Since the beginning of the pandemic, businesses able to shift their employees to remote work have done so with varying degrees of eagerness. Telecommuting became a lifeline for operations that were resistant to work-from-anywhere arrangements in the past but found them to be the only way to continue operating amidst lockdown orders and public fear of infection. But will the changes stick for the long term? Or will workplaces revert to their pre-pandemic forms?
It’s looking more and more like there’s no reason for some of us to change out of pajamas; the evidence suggests that remote work has been a boon for many people and is here to stay. That has big implications for expanding people’s choices about where they live and why. But it may also widen the divide between those can work where they live and those who must live where they work.
“More than 20 percent of the workforce could work remotely three to five days a week as effectively as they could if working from an office,” the U.S.-based consulting firm McKinsey & Company reported in November of an analysis of the workforces in nine countries (China, France, Germany, India, Japan, Mexico, Spain, the United Kingdom, and the United States). “If remote work took hold at that level, that would mean three to four times as many people working from home than before the pandemic and would have a profound impact on urban economies, transportation, and consumer spending, among other things.”
Researchers at the University of Chicago’s Becker Friedman Institute (BFI) agree that remote work has gained a larger permanent presence in our lives.
“Our survey evidence says that 22 percent of all full work days will be supplied from home after the pandemic ends, compared with just 5 percent before,” Jose Maria Barrero, Nicholas Bloom, and Steven J. Davis report in a working paper based on data drawn from 15,000 Americans.
Part of the stickiness of remote work arrangements may be that their time has come. The technological capability has existed for many years for desk-based jobs to be performed from anywhere, yet managers were often hesitant about allowing employees out of their sight. COVID-19 overcame that hurdle for many businesses.
“The pandemic has helped workers and organizations overcome inertia related to the costs of experimentation, as well as inertia stemming from biased expectations about working from home,” BFI notes.
Importantly, too, the experience has proven positive for workers and employees alike.
“One striking finding is how greatly workers benefit from these arrangements,” Harvard Business Administration Professor Prithwiraj (Raj) Choudhury wrote last month in Harvard Business Review. “Many told me that they regard the freedom to live anywhere in the world as an important plus. For those in dual-career situations, it eases the pain of looking for two jobs in a single location.”
“My research also uncovered ample organizational benefits from [work from anywhere] programs. For example, they increase employee engagement—an important metric of success for any company,” Choudhury added. He also cited increased productivity among workers and reduced real estate costs for employers who no longer needed big workplaces as major pluses.
“Many workers report being more productive at home than on business premises, so post-pandemic work from home plans offer the potential to raise productivity as much as 2.4 percent,” agree BFI researchers.
Like the others, McKinsey emphasizes that “companies will need less office space, and several are already planning to reduce real estate expenses.” The company’s report points to outdoor retailer REI’s sale of its new corporate campus in favor of a distributed model for office staff.
That suggests that the normalization of remote work offers the prospect of lower costs and increased productivity. Those are attractive prospects at any time, and even more so as people struggle to recover from pandemic-and lockdown-caused economic doldrums.
All of the researchers looking at the growth of remote work suggest that some of the result will be “hybrid” arrangements with people working at home some days and in the office others. But reduced commercial real estate commitments, improved efficiency, and happier workers telecommuting from where they please are expected to have a big enough impact to change the nature of many cities.
“The impact of that will reverberate through the restaurants and bars, shops, and services businesses that cater to office workers and will put a dent in some state and local tax revenues,” McKinsey suggests.
“We estimate that the post-pandemic shift to working from home (relative to the pre-pandemic situation) will lower post-COVID worker expenditures on meals, entertainment, and shopping in central business districts by 5 to 10 percent of taxable sales,” BFI agrees.
Population already appears to be shifting in response to increased acceptance of remote work. New York City and San Francisco, in particular, are losing people to smaller cities, suburbs, and exurbs as many Americans follow their preferences to less dense, lower-cost communities.
That may also mean an even bigger hit for the service-sector types who are among the part of the workforce for whom remote work isn’t an option. Already slammed by lockdown orders that sidelined them while white collar workers shifted their commutes from the highway to the hallway, waiters, delivery people, factory employees, dentists, shop owners, and others who must be physically present to do their jobs won’t benefit from the growth of telework and may suffer from the loss of business.
Some of those workers will follow customers to new locales as old business districts become less important. Others, however, will have harder adjustments. It would be wonderful if expanded choices became evenly available to everybody at the same time, but that’s not the way the world works.
For those who do benefit from increased acceptance of remote work, life should become a bit easier. People will enjoy increased opportunities to live where they want while working jobs that appeal to them. Couples won’t have to prioritize one partner’s employment over another’s. Able to do our jobs from where we please, life for many of us will, happily, reflect a bit more of what we want rather than what we have to do to get by.
Founded in 1968, Reason is the magazine of free minds and free markets. We produce hard-hitting independent journalism on civil liberties, politics, technology, culture, policy, and commerce. Reason exists outside of the left/right echo chamber. Our goal is to deliver fresh, unbiased information and insights to our readers, viewers, and listeners every day. Visit https://reason.com