The View from the Street of the “Work from Home” Phenomenon
The “Wait and See” Economy
The “Work from Home” (WFH) model was partially created by the pandemic and is now well established in the publishing industry, but is it permanent? There is little consensus on that question, and the answer depends on who and where you ask. This article reviews the issues and where we go from here.
Where we are now
It seems that if you read ten articles on WFH, you will find five that say its days are numbered and five that say it is here to stay. The answer, to some extent, depends on the economy. We have an economy in flux, waiting for the other shoe to drop. It is a “wait and see” economy. Even within a region or a city, the outlook varies depending on which part of the city we look at. We are over Covid – at least we are over being concerned about it, but the effects linger on. And now, a new report from the Department of Labor finds that over 72% of business enterprises were working remotely “rarely or never “ in 2022, which was an increase of 12% over 2021. This is consistent with the views expressed by management at large companies like JP Morgan Chase, Meta, Starbucks, Apple, and others. They want and expect to see employees in the office more frequently in the future. However, there is a broad range of opinions, and it depends on who you ask.
Where we were
Prior to the pandemic, only 5% of the US workforce worked remotely, and by late spring 2020 this number had rocketed to over 60%, some of it due to local government regulations. Today, in April 2023, most analysts report that number at about 27% – still an enormous shift in a mere three years.
The Employee’s View
Prior to the pandemic, there were signs that the US workforce was suffering from stress and burnout, and the Great Resignation in the spring of 2021 reflected it. In that brief period, more than four million workers voluntarily resigned every month.
The benefits of WFH eventually became clear. Employees spent less time on commuting, less time getting ready for work and enjoyed a much more flexible schedule – think about childcare, for example. No wonder that workers are now reluctant to let it go.
On the other hand, employees say that they do miss the benefits of office work, including better collaboration with colleagues, better social life, and a better separation of work and home life. WFH was originally viewed as having a negative effect on career growth, but recent trends indicate that this is less of a problem now as the practice becomes more normalized across the country.
Overall, many workers insist, with good reason, that they are more productive at home, with fewer interruptions and less downtime compared to the office.
The Employer’s View
That is not the predominant view of many employers. They argue that essential activities like mentoring, onboarding, (and layoffs), training, company culture, and innovation all suffer in a WFH environment. Management acknowledges the benefits include easier retention of key employees, and the cost saving on office space – although that is difficult to realize in the short term. Saving money on office space, however, can hardly be viewed as a positive at city hall. If the WFH trend continues, employers will be able to recruit in regions with a lower cost of living, and by raising wages at a slower pace. That is going to have profound long-term effects on where workers choose to live.
The View from the Street
Companies in primary industries, such as agriculture, transportation, hospitality, and food services have not embraced WFH for obvious reasons. The technology and financial services industries have seen the reverse.
This has a regional effect. In Boston, where this writer lives, the economy is dominated by hi-tech and financial services and the WFH model is firmly locked in. In areas of the city occupied by commercial offices, the streets now appear deserted most workdays, whereas the high-end retail areas are busy. The losers here are the secondary and tertiary jobs that serviced what was formerly a bustling office scene. The coffee shops and small restaurants have gone, and even national chains such as Starbucks and Panera have closed retail spaces in these areas. The nationals will come back when the office workers return, but we will not see those same smaller stores again.
There are variables, of course, not least of which is the predominant age group of the local work force. Millennials, (born between ’82 and ’94) make up the largest section of the workforce in the cities and are strong proponents of WFH that are driving the shift. In those cities, you see the number of job postings for remote or hybrid work are all moving upwards.
Workers have enjoyed a good degree of bargaining power in this labor market, but that power will disappear if the economy does go into recession. In that scenario, jobs will be trimmed, and there will be much more pressure for workers to accept a hybrid arrangement with more time in the office.
Flexibility is desirable for all sides and a hybrid model is likely to persist long term. This means more worker choices regarding work schedules and hours, in addition to WFH. Workers are experiencing real benefits to their physical and emotional well-being and are going to be very reluctant to let those achievements go. That horse is out of the barn and businesses that push a return to the old ways of five days in the office may no longer be competitive.
There is no question that with more remote work, businesses will need to invest in well-supported, well secured, centralized information systems, which will also accelerate the move to cloud-based operations at many publishers. With the ability to recruit in regions with lower costs, we will see that smaller, less-expensive cities with attractive lifestyles will see an uptick in the population of professional and well-educated workers. And while we may never see the siesta as a staple of the American work life, we do seem to be experiencing a shift to a different balance between work and life choices. Much depends on which way the economy turns and for that, we wait and see.
Photo by Ian Harber on Unsplash
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