Why remote work has staying power

Remote work, a trend that came to the fore during the Covid-19 pandemic, appears to be a permanent part of the US labor market, according to economists.

The work-from-home revolution is “one of the biggest shifts in the U.S. labor market in recent decades,” said Nick Bunker, economic research director for North America at Indeed.

“It’s still kicking,” he said. “It will probably take quite some time.”

The remote working label includes employees who do their work full-time from home and so-called ‘hybrid’ arrangements, where companies can ask their employees to work from the office for a few days of the working week and from home the rest.

Such arrangements were rare before the pandemic, economists say.

However, they became productive due to the stay-at-home order during the early days of the pandemic.

While remote work options have declined from their peak, they appear to have stabilized well above pre-pandemic levels, economists said.

The number of days you work from home during the working week has held up since the start of 2023 by between 25% and 30%, more than three times the pre-Covid-19 crisis, according to July WFH Research data. A

The share of online job vacancies advertising remote or hybrid work also appears to be increasing flattened at just under 8%, about three times higher than in 2019, according to Indeed data as of June 30.

“Remote work is not going away,” Nick Bloom, an economics professor at Stanford University who studies workplace management practices, recently told CNBC.

Remote work has endured largely because it benefits both workers and employers, economists say.

For example, Bloom’s research shows that employees value hybrid work about as much as an 8% pay increase.

“It’s a big deal for a lot of job seekers,” making it difficult for employers to “eliminate” that aspect of the job, Bunker said.

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Remote work is also a profitable arrangement for companies, economists said.

For example, they can save money on real estate by downsizing their office space. Remote work also opens up the pool of potential candidates during hiring, Bunker said.

Employees who can work remotely also tend to quit less often because they value the arrangement, reducing company spending on recruitment, hiring and training, Bloom said.

Of course, not all jobs can be done from home. According to WFH Research, about 36% of employees with tasks that could be done remotely were working full-time in the office as of July.

Companies have pointed to the downsides of remote work, including a reduced ability to observe and monitor employees and less peer mentoring, cited by 45% and 42% of employers, respectively, according to a 2023 ZipRecruiter. questionnaire.

An economic downturn could potentially lead employers to scale back remote work to the extent employees lose leverage, Bunker said.

However, he wonders whether many would do this given the aforementioned financial benefits of remote work. Moreover, such a move would likely reduce employee morale and productivity during a period of already low morale, he added. A