Much has been written about home working. Most articles give tips and tricks – but managers need to understand the issues and risks and how working from home can be made to work for the firm.

So, what is home working? It’s where the firm extends its business activities from its premises to an employee’s home. A small part of the employee’s home is taken over by the firm for its benefit.

Hold onto that thought as you read about how this affects the homeworking scenario.

Efficiency

Home working is nothing new. In the 19th century, most people were home workers. By today’s standards, production was about as inefficient as it could be!

In search of efficiency, workers were then employed in factories and offices. And even with our recent shift in the UK to a service economy, workers still predominantly gather together to work.

Working together ensures short lines of communication between workers. Those short lines assure efficiency. That efficiency secures low costs. Low cost gives the low-priced goods and services enjoyed by all.

Home working challenges this trend. However, with computer-mediated communications using the Internet for connectivity and the Cloud for storage, communication lines in many industries are once again the shortest possible.

This new work regime is termed the Fourth Industrial Revolution. And home working has a clear place in it.

Maturity and Competence

One of the pre-requestites of effective homeworking is that the employees are competent in their job. That does not mean that they are expert or even practitioners in every job responsibility. They can be supervised practitioners or even trainees in some aspects. That's normal. But they must have the competencies needed to be able to chart out their day and get on and do the work. Psychologists would call what's needed, 'taking agency' or responsibility. They must be able to get work 'over the line' and out the door, metaphorically.

This also requires a basic maturity. As a result, it's likely that an apprentice, for example, may find home working challenging and need more guidance than others. Other employees who need more discussion when doing work may also need time and guidance to adjust.

Control

Most managers would ordinarily refuse an employee's request to work from home. Whatever the reason actually given, it’s really because the employee can’t be seen doing the work. Managers often want to see a bum on a seat. Then and only then, will they believe that due effort is being applied. Whilst managers typically view home working with suspicion, most studies suggest that employees work for longer and are more effective when home working.

But what matters is that the employee produces the results needed. It’s not about being there. It’s about performing and realising outcomes.

It will likely take little to modify the firm’s systems to transform KPIs around observed effort into outcomes. It’s more a psychological problem for managers. Any whole scale shift to home working will depend on managers making the cultural shift to measure outcomes and cease to worry about presence.

Employment Contracts

There’s an important clause in the employment contract that defines where, ordinarily, the employee will work. Many subsequent employment decisions hinge on that statement.

If an employee ordinarily works from home, and they move from there in the course of their work, even just to travel to the firm’s premises for a meeting, the firm will need to reimburse them for the journey.

Managers will need to review employment contracts of those going to work from home and negotiate and agree changes. Temporary or permanent changes to existing contracts to facilitate home working are easily done with a letter defining the days, hours and location(s). But care is needed to allow future flexibility. Not all home working arrangements work and the employment contract may need to be changed back or to another arrangement.

Home working normally means just that – working the normal day but at home. But homeworking can also be used as a means of allowing flexible working, such as part-time hours, term-time only and flexible hours.

Leadership

Leaders persuade followers toward their point of view. Leadership is essential to business. For effective leadership, the leader and the follower must be close. But, physical closeness is often not essential – what matters is that the dyad, manager and employee, communicate and understand one another.

Leadership is possible under home working. It just takes more effort on the manager’s part to communicate effectively.

Collaboration

Many gurus talk of teamwork. In fact, what’s needed is collaboration between colleagues. Collaboration demands that trust between workers is built and sustained.

Trust is built from exchange. If I need you to do something, and you do it, I learn that you can be trusted to perform for me. If I tell you something confidential and you don’t tell anyone, I learn that I can trust you to keep confidences.

Employees collaborate. They negotiate deals between them hour by hour – “I’ll do that for you, but at a later date I’ll need you to do this for me”. If those deals work, trust builds. But for those deals and the ensuing trust, it does not matter where in the world the two parties are so long as they can adequately communicate.

Home working can support collaboration. But managers will need to be sensitive to issues and act to ensure that collaboration is working. It’s easy for relationships to take a nose dive when folk are remote from one another.

Property

One of the huge benefits of home working is the reduced cost for the firm – the costs associated with providing a worker with the necessary space and facilities disappear off the expenses section on the P&L.

But beware! Those costs are simply shifted to the employee.

Most firms would want home workers to have a dedicated area in which they would work. And not the kitchen table. It’s essential that there’s adequate separation between family and business lives. Confusion and chaos between environments do not help efficiency and security.

If the employee provides anything like the same area as they would have in the firm’s premises, the employee pays – they need a bigger house, more mortgage, higher rates and more power for heating, lighting and for accommodating the firm’s systems at home. And they need access to a kitchen and toilet. And they’ll need dedicated furniture.

In return, of course, they don’t have commuting costs, and maybe have lower costs for clothes and meals. And they will likely have flat rate internet connection and telephone billing and so incur no incremental cost there.

So, both parties, firm and employee, benefit financially, though usually the firm benefits more. Managers will, therefore, need to determine if the firm should make some contribution. Some payments are allowable without incurring tax liability.

Permissions

Now, it’s not just about agreeing that the employee will go home and work.

Most title deeds to houses forbid that any owner or occupier carries on a business from the dwelling. It’s for living in, not working in. This means that by asking an employee to work from home, the firm is complicit in the employee breaching a covenant.

Generally, the reason for the covenant is to prevent vehicles visiting the dwelling, making noise and generally interfering with the neighbours’ right of quiet enjoyment of their own homes.

Typically, home owners who work from home simply ignore such covenants and assume that no-one is ever going to take them to task, let alone court.

And most workers under the age of 50 have a mortgage. The mortgagor will generally forbid them, as mortgagee, from carrying out a business from the property. Here, the reason is so that the value of the property is not reduced by the business activity. The same of course applies to anyone renting, with the landlord taking action if home working is discovered.

Typically, the mortgage agreement will allow the mortgagee to ask permission. There may be less flexibility in rental agreements.

Insurers will also define the use to which the property is put - and hence homeworkers may invalidate their house insurance unless home working is declared. This is partcularly relevant if clients or customers will visit the home. Generally, any change changes the insurer's risk and needs to be discussed.

And finally, zones within towns are classified for one use or other - light industrial or residential for example. It's extremely unusual for a zone to have dual use. If indeed a person is working from home - and, hence their property is in dual use, they would be due to pay both Business Rates and Council Tax.

Practically, it's likely that a home office would only attract business rates if it did not return to domestic use at the end of the day. A spare room doubling as bedroom and office would likely not be separately rateable. A converted garage with suspended ceilings, separate door and custom desking would likely be rateable because its purpose is fixed and obvious. There's more on this on the Valuation Office Agency site on GOV.UK at https://www.gov.uk/run-business-from-home.

Of course, many people would retort, “But I’m not conducting a business, I’m just working for my employer”. Either way, a business activity is being conducted and permissions should be sought where possible – and if not possible, at least the risk of some action (by a neighbour, for example) should be considered.

For these various reasons, most people working from home do so illegally - and simply keep quiet, keeping 'under the radar', hoping no-one will notice.

Information Security

Most information today is electronic, though firms will also need to consider information security for paper where they print documents.

Typically, a firm controls its information in its premises using various electronic systems. Those systems usually cover the premises only. In information security terms, anything outwith the premises is then considered to be in ‘wild country’ and is unprotected. The boundary of system control is often defined in firms’ external information security accreditations.

Where firms enter contracts with their clients that require information security certification, using home workers may be a breach of contract. Firms may have to negotiate such a change with clients.

Often the firm then puts in place manual systems to control the heightened risk of releasing information into the wild. One example might be to mandate that all laptops are to be locked in safes if employees every have to leave them unattended. Another example might be that all files are to be manually password protected if sent between wild country and the security of the firm’s systems.

Such mitigation is simple when applied to employees who travel and maybe to the odd home worker. But orienting the firm’s systems to accommodate whole scale home working will need careful planning and the purchase of additional protection, unique to the firm’s information assets and the new threats faced.

For many businesses though, it might just be a case of buying each home worker a fire safe.

Quality Management

Many firms embrace quality assurance, even if they don’t actually get their operational systems certified by external agencies.

Any quality management system has a system boundary, and generally, quality systems describe the activities going on in the firm’s premises. In essence quality is assured within the system, but things can go to rats outside. The situation is similar to that in information security, though not quite as emotive. It’s only quality, after all.

Systems theory also tells us that ‘errors collect at boundaries’. Making artificial boundaries in the firm, such as that between the main place of work and the home worker, creates sources of such error. Firms should manage their quality assurance across all system elements, including home workers.

Audit is a key quality assurance tool. Audit may need to be extended to cover the home worker and their environment.

Wellbeing

There are lots of wellbeing issues in home working – both physiological and psychological.

The biggest physiological wellbeing issue is where and how the employee works and how this degrades their posture and other anthropometrics.

Most home workers make use of a laptop computer. A workplace assessment should be done to ensure that the work station encompassing this laptop is optimal. Additional screens should be used in an elevated position on a desk, rather than allowing the now-customary vision of an employee staring at a laptop on their knee. And an adjustable ergonomic chair should be supplied, just as if the employee was in the firm’s premises.

The biggest psychological wellbeing issue is associated with the reduced human contact in home working. Many people need human contact. If they don’t get that, they’ll get anxious and depressed. Managers should be aware of such issues and be open to discussion and change in operating practices to reduce such maladies.

Physical Risk

Risk is the chance that something untoward will occur. The reference against which all others are compared is typically the home environment, so it’s unlikely that anyone working from home will be putting themselves under heightened risk.

However, managers will need to consider that in effect what’s happening is that the firm has taken over a portion of the employee’s home. Risk assessments should be done, even though the outcome is unlikely to suggest extra risk. The employer must discharge its employer’s liability. This is easily done – the manager should visit every home worker at home and discuss how they are going to make the arrangement work. Visits should be made at least annually. The employer still has a duty of care to the employee, even if they are working from home.

Firms will take out insurance to cover their unmitigated risks. This insurance should be extended to cover the home working environment. Risks, however small, should be controlled, wherever the employee works.

Sometimes, elements of employer’s risk can be borne by the employee, and covered in their house insurance. It’s for the employer to insist that the employee gets confirmation from their insurer that they can work from home and that their insurer will cover damage caused by work equipment and any claim from a third party. The employer will need to decide if they fund any additional cost to the employee’s premium.

Meetings

Conducting meetings for homeworkers and for a mix of office and home workers is a big issue. As the Conronavirus pandemic and the prolific use of Zoom during lockdown taught us, it's easy to connect together badly. It's difficult to conduct online meetings well, and it takes practice.

We've written some guidelines here: https://www.linkedin.com/pulse/some-guidelines-online-meetings-john-berry/

Summary

Home working is where the firm extends its business activities from its premises to an employee’s home. A small part of the employee’s home is taken over by the firm for its benefit and the employer must acknowledge this.

That simple paragraph needs careful consideration, case by case, home worker by home worker, to ensure that the scenario is lawful, controlled and beneficial to both parties. It’s not just a case of saying, “Off you go.”

Overall, we’d recommend a mixed regime – by all means implement home working, but make sure there’s adequate face to face time. Both managers and employees, and groups of employees as colleagues, must meet frequently to support the remote relationships.

Home working is nothing new. It’s just moved from being something enjoyed by a few to something that an army of future workers will embrace.