Rishi Sunak might want people back in the office – but it isn’t within his power to force them there

The push to get people back to the office has begun in earnest.

Rishi Sunak has come out again urging people to do so, stressing how important it is for career development for the young. He said he would not have made strong relationships in his first job had he been working from home. But while you can see why the chancellor should seek to urge people to do so, since the disruption to the economy has been massive, this is not within the power of politicians to determine.

They can use the power of the law to stop people going to the office, just as they can shut down air travel. But they can’t force people to work in a way they don’t want to. Economics will determine what happens, not politics.

So what do we know about the economics? First, what do workers want? Or rather – what do the quite privileged group of people doing jobs that can be done remotely want? Because let’s remember that for most of the workforce, this is not an option.

There is a lot of stuff around suggesting working from home brings benefits. For example, last autumn a survey by the internet provider TalkTalk suggested that more than half of workers believed they were more productive when working from home. There was also a YouGov survey that said fewer than four in 10 people wanted to work away from home full-time once the pandemic was over. The rest chose either part-time or full-time from home.

But that was last year, when there was still a novelty factor. Even if employers wanted to get people back they were not allowed to do so unless it was absolutely necessary. Now that offices can reopen, the balance is more nuanced. In the US, while the vast majority of people still say they would like to work from home at least part-time, most of the jobs advertised on job-hiring platforms do not offer the option.

On the other hand, the employers that do offer it find they are at an advantage in the hiring market. The US job market (and indeed the UK one) feel very tight at the moment, so the economics may push companies to offer working from home to attract the people they need to hire.

There is, however, a point that companies are starting to spot: what works in the short run may not work in the long. The problem is that having people together in a workplace builds social capital – the shared knowledge of their employees. Companies rely on that capital just as they rely on financial and physical capital. Paul Johnson, director of the Institute for Fiscal Studies (IFS) spotted this. He writes: “While a hybrid system may work well, the wider economic evidence we have suggests that entirely home working is, in most circumstances, less productive than office working.”

At IFS they had fared better than they feared, but it won’t necessarily last. He explains: “That is partly because we have been living off accumulated social capital. The senior team has been stable and we know each other well. Staff turnover has been relatively modest. Most still know each other and the culture of the organisation. Bit by bit, month by month, though, that accumulated capital is depreciating.”

This is surely right. It is very hard to measure social capital. Most companies don’t even try. They can measure staff turnover, for that is a clear number, and try hard to hold that down because it imposes costs on them. They can measure the human capital of their employees, though that is tougher to do in any meaningful way. But wise employers know it has to be nurtured, and wise employees value their own contribution to the social capital pot.

There is something else, something valued perhaps most by the young: meeting new people. In the US, the workplace is the second most likely way of meeting your significant other, with one study putting it at 15 per cent, behind meeting someone through friends (39 per cent) and ahead of bars and other public places (12 per cent). In the UK, a YouGov survey last year found that the workplace is equal number one with friends, both with 18 per cent, and ahead of “while out and about” at 15 per cent. Online scored low in both countries.

This is not something that employers could use as a tool to try to attract staff or get them back into the office. But meeting people you like is part of the building of social capital – and we all need that in these bumpy times.