How to Build Happier Workplaces After the COVID Era

Well-being science offers insights into how we can improve workplace policies.

Posted Jan 26, 2021

The effects of the COVID-19 pandemic on employment and — for those lucky enough to have kept their jobs — on changes in the workplace, have substantially influenced well-being. An analysis of these channels through the lens of well-being science offers insight into how we can shape policies to build back better. 

In terms of employment, it is significant to note just how important work is for well-being. Generally, we have found that there is a difference of about 20% in self-reported well-being between those working versus those not working, and that unemployment leaves scars for a very long time. In fact, few aspects of life, if any, have as much of an impact on well-being as being made redundant. Given the number of job losses as a result of the pandemic then, a large portion of the well-being impact of COVID-19 can clearly be attributed to changes in employment.  

Mikhail Nilov/Pexels
Source: Mikhail Nilov/Pexels

Of course, the impact on unemployment is not homogeneous: for instance, people in low-paid or temporary jobs are twice as likely to be made redundant; gig-workers and freelancers have been among the hardest hit by the pandemic. This also means that both the economic and well-being impact has disproportionately hit young and minority communities. Considering the closure of retail and hospitality industries in March, both of which employed many young people, we can see the impact of COVID-19 on young people’s jobs in the UK — while other age groups remained relatively steady, the number of unemployed people aged 16 to 24 increased drastically compared to last year.

Adding to that toxic mix, the pandemic has made it more difficult to find or re-gain employment at the moment, which is a cause of additional anxiety. A little-known but staggering fact is that the number of job postings in the UK fell by close to 70% at the start of the pandemic, and numbers have hardly picked up since then – the latest number of job adverts, from October 2020, are still 50% lower than compared to the same time last year.

Well-being science offers an additional important insight here: the drop in well-being from being made redundant is a result of much more than a loss in income. Beyond the paycheck, a job provides individuals with a social identity, a social network, and a routine, all of which are lost when one loses a job. Notably, the psychological impact of being made redundant is also compounded by the loaded linguistic connotations of the word and so — similar to the advised use of "physical distancing" over "social distancing" to overcome implications of loneliness — I advise against using the word redundancy for obvious reasons and observe that other languages use less psychologically harmful words to describe the process of making people redundant. 

In terms of immediate policy implications, designing a job retention plan would therefore be preferred over an income replacement scheme to deal with the economic fallout. The UK Treasury did very well on this front, setting up a generous furlough scheme keeping people "in employment." This is a stark contrast to the American approach of sending checks to the people who lost their jobs, an approach that completely ignores the non-pecuniary aspects of the role that work plays for well-being.

With reference to the UK furlough scheme, I use my words carefully: keeping people "in employment" is not the same as having kept them "at work." The inflexibility of the original furlough scheme forced employers to make the binary choice of either keeping people fully at work or putting them fully on furlough. A lot of people were put on paid leave, when instead they could have been kept at work for a few days a week and thus maintained social connections and a routine during the lockdown months. Such flexibility may have been better for productivity, well-being, and may even have cost the Treasury less.

The "Kurzarbeit," the well-established flexible furlough scheme in Germany, serves as an exemplary model and has played an important role in preserving jobs in Germany. Thus, if a flexible furlough scheme were to become a more permanent feature of the British policy toolbox, to be used if and when companies were faced with exogenous shocks, well-being would improve moving forward.

Besides the impact it has had on employment figures, the COVID-19 epidemic has also impacted well-being by way of its effect on how the workplace has changed — the most salient aspect here being having to work from home. According to the ONS, prior to the pandemic, 5% of people’s main location of work was home, while in April almost half the workforce in the U.K. was working from home and even now, a third of the workforce continues to work from home. This shift has exacerbated certain existing inequalities as well as produced some new ones. Workers who do not have the option of working from home tend to be in lesser-paid positions and industries like retail, manufacturing, health and social care and so the work-from-home approach has broadly led to exacerbating inequalities between white-collar and blue-collar type of work.

We have also seen, in a study conducted by the Department of Sociology at Oxford, that working from home during the lockdown has disproportionately impacted women who have ended up spending more hours on childcare and home-schooling in addition to their jobs, leading to a more dramatic decline in their well-being during the COVID-19 pandemic.

In terms of productivity and well-being, an assessment by Andy Haldane can guide us: the impact of a shift away from the office on both productivity and well-being has been mixed. For productivity, it seems that in order to maintain output, people spend more hours working — estimated by measuring the time difference between the first and last email sent — so productivity as a whole has not seen an improvement in this new way of work.

For well-being, complexly, short and longer term dynamics work in opposition. Obvious immediate benefits for well-being result from small concerns like eliminating the commute on one hand, to larger factors like an improvement in worker-autonomy and work-life balance on the other. Over time, however, there is a real risk that working from home can undermine the social and intellectual capital that sparks creativity. In this context, social and intellectual capital can be visualised as stocks that are slowly being depleted as they are not being sourced with new in-flows of people, places, and ideas. Building meaningful relationships with existing and new social connections is an especially critical piece of job and life satisfaction as we found in earlier work, and working from home all the time does not allow for that to the same extent as the office did. 

This well-being analysis leads to an obvious policy conclusion: for those that can work from home, a hybrid model that allows flexibility is ideal. Choosing a few days a week to work from home for tasks best suited to do so, while choosing to work from the office or being on the road for a few days in order to build social and intellectual capital can give the best of both worlds.

While the impact of COVID-19 on well-being as seen through the channel of employment is unambiguously negative as it concerns job losses, the impact on well-being as seen through changes in the workplace is mixed — but well-being science does offer clear policy recommendations on both fronts on how to build back better — and happier — following the pandemic.