Working From Home Is Settling In, But Questions Remain – Forbes

For some observers, the COVID-19 pandemic has ushered in a big labor market change—significantly higher levels of working from home (WFH). Recent studies find WFH is getting locked into the labor market, at least for some occupations and industries, although some experts caution we still don’t know how it will play out in the long run.

The pandemic had many impacts: “warp speed” vaccine development, aggressive federal spending to fight a dramatic economic collapse, and politicization of public health in ways we’ve never seen before. But there’s also been a significant rise in WFH and remote work.

The levels of WFH are new. For years, big thinkers like Alvin Toffler and Peter Drucker were predicting more remote home-based work due to new technology.

But in spite of the internet, telecommunications, and other technical innovations, we didn’t see a big increase in remote work. Scholars like NYU’s Mitchell Moss pointed out that telecommunications and related technology could decentralize but also centralize economic activity, and that centralizing forces kept winning out.

Now two recent reports (consistent with other data) both find WFH seems to be getting locked in for many workers and firms.

The first was conducted by Global Workplace Analytics for Owl Labs, a provider of remote workplace technology. In July 2022, they surveyed “over 2300 full-time workers” in firms with ten or more employees, concentrated in professionalized and technologically sophisticated service industries.

The results? Remote work for this group “increased 24%” over 2021, while hybrid work (mixing remote and in-office work) rose 16%. Remote workers reported at least steady, if not higher, levels of productivity and less work-related stress.

Attachment to remote work led the respondents to say that “if the ability to work from home was taken away,” 66% (of those working remotely) “would immediately start looking for a job that offered flexibility.” And “39% would simply quit.”

Bold talk. The report doesn’t put these claims in the context of very low unemployment rates for professional and technologically sophisticated workers. And the survey was conducted before we saw the big layoffs by tech firms like Google GOOG , Meta, Twitter, and Amazon AMZN . But the enthusiasm for remote work found in this survey signals how valued it has become for many workers.

OK, but that survey was sponsored by a company that provides remote working technology. So are the results tainted? (I should note I contacted them for details on their sampling and survey methods, and they were very forthcoming.) No, the Owl Labs findings aren’t unique, and are consistent with a more recent report from Nick Bloom at Stanford University.

Bloom consistently has found claimed a big, and he thinks permanent, impact from remote work. His latest report continues in that vein, finding a “6-fold jump” in working from home compared to 2019.

Bloom sees employees sorting into three groups. “Fully on-site” workers (57.5%) are “front line” workers with less education and lower pay. “Hybrid” workers (29.2%) have higher educations and higher pay and benefits, while “full WFH” workers (13.3%) are concentrated in “specialized roles” like IT, accounting, and some HR functions. They also are more likely to be contractors.

Bloom shows the dramatic pandemic-associated jump in WFH, with a graph detailing that “WFH days” had been “doubling every 12 years pre-pandemic.” When the pandemic hit, WFH skyrocketed and now seems to be stabilizing at a level six times above the pre-pandemic one, “equal to 50 years of pre-pandemic growth” in just a few years.

So is WFH fully locked in? Expert observers like Matthew Kahn and Steven Davis agree with Bloom, arguing the data show WFH is increasingly stable and heading towards permanence. Again, we’ll need to see what happens in a recession when workers have less bargaining power.

But we need to remember cautions from the Wharton School’s Peter Cappelli, one of our top analysts of the modern workplace. His 2021 book The Future of the Office emphasized the “hard choices” employees and employers are facing with WFH.

Cappelli notes not all workers like full remote, and conflict may develop between remote and hybrid or in-office workers. The latter have more access to valuable informal information and training, and are closer to managers and bosses, which will likely help them rise faster than WFH workers.

Also, the productivity of WFH may fade, and firms may then start to supervise workers more intensely, via monitoring software or other means. This could make WFH more contentious and less attractive.

One finding in the Owl Labs survey hints at this problem. Half of the workers surveyed believe “managers view those in the office as harder working and more trustworthy than their remote counterparts.”

Although most managers may not be as opposed to WFH as Elon Musk or Jamie Dimon, problems of work coordination, evaluation of productivity, and onboarding new staff could create significant headaches at firms with lots of WFH.

There’s no question the pandemic accelerated WFH well beyond previous trends. And many (but not all) workers like WFH, while employers are struggling to figure it out. It will take a recession, addressing tensions between remote and other workers, and reactions from managers and CEOs before we know how big and how permanent the change will be.