they are still somewhat down in the City. Paris is running at about 90 per cent of the pre-pandemic level, New York around 60 per cent, and Hong Kong only 30 per cent. Things have not yet settled down by any means.

There are three further complicating issues. One is the need to make jobs attractive. Workforces are not static. Average job tenure in the US is around four years, so up to half the people coming back to any particular office now are not the same ones who left when the pandemic struck two years ago. And anecdotal evidence seems to be that to lure people into new jobs, potential employers have to offer the opportunity of working remotely at least part of the time.

This is a very tight labour market on both sides of the Atlantic – the tightest for a generation – so power has shifted towards the workers in a way that few managers will have ever experienced. You can always entice people to come and work for you by paying more, but this assumes you can afford it. Maybe companies can hire talent both more cheaply and from a wider geographic area by offering greater freedom to work from home.

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A second is the impact on productivity. When the lockdowns happened, output per person in the UK shot up – or at least seemed to shoot up, for that is what the official figures showed. It then fell back a bit, but now seems to have settled down and productivity is currently 2.2 per cent higher than on pre-pandemic levels.

Many people think they are more productive, and a study last year by LSE suggested that being able to work from home improved both productivity and a sense of wellbeing. But it is difficult to find hard evidence to support this. If it were really so, why would Apple want to get its people back?

That leads to a third issue. What works in the short run may not work in the long. The most interesting perception on this that I have come across is from Paul Johnson, director of the Institute for Fiscal Studies. He pointed out that working remotely gradually ran down the social capital of the organisation. “We and most other office-based organisations can continue to work from home,” he wrote, “… but month by month, almost imperceptibly, the costs mount.”

One particular problem was training new staff, which leads to a further twist. Working remotely may be fine for older people in established positions, but not for younger employees who need to build up contacts and relationships.

Where does this leave us? I think the answer is that there are potentially huge gains to be made both in efficiency and quality of output from applying the lessons learnt in the pandemic. Simply attacking people for not wanting to go back to the office, as Jacob Rees-Mogg has done, is stupid. But building social capital in any enterprise is vital, and that means people working together much of the time. We all have a lot to learn, and that includes politicians too.