Finding fully remote work is getting increasingly hard to come by. Many trends have evolved over the past few years. Following the COVID-19 pandemic, many new opportunities for remote work opened up. Some jobs were only able to continue online for a while, while others have operated that way much longer.
Now that many people are more well-adjusted to remote work or have a newfound desire for it, new research is showing it may be becoming more difficult to get into again. Many business owners and entrepreneurs are reevaluating whether or not remote work is what is best for them, and this is not going without a reaction from employees.
Remote Work In 2020
There are many reasons business owners are steering away from remote work again, but it’s a very different perspective than what many people were displaying in 2020.
In 2020, many leaders had seen remote work as an opportunity. Many of these ideas were reflected by some of the biggest and most popular company owners in America. In May of that year, Mark Zuckerberg, CEO of META, explained there were advantages to remote work – one large one being the ability to bring people on board from a broader range of areas.
“The biggest advantages, I think, are access to large pools of talent who don’t live around the big cities and aren’t willing to move there,” he said.
Andy Jassy, CEO of Amazon, expressed a similar idea. He said after nine months of remote work, he realized that remote work expanded his ability to collaborate with people from different locations who were qualified and willing to work the same hours. He said this even led to the company making adjustments to the hiring process.
In less than three years, that narrative has changed. Many of those same people who were excited by the opportunities given to their company in 2020 due to remote work have now changed their statements and for more reasons than one.
There have been a lot of studies done revolving around the use of remote work and the impact it has on the working world. This data suggests these statements have had an effective influence as many people are starting to steer away from remote work again.
Data from the Census Bureau in October displayed less than 26% of households in the US still have someone working from home. In early 2021, this number was 37%. New research from Indeed also found that job postings that allow for remote work settings are declining faster in metropolitan areas.
As time has gone on, many employers have grown increasingly concerned about the effects of remote work. Many of these ideas were present early on as well, but with little choice for continuing work in an in-person setting, not much was done about it until more recently.
Kory Kantenga, senior economist for LinkedIn, explained this change is likely due to the slowdown in the labor market. He said many employers already had suspicions before the slowdown about remote work, and with emergency orders finally expiring, employers are eager to bring people back in hopes of increasing productivity levels.
The US Census Bureau reported the number of people working primarily from home tripled between 2019 and 2021. Many professionals went almost fully remote from the shutdown in March 2020. Professionals were now able to work within the comfort of their own homes, wearing casual clothing and not having to worry about a daily commute. This also allowed people to save more money and spend more time with their families at home.
New ways of communicating with people from an at-home setting also became more popular. Video call services and team chat rooms became common use for simulating the in-person experience of communication.
Factors to Consider
Now many employers that expressed the opportunities remote work had allowed them are making strong cases for those same employees to return to the office. Some of the same faces of the companies that previously expressed their happiness at being able to work from home now began threatening employees with job loss if they didn’t return in person. Even Zoom, one of the primary video call services that made work from home possible, was among those who began mandating a return to office for some of their employees.
Some recent experimental studies may back up some of these claims of less productivity from employees working from home. This decline has been reflected over the past five years.
One study done by Stanford University professor, Nicholas Bloom, co-authored showed that fully remote work lowers average productivity by 10% to 20% when compared to work that is fully done in person. Many business owners are reflecting on these concerns and how they could affect company profits.
Alternatively, workplaces that function 100% remotely can save a lot of money on overhead costs. These fully remote workplaces can save about 10% in overhead costs because there is no need for physical office space. Additionally, this gives the company the ability to hire other people nationally, which can decrease the amount the company has to spend on funding workers’ wages.
What Workers Have To Say
Some workers claim they are more productive when given the choice of setting they can work from. Matt Conrad, senior sales enablement specialist for the International Business Machines Corporation (IBM), said he believes as long as the person can remain productive, they should be able to work from whatever space feels best for them. Conrad said he has experienced this firsthand. He has camped in Key West, North Dakota, the coast of California, and has visited national parks, all while completing his work.
“For me, that’s where I feel best working and that’s where I have gotten my best work done,” he said. “I believe we can work from anywhere.”
Some of those people were fortunate enough to find another fully remote job to work with, however, others were not so lucky. Many people were offered this opportunity to work for places far away from and to spend extra time with their families. When mandates for in-person work began, some people were unable to meet that requirement.
Many people who were given no choice but to return to the office had to make additional hard choices. Since remote work allowed companies to hire people from all areas instead of just locally, returning to the office for some people meant relocation and leaving their families behind. If they didn’t want to take this option, they had to look for work elsewhere. Some others who did live closer decided they liked working from home, and would seek out other offers that would allow them to continue to do so.
The “Urban Doom Loop”
Remote work is becoming increasingly competitive, not just for employees, but for the real estate industry too. Although remote work can offer a variety of benefits to employees, this isn’t the case for commercial real estate.
One recent report from McKinsey Global Institute shows remote work threatens to erase $800 billion from the value of office real estate in nine major cities. This is what some are referring to as the “urban doom loop.”
Increased demand for remote work comes with decreased demand for office space, and this has been a trend for the past few years. This has led to an all-time high in vacancy rates in the office market and downward pressure on the valuation of these offices.
Research suggests these office valuation rates have already fallen around 20% to 30%, and they’re still likely to keep falling.
Stijn Van Nieuwerburg, former advisor to the Norwegian Ministry of France, explained these falling rates have a huge impact on property tax revenues. In a lot of these cities, property tax revenues are a large portion of their tax revenues. Nieuwerburgh said this is often as much as 50%, and maybe about 10% to 20% come from offices. When these amounts of incoming tax money are dropped, a hole is created in the budget.
Is Society Moving Backwards?
Joanna Lipman, lecturer at Yale University, said that while commercial real estate is problematic, so is the approach of getting people to return to the office.
“There are a lot of people now that are saying ‘We need to bring people back to the office because our commercial buildings are empty,’ which is a little bit like saying we need to have people use the horse and buggy because cars are going to wipe out that industry,” she said. “We have to understand that the world has changed.”
Lipman said pushing the return to the office due to commercial real estate issues is pushing outdated ways and commercial real estate instead should be the one to change their ways. She said some other cities may have already found the solution. Some cities are now taking those vacant office spaces and repurposing them for other uses such as residential housing.
There is one other group that is impacted by remote work, and that is the businesses that support office workers. These include businesses such as food trucks and laundry services. Many of these places depend on the traffic coming through five days a week, and when this isn’t happening, it could hurt their business.
No matter what the reason may be, Jason Greer, founder of Greer Consulting, suggests that if employees are being pushed to go back to the office, it shouldn’t be for a reason other than just because it is what the employer wants. Business owners and entrepreneurs have many factors to consider before requiring employees to return in person. Taking the wrong approach could negatively impact the business.
There are many business owners now who are encouraging more days in the office, however, not everyone believes that we will ever fully transition back to the businesses operated before the pandemic. Many companies that are now calling their employees back to the office no longer require the full five days a week. Many are beginning to require only a few days in the physical office space, allowing the rest of the work to be done remotely.
No one is 100% sure yet what the future may hold for the world of remote work, but many are certain it won’t entirely disappear.