Thanks to the coronavirus outbreak, working from home is no longer a privilege, it’s a necessity.
As Bloomberg reports, “While factories, shops, hotels and restaurants are warning about plunging foot traffic that is transforming city centers into ghost towns, behind the closed doors of apartments and suburban homes, thousands of businesses are trying to figure out how to stay operational in a virtual world.”
“It’s a good opportunity for us to test working from home at scale,” said Alvin Foo, managing director of Reprise Digital, a Shanghai ad agency with 400 people that’s part of Interpublic Group. “Obviously, not easy for a creative ad agency that brainstorms a lot in person.” It’s going to mean a lot of video chats and phone calls, he said”
The number of people working from home is growing “into armies”. Many people in China are still on holidays for the Lunar New Year.
With Chinese companies beginning to restart operations, it will likely result in the world’s largest work-from-home experiment.
More people will be trying to organise client and team meetings via video conferencing, chat and other software platforms.
“The vanguards for the new model of scattered employees are the Chinese financial centers of Hong Kong and Shanghai, cities with central business districts that rely on hundreds of thousands of office workers in finance, logistics, insurance, law and other white-collar jobs.”
“One Hong Kong banker said he’s going to extend an overseas vacation, as he can work from anywhere with a laptop and a phone. Others say they are using the time typically spent wining and dining clients to clear their backlog of travel expenses. One said he’s shifted focus to deals in Southeast Asia.”
“No one is taking meetings, my schedule is pretty empty,” said Jeffrey Broer, a venture adviser in Hong Kong. “One person emailed me: ‘Shall we meet somewhere in February?’”
Concerns for employees
The rapidly changing impact of the virus is prompting daily changes in corporate directives.
“Tiko Mamuchashvili, a senior event planner at the Hyatt hotel in Beijing who was supposed to return to work on Friday, was initially told her vacation would be extended until Feb. 3. Then she received a notification to work from home for two additional days. A few days later, the directive was extended until Feb. 10. She has to notify her department each morning about her whereabouts and report whether she is running a temperature.”
“Usually going back to work from holidays feels a little weird, but working from home this time with such short notice feels even more unusual,” she said. With hotel event cancellations rolling in on a daily basis, “basically, all I can do is answer emails,” she said.
In another report, the coronavirus is infecting the global economy, “An interconnected global economy is feeling the strain of China’s viral outbreak — and the potential $160 billion hit in lost growth that may be on the way.”
Some managers fear empty offices will decrease productivity. But the opposite may be true.
“A 2015 study from Stanford University in California found that productivity among call-center employees at Chinese travel agency Ctrip went up by 13% when they worked from home due to fewer breaks and more comfortable work environments.”
The virus may test this theory on a wider scale.
Impact on shared workspaces
Shared workspaces increase in large Chinese cities with huge increases in property rent and tech startups.
One director of a shared workspace stated times are tough, as it is almost impossible for him and others to work from home, as they rely on customers working in close quarters.
“The core of workspace is community, people coming together. It’s difficult to replace that interaction and connection online,” he said.
“For many companies, instructing office workers to stay home only solves part of the problem. Many rely on factories, logistics companies and retail outlets that face their own disruptions.
For phone-case maker Casetify, 2020 was supposed to be the best year yet. Headcount at the Hong Kong-based company had surpassed 150 by the end of December, and it was aiming to double sales this year.”
The spread of the virus from Wuhan caused factories in China to shut. New outlets are shut, negatively impacting sales.
“Casetify has 30 days of extra stock, but Ng says there’s no plan B if the factories don’t reopen soon, a plight shared by thousands of other businesses in China and around the world.
Even for those who can do business by internet and phone, the virus means there may not be much business to do.”
Business on hold
Bankers say deals are on hold. Transactions in January were half what they were the year before (Bloomberg).
“The worst is yet to come,” said Nomura analyst Ting Lu in a research note. “We reckon the coronavirus could deal a more severe blow to China’s economy in the near term, relative to SARS in 2003.”
Statistics suggest the new coronavirus isn’t as lethal as SARS, but it has infected many more people, and its rapid transference rate is spreading fear.
“A big part of the expected blow to the economy during the current outbreak is likely to come from changes in “human psychology,” according to Warwick McKibbon, professor of economics at the Australian National University in Canberra.”
“He said SARS cost the global economy $40 billion and predicts the hit from coronavirus will reach three or four times that amount. “Panic is what seems to be the biggest drain on the economy, rather than deaths,” he said.”
With many factories, businesses and outlets closed, and with workers staying home, many Chinese service industries are suffering.
“The sector is much bigger than it was during the SARS outbreak, accounting for 53% of the economy, up from 41% in 2002. But without customers, many businesses are in limbo.”
Some businesses have turned to the internet to keep customers loyal, hoping to weather the epidemic.
Not working out
“Shanghai gym owner Fenix Chen had intended to close his gym Hi Funny for three days for the Spring festival. He delayed reopening until Feb. 10, in line with the city’s recommendation.”
“Most people in Shanghai are basically staying at home, avoiding public places,” he said. “The fear from the virus outbreak will have a lasting impact on our business.”
“So Chen is encouraging clients to exercise at home and posting instructional videos online. “If they do continue this habit, that’s also important for our business after the virus blows over,” he said.”
Source
Coronavirus forces world’s largest work-from-home experiment
Bloomberg
The Coronavirus Is Infecting the Global Economy. Here’s How.
Bloomberg