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COVID-19 and the resulting lockdowns and work-from-home orders have forced businesses and employees to rethink existing working modes. Advances in information and communications technologies have allowed many knowledge workers to switch to home-based teleworking overnight, especially in the developed world. In Europe, the percentage of teleworkers increased from . Although many countries are now vaccinating against COVID-19, . As such, teleworking for many middle- and high-skilled workers will likely persist as part of the future's .

In many ways, increased teleworking because of COVID-19 has made the working conditions of knowledge workers (those predominantly working at a computer) similar to those of the self-employed. A better understanding of how the traditional self-employed—business owners with or without other employees—organise their work and harness the benefits of autonomy and flexibility while managing their job demands can offer insights to policymakers, employers and employees on the changing work domain more generally and the labour market consequences of COVID-19 more specifically.

The self-employed have levels than salaried employees, , such as age, gender, working hours and salary (Figure 1). The self-employed in the European Union are about 4 percentage points more satisfied with their overall working conditions than employees. However, the pattern is not uniform, and in several countries, there is no job satisfaction difference between the two groups.

Of course, the self-employed and salaried workers might differ in their characteristics, such as motivation, ability or entrepreneurial aptitude. But even when these factors are taken into account, leads to significant short-run gains in job satisfaction (Figure 2), which may persist .

Yet, having your own business brings many challenges. The self-employed have non-standard career paths, conflicting job demands, work longer hours. They also face time pressure, uncertainty, role ambiguity, and loneliness, which can lead to .  How do they have this job satisfaction advantage then and what might it imply for teleworkers and the future of work?

Figure 1: Predicted probability of reporting job satisfaction, by self-employment status and country

Figure 2: Job satisfaction consequences of switching from salaried employment to self-employment vs. remaining salaried employed in Germany, 1991-2017

Despite the high job demands, business owners also have high job control and autonomy over their tasks. This independent way of working gives rise to “,” ie, the enjoyment of the process as well as the outcome of working while avoiding hierarchy and subordination. This unique combination of high job demands but also high job control gives rise to “,” a state when work leads to self-actualisation, mastery, new skill development and ultimately greater well-being. In fact, .

Like self-employment, teleworking comes with many challenges and job . It may result in and increased responsibilities, more , conflicting priorities, and loneliness because of less socialisation with colleagues. The relationships individuals have at work are not only crucial for the flow of information but are .

Yet, teleworking also provides , which may help create “active jobs” for knowledge workers working for an employer. For example, those who work from home can often flexibly decide their working hours or take breaks to accommodate household chores or other obligations. This increased freedom and autonomy, . Also, given that , the reduced need to travel to work may increase happiness, . Unsurprisingly, . In the United States, they are even willing to take in exchange for this opportunity and the flexibility it brings. Like with the self-employed, the autonomy and freedom due to teleworking can outweigh the stress associated with it and ultimately durably shape preferences for teleworking. In Europe, that they would like to work from home, even after the pandemic is over. While only 13% wanted to telework daily, about a third said they would like to use their home office several times a week. Moreover, , implying overall positive experiences with teleworking.

Against this backdrop, employers may need to make additional provisions to support teleworkers in a post-pandemic world. First, firms may need to invest in additional ICT resources or training to accommodate their employee’s changing needs. In , implying that they may be lacking the necessary equipment or skills required for working from home. Second, employers may have to specify the options and conditions for voluntary teleworking in the future, including the tasks they would like to be done remotely, and the opportunities of coming to the office and socialising with co-workers. Finally, managers may have to , for example, by initiating more direct personal contact via phone or video-chat and .

Governments can play an important role, too. The continuous supply of childcare services and educational activities can support working parents, especially women, with balancing work and caregiving or home-schooling duties. In some cases, when schools or kindergarten are closed may be an option. In addition, policymakers can focus on to outline the conditions for requesting to telework or hybrid working and ensure equal pay for teleworkers and office workers.

These policies will help harness the benefits of autonomy, flexibility and self-organisation that come with teleworking or hybrid working modes and mitigate the stress, burnout, isolation, or unfair treatment that may accompany working from home.

This blog was produced within the project ““, with the financial support of the Mastercard Center for Inclusive Growth.

Recommended citation:

Nikolova, M. (2021) ‘Self-employment, COVID-19, and the future of work for knowledge workers’ Bruegel Blog, 4 March