work from home is the future of work essay

The bright future of working from home

There seems to be an endless tide of depressing news in this era of COVID-19. But one silver lining is the long-run explosion of working from home. Since March I have been talking to dozens of CEOs, senior managers, policymakers and journalists about the future of working from home. This has built on my own personal experience from running surveys about working from home and  an experiment  published in 2015 which saw a 13 percent increase in productivity by employees at a Chinese travel company called Ctrip who worked from home.

So here a few key themes that can hopefully make for some good news:

Mass working from home is here to stay

Once the COVID-19 pandemic passes, rates of people working from home will explode. In 2018, the Bureau of Labor Statistics  figures show  that 8 percent of all employees worked from home at least one day a week.

I see these numbers more than doubling in a post-pandemic world.  I suspect almost all employees who can work from home —  which is estimated  at about 40 percent of employees ­— will be allowed to work from home at least one day a week.

Why? Consider these three reasons

Fear of crowds.

Even if COVID-19 passes, the fear of future pandemics will motivate people to move away from urban centers and avoid public transport. So firms will struggle to get their employees back to the office on a daily basis. With the pandemic, working from home has become a standard perk, like sick-leave or health insurance.

Investments in telecommuting technology

By now, we have plenty of experience working from home. We’ve become adept at video conferencing. We’ve fine-tuned our home offices and rescheduled our days. Similarly, offices have tried out, improved and refined life for home-based work forces. In short, we have all paid the startup cost for learning how to work from home, making it far easier to continue.

The end of stigma

Finally, the stigma of working from home has evaporated. Before COVID-19, I frequently heard comments like, “working from home is shirking from home,” or “working remotely is remotely working.” I remember Boris Johnson, who was Mayor of London in 2012 when the London Olympics closed the city down for three weeks, saying working from home was “a skivers paradise.” No longer. All of us have now tried this and we understand we can potentially work effectively — if you have your own room and no kids — at home.

Of course, working from home was already trending up due to improved technology and remote monitoring. It is relatively cheap and easy to buy a top-end laptop and connect it to broadband internet service. This technology also makes it easier to monitor employees at home. Indeed, one senior manager recently told me: “We already track our employees — we know how many emails they send, meetings they attend or documents they write using our office management system. So monitoring them at home is really no different from monitoring them in the office. I see how they are doing and what they are doing whether they are at home or in the office.”

This is not only good news for firms in terms of boosting employee morale while improving productivity, but can also free up significant office space. In our China experiment, Ctrip calculated it increased profits by $2,000 per employee who worked from home.

Best practices in working from home post pandemic

Many of us are currently working from home full-time, with kids in the house, often in shared rooms, bedrooms or even bathrooms. So if working from home is going to continue and even increase once the pandemic is over, there are a few lessons we’ve learned to make telecommuting more effective. Let’s take a look:

Working from home should be part-time

I think the ideal schedule is Monday, Wednesday and Friday in the office and Tuesday and Thursday at home. Most of us need time in the office to stay motivated and creative. Face-to-face meetings are important for spurring and developing new ideas, and at least personally I find it hard to stay focused day after day at home. But we also need peaceful time at home to concentrate, undertake longer-term thinking and often to catch-up on tedious paperwork. And spending the same regular three days in the office each week means we can schedule meetings, lunches, coffees, etc., around that, and plan our “concentration work” during our two days at home.

The choice of Tuesday and Thursday at home comes from talking to managers who are often fearful that a work-from-home day — particularly if attached to a weekend — will turn into a beach day. So Tuesday and Thursday at home avoids creating a big block of days that the boss and the boss of the boss may fear employees may use for unauthorized mini-breaks.

Working from home should be a choice

I found in the Ctrip experiment that many people did not want to work from home. Of the 1,000 employees we asked, only 50 percent volunteered to work from home four days a week for a nine-month stretch. Those who took the offer were typically older married employees with kids. For many younger workers, the office is a core part of their social life, and like the Chinese employees, would happily commute in and out of work each day to see their colleagues. Indeed,  surveys in the U.S.  suggest up to one-third of us meet our future spouses at work.

Working from home should be flexible

After the end of the 9-month Ctrip experiment, we asked all volunteers if they wanted to continue working from home. Surprisingly, 50 percent of them opted to return to the office. The saying is “the three great enemies of working from home are the fridge, the bed and the TV,” and many of them fell victim to one of them. They told us it was hard to predict in advance, but after a couple of months working from home they figured out if it worked for them or not. And after we let the less-successful home-based employees return to the office, those remaining had a 25 percent higher rate of productivity.

Working from home is a privilege

Working from home for employees should be a perk. In our Ctrip experiment, home-based workers increased their productivity by 13 percent. So on average were being highly productive. But there is always the fear that one or two employees may abuse the system. So those whose performance drops at home should be warned, and if necessary recalled into the office for a couple of months before they are given a second chance.

There are two other impacts of working from home that should be addressed

The first deals with the decline in prices for urban commercial and residential spaces. The impact of a massive roll-out in working from home is likely to be falling demand for both housing and office space in the center of cities like New York and San Francisco. Ever since the 1980s, the centers of large U.S. cities have become denser and more expensive. Younger graduate workers in particular have flocked to city centers and pushed up housing and office prices. This 40-year year bull run  has ended .

If prices fell back to their levels in say the 1990s or 2000s this would lead to massive drops of 50 percent or more in city-center apartment and office prices. In reverse, the suburbs may be staging a comeback. If COVID-19 pushed people to part-time working from home and part-time commuting by car, the suburbs are the natural place to locate these smaller drivable offices. The upside to this is the affordability crisis of apartments in city centers could be coming to an end as property prices drop.

The second impact I see is a risk of increased political polarization. In the 1950s, Americans all watched the same media, often lived in similar areas and attended similar schools. By the 2020s, media has become fragmented, residential segregation by income has  increased dramatically , and even our schools are starting to fragment with the rise of charter schools.

The one constant equalizer — until recently — was the workplace. We all have to come into work and talk to our colleagues. Hence, those on the extreme left or right are forced to confront others over lunch and in breaks, hopefully moderating their views. If we end up increasing our time at home — particularly during the COVID lock-down — I worry about an explosion of radical political views.

But with an understanding of these risks and some forethought for how to mitigate them, a future with more of us working from home can certainly work well.

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The Realities of Remote Work

• Laura Amico

Work-life boundaries are blurring and managers worry about productivity. What can be done?

The Covid-19 pandemic sparked what economist Nicholas Bloom calls the “ working-from-home economy .” While some workers may have had flexibility to work remotely before the pandemic, this unprecedented shift to remote work looks like it could be here to stay in some form.

• Laura Amico is a former senior editor at Harvard Business Review.

Partner Center

What’s next for remote work: An analysis of 2,000 tasks, 800 jobs, and nine countries

For many workers, COVID-19’s impact has depended greatly on one question: Can I work from home or am I tethered to my workplace? Quarantines, lockdowns, and self-imposed isolation have pushed tens of millions around the world to work from home, accelerating a workplace experiment that had struggled to gain traction before COVID-19 hit.

Now, well into the pandemic, the limitations and the benefits of remote work are clearer. Although many people are returning to the workplace as economies reopen—the majority could not work remotely at all—executives have indicated in surveys that hybrid models of remote work  for some employees are here to stay. The virus has broken through cultural and technological barriers that prevented remote work in the past, setting in motion a structural shift in where work takes place, at least for some people.

Now that vaccines are awaiting approval, the question looms: To what extent will remote work persist ? In this article, we assess the possibility for various work activities to be performed remotely. Building on the McKinsey Global Institute’s body of work on automation, AI, and the future of work, we extend our models to consider where work is performed. 1 The future of work in Europe: Automation, workforce transitions, and the future geography of work , McKinsey Global Institute, June 2020; The future of work in America: People and places, today and tomorrow , McKinsey Global Institute, July 2019; Jobs lost, jobs gained: Workforce transitions in a time of automation , McKinsey Global Institute, December 2017. Our analysis finds that the potential for remote work is highly concentrated among highly skilled, highly educated workers in a handful of industries, occupations, and geographies.

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. 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.

The virus has broken through cultural and technological barriers that prevented remote work in the past, setting in motion a structural shift in where work takes place, at least for some people.

More than half the workforce, however, has little or no opportunity for remote work. Some of their jobs require collaborating with others or using specialized machinery; other jobs, such as conducting CT scans, must be done on location; and some, such as making deliveries, are performed while out and about. Many of such jobs are low wage and more at risk from broad trends such as automation and digitization. Remote work thus risks accentuating inequalities at a social level.

The potential for remote work is determined by tasks and activities, not occupations

Remote work raises a vast array of issues and challenges for employees and employers. Companies are pondering how best to deliver coaching remotely and how to configure workspaces to enhance employee safety, among a host of other thorny questions raised by COVID-19. For their part, employees are struggling to find the best home-work balance and equip themselves for working and collaborating remotely.

In this article, however, we aim to granularly define the activities and occupations that can be done from home to better understand the future staying power of remote work. We have analyzed the potential for remote work—or work that doesn’t require interpersonal interaction or a physical presence at a specific worksite—in a range of countries, China, France, Germany, India, Japan, Mexico, Spain, the United Kingdom, and the United States. We used MGI’s workforce model based on the Occupational Information Network (O*NET) to analyze more than 2,000 activities in more than 800 occupations and identify which activities and occupations have the greatest potential for remote work.

The potential for remote work depends on the mix of activities undertaken in each occupation and on their physical, spatial, and interpersonal context. We first assessed the theoretical extent to which an activity can be done remotely. This depends on whether a worker needs to be physically present on-site to do a task, interact with others, or use location-specific machinery or equipment.

Many physical or manual activities, as well as those that require use of fixed equipment, cannot be done remotely. These include providing care, operating machinery, using lab equipment, and processing customer transactions in stores. In contrast, activities such as information gathering and processing, communicating with others, teaching and counseling, and coding data can theoretically be done remotely.

Additionally, employers have found during the pandemic that although some tasks can be done remotely in a crisis, they are much more effectively done in person. These activities include coaching, counseling, and providing advice and feedback; building customer and colleague relationships; bringing new employees into a company; negotiating and making critical decisions; teaching and training; and work that benefits from collaboration, such as innovation, problem-solving, and creativity. If onboarding were to be done remotely, for instance, it would require significant rethinking of the activity to produce outcomes similar to those achieved in person.

For instance, while teaching has moved to remote work during the pandemic, parents and teachers alike say that quality has suffered. Similarly, courtrooms have functioned remotely but are unlikely to remain online going forward out of concern for legal rights and equity—some defendants lack adequate connectivity and lawyers, and judges worry about missing nonverbal cues in video conferences.

So we have devised two metrics for remote work potential: the maximum potential, including all activities that theoretically can be performed remotely, and a lower bound for the effective potential for remote work, which excludes activities that have a clear benefit from being done in person (Exhibit 1).

To determine the overall potential for remote work for jobs and sectors, we use the time spent on different activities within occupations. We find that remote work potential is concentrated in a few sectors. Finance and insurance has the highest potential, with three-quarters of time spent on activities that can be done remotely without a loss of productivity. Management, business services, and information technology have the next highest potential, all with more than half of employee time spent on activities that could effectively be done remotely (Exhibit 2). These sectors are characterized by a high share of workers with college degrees or higher.

Remote work potential is higher in advanced economies

The potential for remote work varies across countries, a reflection of their sector, occupation, and activity mix. Business and financial services are a large share of the UK economy, for example, and it has the highest potential for remote work among the countries we examined. Its workforce could theoretically work remotely one-third of the time without a loss of productivity, or almost half the time but with diminished productivity. (Exhibit 3). Other advanced economies are not far behind; their workforces could dedicate 28 to 30 percent of the time to working remotely  without losing productivity.

In emerging economies, employment is skewed toward occupations that require physical and manual activities in sectors like agriculture and manufacturing. The potential for time spent on remote work drops to 12 to 26 percent in the emerging economies we assessed. In India, for instance, the workforce could spend just 12 percent of the time working remotely without losing effectiveness. Although India is known globally for its high-tech and financial services industries, the vast majority of its workforce of 464 million is employed in occupations like retail services and agriculture that cannot be done remotely.

Although India is known globally for its high-tech and financial services industries, the vast majority of its workforce of 464 million is employed in occupations like retail services and agriculture that cannot be done remotely.

A hybrid model that combines some remote work with work in an office is possible for occupations with high remote work potential

For most workers, some activities during a typical day lend themselves to remote work, while the rest of their tasks require their on-site physical presence. In the US workforce, we find that just 22 percent of employees can work remotely between three and five days a week without affecting productivity, while only 5 percent could do so in India. In contrast, 61 percent of the workforce in the United States can work no more than a few hours a week remotely or not at all. The remaining 17 percent of the workforce could work remotely partially, between one and three days per week (Exhibit 4).

Consider a floral designer. We estimate that between half and one-quarter of his job can be done remotely. He can take orders by phone or online and contract for delivery through an app, but floral arrangement itself requires being in a shop where the flowers are stored in a refrigerated case and ribbons, moss, vases, and other materials used to create a floral design are at hand. To make a floral designer’s job more remote would require dividing his various tasks among all employees in a flower shop. In contrast, credit analysts, database administrators, and tax preparers, among others, can do virtually all of their work remotely. In general, workers whose jobs require cognitive thinking and problem solving, managing and developing people, and data processing have the greatest potential to work from home. These employees also tend to be among the highest paid.

The ability to work remotely also depends on the need to use specialized equipment. According to our analysis, a chemical technician could work remotely only a quarter of the time because much of her work must be done in a lab housing the equipment she needs. Among healthcare occupations, general practitioners who can use digital technologies to communicate with patients have a much greater potential for remote work than surgeons and x-ray technicians, who need advanced equipment and tools to do their work. Thus, among health professionals overall, the effective remote work potential is just 11 percent.

Even for the same activity, the context in which a job is done matters. Consider the activity “analyzing data or information,” which can be done remotely by a statistician or financial analyst but not by a surveyor. Crime scene analysts and workers who analyze consumer trends both engage in what O*NET describes as “getting, processing, analyzing, documenting and interpreting information,” but the former must go to the location of, say, a murder while the latter can do his work in front of a computer at home. A travel agent can calculate the cost of goods or services from a kitchen table, but a grocery clerk does that from behind a counter in a store.

And then there are jobs that require workers to be on-site or in person more than four days a week. Due to the physical nature of most of their work activities, occupations such as transportation, food services, property maintenance, and agriculture offer little or no opportunity for remote work. Building inspectors must go to a building or construction site. Nursing assistants must work in a healthcare facility. Many jobs declared essential by governments during the pandemic—nursing, building maintenance, and garbage collection, for example—fall into this category of jobs with low remote work potential.

This mixed pattern of remote and physical activities of each occupation helps explain the results of a recent McKinsey survey of 800 corporate executives  around the world. Across all sectors, 38 percent of respondents expect their remote employees to work two or more days a week away from the office after the pandemic, compared to 22 percent of respondents surveyed before the pandemic. But just 19 percent of respondents to the most recent survey said they expected employees to work three or more days remotely. This suggests that executives anticipate operating their businesses with a hybrid model  of some sort, with employees working remotely and from an office during the workweek. JPMorgan already has a plan for its 60,950 employees to work from home one or two weeks a month or two days a week, depending on the line of business.

Hybrid remote work has important implications for urban economies

Currently, only a small share of the workforce in advanced economies—typically between 5 and 7 percent—regularly works from home. A shift to 15 to 20 percent of workers spending more time at home and less in the office could have profound impacts on urban economies. More people working remotely means fewer people commuting between home and work every day or traveling to different locations for work. This could have significant economic consequences, including on transportation, gasoline and auto sales, restaurants and retail in urban centers, demand for office real estate, and other consumption patterns.

A McKinsey survey of office space managers conducted in May found that after the pandemic, they expect a 36 percent increase in worktime outside their offices, affecting main offices and satellite locations. This means companies will need less office space, and several are already planning to reduce real estate expenses. Moody’s Analytics predicts that the office vacancy rate in the United States will climb to 19.4 percent, compared to 16.8 percent at the end of 2019, and rise to 20.2 percent by the end of 2022. A survey of 248 US chief operating officers found that one-third plan to reduce office space in the coming years as leases expire.

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. For example, REI plans to sell off its new corporate headquarters before even moving in and instead begin operating from satellite offices. In contrast, Amazon recently signed leases for a total of 900,000 feet of office space in six cities around the United States, citing the lack of spontaneity in virtual teamwork.

As tech companies announced plans for permanent remote work options, the median price of a one-bedroom rental in San Francisco dropped 24.2 percent compared to a year ago, while in New York City, which had roughly 28,000 residents in every square mile at the start of 2020, 15,000 rental apartments were empty in September, the most vacancies in recorded history.

Nor is residential real estate immune from the impact of remote work. As tech companies announced plans for permanent remote work options, the median price of a one-bedroom rental in San Francisco dropped 24.2 percent compared to a year ago, while in New York City, which had roughly 28,000 residents in every square mile at the start of 2020, 15,000 rental apartments were empty in September, the most vacancies in recorded history. Conversely, bidding wars are breaking out in suburbs and smaller cities as remote workers seek less harried, less expensive lifestyles and homes with a room that can serve as an office or gym—though it is unclear how successful companies will be with workers scattered in far-flung locales.

Remote workers may also shift consumption patterns. Less money spent on transportation, lunch, and wardrobes suitable for the office may be shifted to other uses. Sales of home office equipment, digital tools, and enhanced connectivity gear have boomed.

Whether the shift to remote work translates into spreading prosperity to smaller cities remains to be seen. Previous MGI research in the United States and Europe has shown a trend toward greater geographic concentration of work  in megacities like London and New York and high-growth hubs, including Seattle and Amsterdam . These locales have attracted many of the same type of younger, highly educated workers who can best work remotely. It remains to be seen whether the shift to remote work slows that trend, or whether the most vibrant cities remain magnets for such people.

Organizations will have to adjust their practices to capture potential productivity gains from remote work

Is remote work good for productivity? Ultimately, the answer may determine its popularity, especially given the long period of waning labor productivity  that preceded the pandemic. So far, there is scant clarity—and widespread contradiction—about the productivity impact. Some 41 percent of employees who responded to a McKinsey consumer survey in May said they were more productive working remotely than in the office. As employees have gained experience working remotely during the pandemic, their confidence in their productivity has grown, with the number of people saying they worked more productively increasing by 45 percent from April to May.

With nine months of experience under their belts, more employers are seeing somewhat better productivity from their remote workers. Interviews with chief executives about remote work elicited a mixed range of opinions. Some express confidence that remote work can continue, while others say they see few positives to remote work.

With nine months of experience under their belts, more employers are seeing somewhat better productivity from their remote workers.

One impediment to productivity may be connectivity. A researcher at Stanford University found that only 65 percent of Americans surveyed said they had fast enough internet service to support viable video calls, and in many parts of the developing world, the connectivity infrastructure is sparse or nonexistent. Developing digital infrastructure will require significant public and private investment.

For women in particular, remote work is a mixed blessing. It boosts flexibility—not needing to be physically co-located with fellow workers enables independent work and more flexible hours—as well as productivity, with less time wasted commuting. Yet remote work also may increase gender disparity in the workplace, exacerbating the regressive effects of COVID-19. The female workforce in many economies is more highly concentrated in occupational clusters like healthcare, food services, and customer service that have relatively low potential for remote work. Previous MGI research on gender parity found that jobs held by women are 19 percent more at risk than jobs held by men simply because women are disproportionately represented in sectors most negatively affected by COVID-19.

Some forms of remote work are likely to persist long after COVID-19 is conquered. This will require many shifts, such as investment in digital infrastructure, freeing up office space, and the structural transformation of cities, food services, commercial real estate, and retail. It also risks accentuating inequalities and creating new psychological and emotional stresses among employees, including from isolation. For most companies, having employees work outside the office  will require reinventing many processes and policies. How long before someone invents the virtual watercooler?

The authors wish to thank Olivia Robinson, Gurneet Singh Dandona, and Alok Singh for their contributions to this article.

This article was edited by Stephanie Strom, a senior editor at the McKinsey Global Institute.

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Exploring the Concept of Remote Work Essay

Introduction, requirements for remote work, advantages of remote work, access to talent, enhanced productivity, flexibility, reduced costs.

Recent events have transformed the business landscape and organizational practices permanently. The COVID-19 pandemic has forced companies to apply crisis management plans to address the shift in the nature of work (de Lucas et al., 2020). It is vital that organizations adapt to change to remain relevant in the constantly evolving business environment. Companies must adopt novel and innovative strategies designed to promote efficiency. A study by Gallup demonstrated that 91% of employees in the United States prefer to work remotely, and they believe that organizational culture is likely to improve due to the new dynamic (Saad & Wigert, 2021).

Organizations have to adapt to the changes occasioned by the Covid-19 pandemic. In order to facilitate remote work, companies must invest in technology and redirect resources toward the provision of cloud-based services. In addition, the adoption of a flexible management strategy and the restructuring of organizational policies may be necessary. It is vital to increase remote access to organizational resources as a way of eliminating work-related complications. Finally, some employee contracts may have to be re-evaluated to account for remote work.

Remote work opportunities are immensely advantageous to organizations that must adapt to the evolving business environment. First, the practice allows employees to manage their time effectively. In addition, organizations have better access to talent, given that there are no geographical limitations. Organizations that facilitate remote work experience high rates of productivity in view of the fact that increased flexibility significantly bolsters employee output. Finally, organizations incur fewer organizational costs as a result of remote work. Each of these advantages is addressed in the subsequent slides.

There are numerous benefits associated with working remotely for the organization as well as its employees. For instance, employees spend less time commuting and are able to find the time to balance work and important personal responsibilities. In addition, the time spent at home improves their sense of self and overall well-being, which is vital for organizational success. Employees are also able to manage their time effectively, avoid tardiness due to factors such as traffic congestion, and dedicate more time to the completion of important tasks.

Companies now have the opportunity to access talent without the limitations imposed by geographical boundaries. The wide pool of potential candidates means that the company can have its pick of exceptional talent, which is essential for organizational success in a competitive business environment. Estimates indicate that three in ten employees are likely to seek alternative employment if remote work is abolished (Saad & Wigert, 2021). Remote work allows a company to predict its staffing needs effectively. In addition, employees are attracted to organizations that prioritize personal recognition and emphasize autonomy.

Remote work significantly improves employee productivity, given the fact that they can achieve decent levels of work-life balance. In addition, the reduced number of distractions associated with working from home increases their output (de Lucas et al., 2020). It is worth noting that employee morale improves significantly when individuals are allowed to accomplish tasks remotely. They seldom take sick leave days and are willing to work longer hours because of their convenient locations (Craft, 2020). The employees’ increased interest in taking up additional projects is beneficial to the organization.

Remote employees often experience less stress in view of the fact that they do not have to undergo a challenging commute to get to work. In addition, the ability to take frequent breaks improves efficiency, and personalized schedules increase overall output (Saad & Wigert, 2021). The freedom to plan for the completion of various tasks within a given time frame is integral for success. It is also worth noting that remote workers engage in healthy habits, and their limited exposure to office germs means they rarely fall ill, thus increasing the amount of time dedicated to working.

An organization’s efficiency is significantly impacted by the employee’s ability to accomplish different tasks at varied times. Increased flexibility is associated with better output in work environments (Craft, 2020). In addition, employees are able to complete their tasks at odd hours, which reduces the rate of absenteeism. Non-conventional work hours are desirable for employees facing various personal challenges. Companies have access to a higher number of potential candidates when they offer increased flexibility. The freedom associated with flexibility enhances employee engagement and improves their well-being because they can attend to important personal obligations while working.

Remote work reduces the costs associated with hiring office space for on-site staff. The increased retention rates associated with remote work mean that the company will reduce overall spending on hiring and training (Craft, 2020). The repurposing of office space to serve different functions saves money and reduces the cost of utilities. Reduced crowding in office spaces alleviates pressure on amenities and reduces maintenance costs. The migration to remote cloud-based operations is cost-effective for the company. The efficient use of office space as a result of increased reliance on remote work results in the judicious use of resources, which saves money for the company.

The COVID-19 pandemic significantly altered the business landscape, forcing organizations to adapt and address the new challenges. One of the ways institutions must adapt is through the facilitation of remote work, which has numerous benefits. For instance, the increased productivity associated with the practice is likely to improve the company’s bottom line. In addition, the ability to access talent from across the world gives the business a competitive edge over its competitors. Finally, happy employees are essential for success, given the fact that they are willing to put in more work and are likely to stay with the organization.

Craft, A. R. (2020). Remote work in library technical services: Connecting historical perspectives to realities of the developing COVID-19 Pandemic . Serials Review, 46 (3), 227–231. Web.

de Lucas, A. A., del Val Núñez, M. T., & Gavrila, S. G. (2020). Workplace change within the COVID-19 context: A grounded theory approach . Economic Research, 34 (1), 2297–2316. Web.

Saad, L., & Wigert, B. (2021). Remote work persisting and trending permanent . Gallup. Web.

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Here’s What We Do and Don’t Know About the Effects of Remote Work

Three years into a mass workplace experiment, we are beginning to understand more about how work from home is reshaping workers’ lives and the economy.

By Emma Goldberg

When workplaces are remade by a tectonic shift — women flooding into the work force, the rise of computing — it typically takes some time for economists, psychologists, sociologists and other scholars to gather data on its effects.

So when employers moved suddenly to adopt remote work during the pandemic, with the share of employed Americans working exclusively from home rising to 54 percent in 2020 from 4 percent in 2019, researchers leaped to examine the effects of remote work on employees and the economy at large. Now the early results are emerging. They reveal a mixed economic picture, in which many workers and businesses have made real gains under remote work arrangements, and many have also had to bear costs.

Broadly, the portrait that emerges is this: Brick-and-mortar businesses suffered in urban downtowns, as many people stopped commuting. Still, some kinds of businesses, like grocery stores, have been able to gain a foothold in the suburbs. At the same time, rents rose in affordable markets as remote and hybrid workers left expensive urban housing.

Working mothers have generally benefited from the flexibility of being able to work remotely — more of them were able to stay in the work force. But remote work also seems to bring some steep penalties when it comes to career advancement for women.

Studies of productivity in work-from-home arrangements are all over the map. Some papers have linked remote work with productivity declines of between 8 and 19 percent , while others find drops of 4 percent for individual workers; still other research has found productivity gains of 13 percent or even 24 percent .

Nick Bloom, an economist at Stanford and a prolific scholar on remote work, said the new set of studies showed that productivity differed among remote workplaces depending on an employer’s approach — how well trained managers are to support remote employees and whether those employees have opportunities for occasional meet-ups.

Researchers tend to agree that many workplaces have settled into a new hybrid phase, in which offices are at about half their prepandemic occupancy levels and about a quarter of American workdays are done from home. That suggests some of the effects of remote work may stick.

As Mr. Bloom put it: “This is the new normal.”

Urban Downtowns

Photos of urban downtowns in their Covid lockdowns are eerie, with silent streets, wilted office plants and dusty cubicles.

When some 50 million Americans started working from home in the early days of the pandemic, brick-and-mortar retailers clustered in urban downtowns were hurting. The number of downtown clothing stores fell 8 percent from late 2019 to late 2021, according to a study using transaction data from 70 million Chase Bank customers. General goods stores in downtowns — including anything from department stores to florists to booksellers — fell 7 percent, and grocery stores declined 2 percent.

Some of those businesses followed remote workers to the suburbs. During that period, the number of suburban grocery stores increased roughly 3 percent, slightly outpacing the urban decline , particularly in suburbs where remote work levels were high.

In the coming years, the movement of retailers from downtowns to suburbs is likely to prove difficult for low-income workers who cannot afford to live in these areas, some of them affluent, where retailers may be hiring.

This problem is already visible in the Bay Area. Take the case of Maria Cerros-Mercado , who used to work at a salad shop in San Francisco, a 20-minute walk from her home. Now she commutes by Uber to the shop’s new location in Mill Valley, a wealthy suburb in Marin County.

But some economists argue that many Americans stand to gain from the effects of remote work because rents in rural and suburban areas are likely to begin dropping. One recent study used data from postal address changes, rent changes on Zillow and the construction industry to project the potential rent effects of remote and hybrid work. The pandemic saw a temporary rent spike in previously affordable areas — think Dallas; Manchester, N.H.; and upstate New York — because many remote workers left the priciest housing markets once they gave up daily commutes. As construction catches up with that new demand, economists say, rents will fall back down.

“If you zoom out, one of the big problems in housing in the last 10 years has been affordability,” said Jack Liebersohn, an economist at the University of California, Irvine. “This could help simply because people can live in more affordable areas, where we can afford to build.”

And there could be an unexpected bonus: A study in Britain showed that burglaries declined nearly 30 percent in areas with high rates of working from home, which the researchers attributed to the increase of “eyes on the street” in those neighborhoods.

Working Women

For decades, a working mother’s schedule has felt like an equation that won’t balance. Many women are expected to still be at their desks at 5 p.m., and simultaneously at school pickup. They’re supposed to be in an office, and also available at home when their children are coughing and turned away from day care. (Ample data shows that this bind tends to constrict mothers more than fathers.)

Remote work slightly eases that conundrum, according to research using prepandemic data from economists at the University of Virginia and the University of Southern California. In fields like computer science, marketing and communications, which welcomed remote work from 2009 to 2019, working mothers’ employment rates increased. There was an almost one-to-one correlation: When remote work rose 2 percent, there was a 2 percent rise in mothers’ employment. Even so, the employment rates for working mothers lagged those of women without children, though remote work diminished that gap.

Claudia Goldin , who this week was awarded a Nobel Prize in economics, has shown that women tend to seek jobs with more flexibility so they can take care of household responsibilities. That has contributed to the gender pay gap.

While some working women, particularly mothers, may gain from being remote, women tend to see greater penalties when they do so. In a study of engineers at a Fortune 500 company, remote work had a negative effect on the amount of feedback junior employees got on their work — with the penalties more pronounced for women.

“Proximity has a bigger impact on women’s comfort with asking follow-up questions,” said Emma Harrington, an economist at the University of Virginia, who conducted both the study on remote work’s effect on feedback and the one on mothers’ work force participation.

Men appeared more comfortable asking clarifying questions even if they weren’t physically near colleagues.

Women may also face more undeserved questions about their productivity, wherever they work. In a series of studies with more than 2,000 participants, researchers in Wisconsin and Canada found that both men and women were more likely to suspect women than men of shirking work. Some of these employees worked from home, and some did not.

When study participants saw through video footage that a female employee wasn’t at her desk, this was attributed to something nonwork-related 47 percent of the time; for men, it was attributed to nonwork activities just 34 percent of the time.

“It’s possible that the study participants might be responding to the realities of the world in which women sometimes do bear more household responsibilities,” added Ms. Harrington, who wasn’t involved in this study.

Remote Productivity

Whether work-from-anywhere setups hurt productivity or help it has been a burning question for executives.

Early evidence came in a 2013 paper from Mr. Bloom and others about a call center in China that allowed some employees to be mostly remote for nine months; it found that productivity rose 13 percent. Just under 10 percent of this boost was attributed to people taking fewer breaks, and 4 percent to them doing more calls per minute because their working environments were quieter.

But during the pandemic, when millions of workers suddenly shifted to being remote, the effects were more complex. The arrangements hadn’t been figured out in advance. The move to remote work wasn’t voluntary. So the results were more scattered.

A study of an Asian information technology company’s remote employees during the pandemic showed a decline in productivity of 8 to 19 percent. Another, looking at an American call center, found that when workers went remote, they made 12 percent fewer calls. On the other hand, a study of the productivity of economic researchers in the United States during the pandemic found a roughly 24 percent increase in their output.

These disparate findings leave some questions unanswered. “How on earth can you get a more than 30 point spread between them?” Mr. Bloom asked. “It all comes down to how workers are managed. If you set up fully remote with good management and incentives, and people are meeting in person, it can work. What doesn’t seem to work is sending people home with no face time at all.”

Emma Goldberg is a business reporter covering workplace culture and the ways work is evolving in a time of social and technological change. More about Emma Goldberg

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The massive surge in the number of people working from home may be the largest change to the U.S. economy since World War II, says Stanford scholar Nicholas Bloom .

And the shift to working from home, catalyzed by the pandemic, is here to stay, with further growth expected in the long run through improvements in technology.

Looking at data going back to 1965, when less than 1% of people worked from home, the number of people working from home had been rising continuously up to the pandemic, doubling roughly every 15 years, said Bloom, the William D. Eberle Professor in Economics in the School of Humanities and Sciences and professor, by courtesy, at Stanford Graduate School of Business.

Before the pandemic, only around 5% of the typical U.S. workforce worked from home; at the pandemic’s onset, it skyrocketed to 61.5%. Currently, about 30% of employees work from home.

“In some ways, one of the biggest lasting legacies of the pandemic will be the shift to work from home,” said Bloom.

Bloom shared his research on working from home at the Stanford Distinguished Careers Institute ’s “The Future of Work” Winter 2023 Colloquium, which focused on how the ways we work are changing.

DCI Director Richard Saller moderated the event , which featured scholars from Stanford and beyond discussing working arrangements and attitudes, challenges to office real estate, learned lessons about the power of proximity, and more.

Below are seven takeaways from Bloom’s discussion:

• The employees. About 58% of people in the U.S. can’t work from home at all, and they are typically frontline workers with lower pay. Those who work entirely from home are primarily professionals, managers, and in higher-paying fields such as IT support, payroll, and call centers. The highest paid group includes the 30% of people working from home in a hybrid capacity, and these include professionals and managers.
• The move. Almost 1 million people left city centers like New York and San Francisco during the pandemic. Those who used to go to the office five days a week are now willing to commute farther because they are only in the office a couple days a week, and they want larger homes to accommodate needs such as a home office. This has changed property markets substantially with rents and home values in the suburbs surging, Bloom said. Home values in city centers have risen but not by much.
• The commute. Public transit journeys have plummeted and are currently down by a third compared to pre-pandemic levels. This sharp reduction is threatening the survival of mass transit, Bloom said. These are systems that have relatively fixed costs because the hardware and labor, which is largely unionized, are relatively hard to adjust. A lot of the revenues come from ticket sales, and these agencies are losing a lot of money.
• The office. Offices are changing, with cubicles becoming less popular and meeting rooms more desirable. As some companies incorporate an organized hybrid schedule in which everyone comes in on certain days, they are redesigning spaces to support more meetings, presentations, trainings, lunches, and social time.
• The startups. Startup rates are surging, up by 20% from pre-pandemic numbers. The reasons: working from home provides a cheaper way to start a new company by saving a lot on initial capital and rent. Also, people can more easily work on a startup on the side when their regular job offers the option to work from home.
• The downtime. The number of people playing golf mid-week has more than doubled since 2019. People used to go before or after work, or on the weekends, but now the mid-day, mid-week golf game is becoming more common. The same is probably true for things like gyms, tennis courts, retail hairdressers, ski resorts, and anything else that consumers used to pack into the weekends.
• The organization. More and more, firms are outsourcing or offshoring their information technology, human resources, and finance to access talent, save costs, and free up space. There has been a big increase in part-time employees, independent contractors, and outsourcing. “After seeing how well it worked with remote work at the beginning of the pandemic, companies may not see a need to have employees in the country,” Bloom said.

Interested in hearing more about the future of work? Stanford Continuing Studies will feature Bloom as he discusses “The Future of and Impact of Working from Home” on May 1 as part of the Stanford Monday University web seminar series .

Bloom is also co-director of the Productivity, Innovation, and Entrepreneurship program at the National Bureau of Economic Research, a fellow at the Centre for Economic Performance, and a senior fellow at the Stanford Institute for Economic Policy Research .