The wave of remote working and Zoom meetings created for office workers and white-collar workers during the COVID-19 pandemic will have lasting social and economic impacts. But the tide of telecommuting is still not spreading to the majority of private sector jobs.
A new survey by the Bureau of Labor Statistics found that 60% of companies “rarely or never” allow their employees to work remotely. These employers have more than 58.7 million workers, according to the federal report, accounting for 49.8% of private sector employment.
This contrasts with nearly 30% of employers with 55.9 million workers allowing some work from outside the office, and 10% of workplaces that are now entirely virtual, according to the BLS.
Jobs that have been completely removed and gone virtual during the pandemic account for 3.5 million workers. According to the Business Agency, that is 3% of employees in the private sector.
Still, the percentage of American workers working remotely, at least some of the time, has increased from 22% in 2019 before COVID and its associated shutdowns and health concerns.
“Remote work results may seem a bit low at first glance, but when you look at the total number of institutions offering some form of remote work in 2021 (approx. 40.1%), this represents a significant number of organisations” , Deirdre Macbeth, content director for staff group WorldatWork, said via email.
The BLS survey found that 34.5% of private employers have expanded teleworking opportunities during the pandemic, and another 60% of those companies will maintain those policies after the coronavirus pandemic.
“They realized that this can work,” said Jeff Zbar, a Florida-based remote work expert, author and director at ChiefHomeOfficer.com, of telecommuting adoption rates in professional sectors and administrative and creative jobs.
He said businesses have more confidence in the technology needed for remote work, and employee-friendly remote work policies lead to improved productivity and morale.
The experts say that old-school corporate cultures and managers who want to see employees at their desks via Zoom instead are often the motivations in office workplaces where working from home is not accepted.
“For other organizations where remote work is feasible but not yet fully embraced, organizational culture and the challenges of managing a distributed workforce can be a factor,” Macbeth said.
This can result in their competitive risk.
Many job applicants, particularly in professional, creative, and high-tech industries, see remote work opportunities as essential to their job search and career paths. Zbar said more children are growing up with parents who work from home, and many will expect the same from their jobs.
“The talent pool is now expecting more remote work options, and companies need to offer those options to remain competitive,” Macbeth said. She said WorldatWork research shows that 72% of employers are now “deliberately” designing remote jobs, compared to 55% in 2019.
Zbar said the jury is still out on the lasting impact of the pandemic-related remote work, but he anticipates many workplaces will adopt hybrid models where employees can flexibly work in the office or at home.
“I think we’re going to see a whole subset of industries, or at least categories of people and professions that never thought they could[work remotely],” Zbar said, pointing to the growth of remote work in areas like customer service to call centers and telemedicine.
The lack of home office opportunities for other workers may stem from logistical and operational realities for blue collar and service-oriented jobs.
“Obviously, not every company has the luxury of doing work remotely,” Macbeth said, citing operations like manufacturing and healthcare.
Doctor’s offices, laboratories, service companies, and places like grocery stores, pharmacies, restaurants, and bars all have operations that require staff to be physically present in the workplace.
Remote work is also one of the dichotomies of the pandemic. Office workers and technicians have been able to work from home during the pandemic, even during the closure of schools and daycare centers, while frontline workers in restaurants, supermarkets, bars and logistics and manufacturing facilities have had to go to work.
This matches pandemic economic conditions, which have also resulted in stock market records and surging property values that have benefited the affluent and upper-middle class, while often lower-paid service workers and workers have borne the brunt of the more than 22 million jobs lost and wage cuts early in the pandemic.
The increase in remote working during the pandemic is also impacting commercial real estate markets.
According to a 2021 research report and survey of office tenants, commercial real estate firm CBRE expects 87% of larger companies to adopt hybrid working models that allow employees to work remotely at least some of the time.
Lower demand for office space is also expected from smaller workplace spaces as more workers are allowed to work from home during the pandemic.
According to JLL, a national commercial real estate company, the vacancy rate in the US was 19.7% at the end of 2021, compared to 14.3% at the end of 2019.
“I would hate to be a commercial real estate owner right now,” said Zbar, who is based in Fort Lauderdale. “You have many tenants who come to renegotiate.”
Zbar said some office tenants may downsize as more employees work from home, with a focus on “touchdown spaces” when those employees are needed in the office. That can mean one day a week instead of 40 hours or more.
“You’re going to see some industries pull back from their (real estate investments),” Zbar said.
The $16 trillion US commercial real estate industry is still waiting to see when that shoe drops.
The BLS survey found that the vast majority of U.S. businesses have remained steadfast on the size of their jobs, even with the increase in remote work.
According to the federal survey, 91% of private employers have roughly the same space as they did before the pandemic, and another 92.4% of those companies say they plan to maintain their current operational footprint over the next 12 months.
Harry Shasho, president of Shasho Consulting, a commercial real estate firm in White Plains, Maryland, said he hasn’t seen a significant drop in demand for land in Southern Maryland, which is an hour southeast of Washington, DC
Medical users, storage unit developers, and logistics tenants (including Amazon.com) are still thirsty for space in numerous US regions.
“They still want space. You buy buildings. They’re buying land,” said Shasho, who has been in the real estate business for 37 years.
He said 2021 had been one of his busiest as demand was boosted by healthcare users. Shasho said hospital systems operated by the University of Maryland and Johns Hopkins University have secured major real estate deals in the area and smaller medical tenants have moved into vacant mall space.
“I have a lot of dentists, a lot of chiropractors and a lot of physical therapists (who go into retail),” Shasho said.
That has helped the retail vacancy rate remain more resilient despite the expansive growth of Amazon and e-commerce, ending 2019 at 10.2% and 2021 at 10.3%, according to Moody’s Analytics.
Shasho also expects more employers to look to remote suburbs and smaller and mid-sized markets for work locations in larger cities due to the high costs.
Most private employers have also not required COVID-19 vaccines from their workers, according to the BLS Private Sector Survey. This comes despite federal mandates and pushes by the Biden administration and some requests from companies like Facebook, Bank of America, Microsoft and Apple.
The BLS survey found that 17.5% of private employers require their employees to be vaccinated. That equates to 17.1 million US workers.
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