Will Remote Work Trend Change Dramatically, After Covid?

One of the biggest cautions in investing is to be wary of claims that “it is different this time” when an un-historic or atypical valuation trend happens in equity markets. A good example was the valuation of firms with no revenue in the leadup to the internet bubble around 2000. 

To extend the argument just a bit, we are going to be hearing all sorts of predictions that the Covid-19 pandemic is going to substantially or radically reshape business, government, education and consumer behavior on a permanent basis.

That is perhaps a different argument than saying some underlying trends might get a boost. More bandwidth, diversified supply chains,  more remote work capabilities, more use of collaboration tools, better security, network resilience, use of food or meal delivery services, online shopping and more work from home are examples. 

It is logical to suppose that, having become more acquainted with doing things a different way, there will be a lower threshold to maintaining some of those behaviors, post-pandemic. 

But we might maintain some skepticism about how much behavior will change on a permanent basis. Consider the obvious case of remote work. Some of us have heard about the obvious value of telework or remote work for our entire professional careers. 

And yet the percentage of U.S. employees working at home 50 percent of the time or more in 2020 is estimated at five million, representing 3.6 percent of the workforce, according to Global Workplace Analytics. And that is after 40 years of evangelization that some of us are personally aware of. 

Predictions about the extent of telecommuting have routinely been far in excess of those figures. Definitions are likely an issue. In the past, “telecommuting” has generally been thought of as employees working “at home” sometimes--or full time--instead of at the office, campus or plant. 

But some analysts might consider employees taking work home at the end of the day as “telecommuting.” That probably is not what most people have in mind when they think of remote work on a substantial basis. 

Others say remote work includes any employees routinely working at home one day a week. That is telecommuting, to be sure. But it might not be what many have in mind when they think of remote work: working from home 50 percent to 100 percent of the time. 

Another caveat is that those figures do not include the self-employed. 

Still, it is undeniable that remote work is growing. Regular work-at-home has grown 173 percent since 2005, 11 percent faster than the rest of the workforce, which grew 15 percent, according to  Global Workplace Analytics. 

Remote work also grew almost 47 times faster than the self-employed population, which increased by four percent. 

The point is that remote work trends--aside from people taking some work home from the office--have been in place for some time; were growing before the pandemic and will grow after the pandemic. 

So the relevant issue might be whether the rate of change increases in a non-linear way. At least some believe that will happen. "We believe the COVID-19 pandemic has accelerated society's transition to broadband and digitization by at least a decade,” say analysts at MKM Partners. 

But it is reasonable to expect that the gap between employee desire to work at home and the low percentage doing so has other explanations. 

Global Workplace Analytics argues that 56 percent of employees have a job where at least some of what they do could be done remotely; 62 percent of employees say they could work remotely and desks are vacant 50 percent to 60 percent of the time. At yet only 3.6 percent of employees presently do so. 

That suggests--as often is the case with new technology--that some major retooling of business processes or organizational culture or both are holding back much-higher rates of remote work. Only seven percent of U.S. firms make remote work available to most or all of their employees, Global Workplace Analytics says. 

In makes sense that remote work happens most often when there are clear benefits for employers or employees, when the work tasks are amenable to remote work and when the relative isolation fits the emotional needs of the workers. 

Sales, customer service,marketing, programming, health claims analysis and radiology are use cases where remote work is possible. Not all roles are that amenable.  

But one also has to keep in mind that what most would consider routine “remote work,” happening 50 percent to 100 percent of the time, remains relatively rare. With the caveat that rates of change can hit inflection points, and that the pandemic might trigger an inflection point, remote work is not a technology issue. 

Work processes and work cultures apparently have to change in significant ways before substantial remote work makes sense, and works. 

Beyond that, the assumption that remote work always improves productivity is questionable. The productivity paradox (also the Solow computer paradox) is the counterintuitive observation that, as more investment is made in information technology, worker productivity may go down instead of up. 

The existence of the productivity paradox has been noted since the 1970s. Before investment in information technology became widespread, the expected return on investment in terms of productivity was three percent to four percent.

Instead, we have tended to see improvements that are undetectable to perhaps one percent, in the 1970s to 1990s. Nor is there much evidence that matters in the United States, for example, have changed between 2000 and 2018, either. 

source: Conference Board

Likewise, in the 20th century, gross domestic product growth was mainly driven by total factor productivity growth. Since the mid-2000s, however, productivity growth has been in decline, according to one analysis by researchers working with the Centre for Economic Policy Research. 

source: CEPR

None of that means a dramatic change in remote work is impossible. But it does seem unlikely.

Work-From-Home at a Massive Level Might Reduce Productivity, Early Evidence Suggests

The massive shift to work-at-home caused by policies related to the Covid-19 pandemic have inadvertently provided a remote-work statistical base we will be analyzing for years, especially regarding the productivity impact of massive work-from-home changes. 

Most past studies of work-at-home productivity arguably involved smaller sets of workers in functions that arguably are best suited to remote work (sales, coding, marketing, accounting, legal work and so forth). 

What the global pandemic stay-at-home orders have done is push the bulk of enterprise workforces to either work at home or not work. The early data from the change is not encouraging for productivity impact, suggesting that the tools we have are not so much the problem as human ability to adjust to remote work environments and use the tools fully. 

If it is the case that only a third of jobs can be done remotely, forcing everyone to do so will not be universally productive. say professors  Jonathan Dingel and Brent Neiman of the University of Chicago Booth School of Business, who conducted a recent study on the subject.

The study suggests 34 percent of U.S. jobs can plausibly be performed at home. Assuming all occupations involve the same hours of work, these jobs account for 44 percent of all wages. The converse is that 66 percent of jobs cannot plausibly be shifted to “at home” mode. 

As you might guess, some jobs and some areas are more amenable to remote work. The top five U.S. metro areas feature many jobs in government or technology that could be done from home. On the other hand, some areas involve manufacturing, agriculture, raw materials extraction of other major industries that are not amenable to remote work. 

source: Dingel and Neiman

“More than 40 percent of jobs in San Francisco, San Jose, and Washington, DC could be performed at home, whereas this is the case for fewer than 30 percent of jobs in Fort Myers, Grand Rapids, or Las Vegas,” they say. 

Professional, scientific and technical services, management jobs, education, finance, insurance and information jobs are easiest to shift to remote work. Transportation, warehouse operations, construction, retail, agriculture, food services and lodging are among the hardest to shift to remote work. 

The new conventional wisdom is that more remote work is coming, as a permanent change after all the stay-at-home rules put into place to deal with the Covid-19 pandemic. But there is some debate about whether remote work is less productive or not. And if remote work turns out to be less productive or more productive than face-to-face work, there will be consequences for its extension and use. 

Looking only at the impact of the massive stay-at-home orders to counter the Covid-19 pandemic, there is at least some evidence that productivity has suffered, in some countries, because of remote work from home. 

Aternity, for example,  has aggregated from millions of employee devices from over 500 Global 2000 companies, reveals that the United States has become less productive due to remote work because of the pandemic. The metric is hours of work, captured because Aternity hosts a cloud-based analytics application that captures work-related application usage. 

At the end of March, 77 percent of work has been moved to be performed remotely in North America, the largest amount of any continent. The North America trends were bifurcated. U.S. enterprise worker productivity actually dropped 7.2 percent, Aternity reports, though Canadian productivity increased about 23 percent. 

“Overall productivity (as measured by hours of work computing time) in Europe declined by 8.2 percent,” according to Aternity. 

source: Aternity

Another study of worker attitudes suggests that about half of workers 18 to 24 believe their productivity is lower when working from home, according to a study by National Research Group. Half also believe they are distracted at home. That does not necessarily mean productivity is lower, but the workers feel their productivity is lower. 

Some believe remote work, in some cases, is wildly less productive. A study by Scikey MindMatch that estimates only 0.2 percent of the Indian IT workforce actually is capable of working from home at high levels of productivity.

That finding might run counter to what many observers would expect for remote work productivity, but Scikey describes itself as a firm supporting firm efforts to attract personnel that drive “high-performing teams.” 

Since talent, skills, intelligence and ability to perform work at a high level remotely  are bell-shaped curves (a normal distribution), people who might be described as “high performing” would be expected to be a minority of all workers. 

The Scikey study seems to be operating out at three standard deviations, which would represent 0.3 percent of people. 

source: Researchgate

Reports about the study indicate that  99.8 percent of the workforce in the information technology sector is incapable of working from home, at least with very-high productivity arguably matching what happens at the workplace, the study claims. 

The reason so many are “incapable” of working from home is that they lack at least one quality deemed essential for success, including resistance to learning and exploring (95 percent), lack in practical communication skills (65 percent) and lack in planning and execution (71 percent).

Some 17 percent of the employees are instruction-driven and therefore they need clear and direct instructions to work their best. about 12.7 percent of the employees are very much dependent on their social interactions, and working from home comes as a real challenge for them. Work is not difficult for them, but social interactions are necessary for them to function, Scikey suggests. 

What the study likely indicates is simply that the human characteristics Mind Match associates with the highest-performing individuals in a remote work setting are three standards deviations from the mean. 

You can make your own assessment of whether that is a functionally valid test of worker suitability for remote work. 

Extrapolating Remote Work Trends from Immediate Circumstances is Likely Not Wise

Some of us have been hearing predictions about the growth of remote work (it used to be called telecommuting) for four decades or so. And while there have been secular changes, it is difficult to make a case that anything really has changed the adoption curve of full remote work, even if lots of people take some work home from the office, routinely. The underlying trends are what they are, and might get something of a boost, but that might be hard to detect.

A Gartner survey of 229 human resources leaders finds execs now believe more remote work will be done by their employees, post pandemic. “While 30 percent of employees surveyed worked remotely at least part of the time before the pandemic, Gartner analysis reveals that post-pandemic, 41 percent of employees are likely to work remotely at least some of the time,” said Brian Kropp, Gartner HR practice chief of research. 

What all that means is not yet clear, as the definitions of remote work vary widely. Some of us might consider remote work to be “employees who are based full time at remote or home locations.” 

Others might include employees who work remotely at least half the time. That is a very small number of people, at the moment, perhaps as few as 3.6 percent of the entire workforce, by some estimates. 

The number of U.S. employees working at home 50 percent of the time or more in 2020 is estimated at five million, representing 3.6 percent of the workforce, according to Global Workplace Analytics. And that is after 40 years of evangelization that some of us are personally aware of. 

But most people likely take a broader view of remote work, including some work from home days each week or month. 

In the past, “telecommuting” has generally been thought of as employees working “at home” sometimes--or full time--instead of at the office, campus or plant. That sort of thing might not differ much from workers occasionally or even routinely bringing some work home from the office. 

One way of setting a reasonable universe of potential remote work is to evaluate the total number of jobs that conceivably could be done entirely remotely. By some estimates, only a third of jobs can be done remotely, according to a study conducted by professors Jonathan Dingel and Brent Neiman of the University of Chicago Booth School of Business. 

The study suggests 34 percent of U.S. jobs can plausibly be performed at home. Assuming all occupations involve the same hours of work, these jobs account for 44 percent of all wages. The converse is that 66 percent of jobs cannot plausibly be shifted to “at home” mode. 

If we assume that most people will consider “working from home” sometimes as a valid case of remote work, the universe of jobs appears to be close to 34 percent, looking at jobs that can be completely remote, full time. Using less stringent definitions would produce a higher number, but the value of such estimates might be questionable. 

It is not clear that the actual requirements of remote work, done on a casual or occasional basis, actually include much more than having a smartphone, a PC and adequate internet access at home, plus the standard cloud computing apps typically used in an office. 

More specific computing tasks, requiring sophisticated equipment (robots or industrial or process machinery) are not the sort to be done at home on a casual basis. 

To be sure, some executives will look to reduce spending on office facilities by shifting some work to full remote status, while allowing others to work substantially from home. But technology is not the only issue. Managers must trust that worker productivity remains substantially the same when work moves remotely. 

But recall that similar predictions were made in 2009 when the HiN1 virus outbreak happened. It is by no means clear that some non-linear acceleration of remote work trends happened after that, and was sustainable. 

Nobody Knows if "Return to Office" Boosts Productivity

As a test, this content as a podcast here

It is virtually impossible to test human-driven processes in the same way a scientist might test hypotheses, despite our use of the term social “science,” but none of that inability to truly test cause and effect relationships alleviates the need to make decisions in a void. 

Consider the current debate over “return to office” policies, often touted because “in office” work builds company culture. Ignore for the moment our inability to measure “company culture.” Ignore the possible impact on productivity of office or knowledge workers (since we cannot really measure that, either. 

Researchers do not agree on whether the thesis that “in office” work creates or sustains company culture, even if it might affect other elements of “culture” such as collaboration, job satisfaction, innovation or employee assessment, training and advancement. 

Study Title	Date	Publisher	Key Conclusions
The Surprising Truth About InPerson Work	2024	Robin Powered	Inperson work boosts collaboration, job satisfaction, and innovation. Physical proximity increases knowledge sharing and motivation.
'Office culture' as we know it is dead. Workers have other ideas	2024	BBC	Employees are less interested in pre-pandemic office perks and culture. They prioritize flexibility, equitable pay, and being seen as whole humans.
Why a full return to office is gaining ground	2024	HRD Connect	In-office work enhances company culture through informal interactions and facilitates mentorship. However, employee preferences for flexibility must be considered.
Working in the office 5 days a week to build company culture is a myth	2024	Fortune	Hybrid workers report higher levels of satisfaction, engagement, and feelings of belonging compared to full time in-office workers. Forced return to office can negatively impact culture.
Workforce Radar Report	2024	PwC	Hybrid workers demonstrate the highest levels of satisfaction and engagement. The idea that fulltime in-office work is necessary for strong culture is a myth.
"The Impact of Physical Workspaces on Organizational Culture"	2023	Harvard Business Review	In-office work fosters a stronger sense of community, improves collaboration, and enhances knowledge sharing among employees.
"The Role of InPerson Interactions in Building Company Culture"	2022	Stanford Graduate School of Business	Face-to-face interactions are crucial for building trust, fostering a sense of belonging, and creating a shared company identity.
"The Negative Effects of Remote Work on Company Culture"	2021	MIT Sloan Management Review	Remote work can lead to decreased employee engagement, reduced informal communication, and a weaker sense of organizational connection.
"The Benefits of Hybrid Work Arrangements for Company Culture"	2020	McKinsey & Company	A hybrid work model can balance the advantages of in-office work with the flexibility of remote work, promoting a positive company culture.
"The Impact of Office Design on Employee Productivity and Wellbeing"	2019	Cornell University	A well-designed office environment can enhance employee satisfaction, productivity, and overall well being, contributing to a positive company culture.

Without much doubt, most employees prefer remote work when it is available. What is less clear is whether “return to office” mandates enable firms to function at a higher level of output or quality (assuming the work is amenable to remote venues and assuming you believe you can measure such effects. 

In some cases, studies suggest in-person work does improve productivity, to the extent that collaboration or knowledge sharing matters, and assuming such outcomes differ from remote instances in a material way. 

In other cases, outcomes likely hinge on the actual job functions. Writers, code developers, artists, marketing or advertising functions and many sales functions traditionally have used lots of remote workers, as the work is suited to remote basing. 

Study Title	Date	Publisher	Key Conclusions
The Science behind InPerson Productivity at the Office	2024	Robin Powered	Physical proximity boosts collaboration and knowledge sharing. Employees within 25 feet of high-performing colleagues saw a 15% productivity improvement.
Study finds hybrid work benefits companies and employees	2024	Stanford University	Hybrid work (2 days remote had no negative effect on productivity or career advancement. It reduced employee turnover by 33%.
Americans are embracing flexible work—and they want more of it	2024	McKinsey & Company	Well-organized hybrid work can improve productivity by up to 5%. 83% of employees cite increased efficiency as a primary benefit of remote work.
Study finds workers say they need to be in an office to be productive	2024	Scripps News	Workers report needing to be in the office for twothirds of the workweek to be productive. Top reasons include better focus and accessing technology.
The Surprising Truth About InPerson Work	2024	Robin Powered	In-person collaboration improves task completion by 50% compared to solo work. Face-to-face interactions are more impactful than virtual ones.

Perhaps the actual impact on productivity is not really the issue. If managers believe they are better off with employees in the office (for whatever reasons, that might be all that matters. Irrespective of the matter of productivity, which cannot be measured anyhow, if managers believe they benefit from “in office” work modes, that is likely to happen. 

Still, some jobs traditionally have been highly amenable to remote work. 

Job	Reasons for Remote Work Suitability
Software Developer	Work primarily involves coding and digital tools  Collaboration possible through version control systems  Can easily share and review code remotely
Graphic Designer	Digital design tools accessible from anywhere  Can share and collaborate on designs online  Client meetings can be conducted virtually
Writer/Editor	Writing and editing can be done independently  Digital collaboration tools for feedback and revisions  Research can be conducted online
Data Analyst	Data analysis software accessible remotely  Can access databases and datasets from anywhere  Results easily shareable through cloud platforms
Customer Service Representative	Phone and chat support can be done from home  Customer management systems accessible remotely  Call routing technology allows for distributed teams
Digital Marketer	Online marketing tools and platforms accessible anywhere  Analytics and reporting can be done remotely  Virtual collaboration for campaign planning
Translator	Translation work can be done independently  Digital resources and translation tools available online  Can communicate with clients virtually
Accountant	Accounting software accessible from anywhere  Digital document sharing for financial records  Virtual meetings for client consultations
Project Manager	Project management tools allow for remote team coordination  Virtual meetings for team updates and planning  Can track progress and deadlines online
Online Teacher/Tutor	Virtual classrooms and learning management systems  Can conduct lessons via video conferencing  Digital resources for curriculum and assignments
Remote Sales	Outside sales staff often are based wherever key clients are Inside sales can be based anywhere

According to one 2022 survey (which might still show the impact of Covid work-from-home policies, many industries were seeing high growth of remote work. 

Finance and Insurance   2,062%

Legal and Accounting   1,995%

Retail   1,651%

Aerospace   1,341%

Media   1,280%

Real Estate, Construction   1,150%

Information Technology     1,132%

Education, Govt., Non-profit     1,097%

Consumer Technology             1,028%

Consumer Goods   1,651%

Hospitals,Medical Centers       1,028%

Healthcare       859%

Telecommunications     1,020%

Energy and Utilities                      897%

Technical Services                      878%

Enterprise Technology                 701%

Manufacturing       869%

Food and Beverage         719%

Hospitality and Recreation           644%

Transportation         634%

Business Services         550%

Staffing         475%

Pharmaceuticals         248%

source: The Muse, Ladders 

And though large enterprises are shifting back to “in office” work, remote work job openings might still be increasing in 2024, compared to 2023. The number of “remote” job postings peaked in 2022, as Covid pandemic restrictions prohibited much in-office work.  

source: Bloomberry

All that noted, remote work is both an employee preference issue and a management comfort issue, at least for jobs that can plausibly be done on a remote basis.