Companies' Post-COVID Dilemma: Will the Rise of Remote Work Become a Permanent Pandemic Legacy?

When COVID-19 suddenly forced millions of Americans to work from home (WFH), employees and employers alike feared confusion, dislocation, and lost productivity. Instead, remote work proved to be one of the rare pandemic experiments that nearly all agree has gone better than expected. A year on, as vaccines finally put a return to the office within sight, companies are rushing to decide where WFH fits as a permanent part of their post pandemic strategy.

​It's a decision with immense ramifications, argues a new report from The Conference Board.

COVID-19's Biggest Legacy: Remote Work and Its Implications for the Postpandemic Labor Market in the US confirms the sea change in thinking that has taken place over the past year. Before the pandemic, roughly 8% of workers with office jobs worked primarily from home. Conventional wisdom in most industries still held that workers would be less productive outside the office. Those fears failed to materialize, even as WFH rates soared. Companies, meanwhile, saw the long-term promise of remote work—from reduced spending on office space to massively expanding the talent pool available to hire from. But extrapolating these lessons to a postpandemic world requires caution.
"Remote work worked in 2020, with workers and employers reporting increased productivity on recent surveys," said Gad Levanon, Vice President, Labor Markets at The Conference Board. "But 2020 was also a year like no other, full of stressors likely to drive employees to work harder and longer. Whether remote work can be as effective in normal economic conditions remains to be seen. Leaders need to be armed with trusted in-house performance analytics—and a clear-eyed view on collaboration and culture—as they seek the optimal balance of remote work in the months and years ahead."
"Beyond its impact on individual organizations, the rise of remote work has the potential to transform the US economy and society as a whole," said Dana Peterson, Chief Economist of The Conference Board. "If WFH trends hold, millions of workers may relocate over the next decade in search of lower living expenses and higher quality of life. As employees disperse beyond commuter zones, companies may find it increasingly difficult to reverse a decision to embrace remote work."
Among the report's key findings:
The pandemic rapidly transformed employers' attitudes toward remote work. Survey data and hiring trends point to much of this change becoming permanent:

• More than 1 out of 3 HR leaders surveyed in September expect 40% or more of their workforce to be primarily remote after the pandemic subsides—compared to just 1 in 20 before COVID-19.
• Occupations that had already been trending toward remote work before the pandemic are among the least likely to return to the office. These include computer and mathematical (68% WFH due to the COVID-19, as of January 2021), legal (58%), and business and financial operations (54%).
• Online job listings reveal how fully remote work is woven into the fabric of labor markets in key fields. A February 2021 analysis found 10.8% of ads for actuaries and 8% for software developers now mention WFH—up from less than 2% a year ago.
• Employers are looking farther afield for talent, giving them access to a much larger candidate pool and potentially lower labor costs. Among HR leaders surveyed in September 2020:
  • 10% would hire fully remote staff based anywhere in the world, up from 5% prepandemic
  • 26% would hire fully remote staff based anywhere in the US, up from 7%
  • 51% would hire remote staff who can occasionally commute to the office, up from 40%
  • 12% would not hire any remote staff, down from 48% before the pandemic.

Remote work is highly stratified by race, age, and gender. Within organizations and across the economy, the ability to work from home risks becoming a fault line that leaves many behind:

• Relatively few industrial and manual services occupations can be done at home. Demographic groups concentrated in these jobs are thus least likely to work remotely during the pandemic.
• In January 2021, college graduates were over 4 times more likely—and advanced degree holders were 6 times more likely—than high-school graduates to be working from home.
• Asian workers, who are heavily represented in computer fields, are the racial group most likely to have shifted to remote work. WHF is least prevalent among Black and Hispanic workers.
• Older workers (55+) are less likely than their younger counterparts to be remote, despite elevated risk of serious COVID-19 complications.
• Women are working from home at higher rates than men—even after accounting for other factors like race, age, education, and occupation. This reflects the outsized role women continue to play in childcare, especially at a time when many schools are closed.
  • Hybrid models that combine remote and onsite work give employees the flexibility to choose what works best for them but may also inadvertently exacerbate gender inequities in the workplace. Organizations considering postpandemic hybrid options must take care to ensure women who choose to work from home are not, consciously or unconsciously, penalized in career advancement versus men able to put in "facetime" in the office.   

The share of workers working remotely due to the pandemic has been highest on the West Coast and in the Northeast.

• Pandemic-era policy differences may survive as long-term geographic disparities. Workers and companies in states that adopted more restrictive social-distancing policies were forced to go remote most extensively during the crisis—and are best placed to continue when it ends.
• All else being equal, Americans are more likely to have shifted to WHF due to COVID-19 if they live in large metro areas and/or areas with high usage of public transportation.

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