Is working from home (WFH) falling, signaling that workers have to go back to the office? Or is WFH now a permanent part of future work, jobs, and careers? Well, actually both. But the future, even with higher permanent levels of WFH, remains unsettled for workers and employers.
Where WFH fits into your future depends on your industry, occupation, and the overall labor market. Thereโs a lot of turmoil as employers and workers experiment and figure it out, but WFH has become a much larger part of the labor market than many analysts (including me) thought it would.
Recent data on declines in working from home could reflect, as a recent Bloomberg story put it, that โthe push by employers to get American workers back into the office appears to be working.โ
The Bloomberg story uses the Census Bureauโs Household Pulse Survey. When the pandemic hit in 2021, the economy and employment cratered. We lost almost 22 million jobs in two months, an unprecedented shock in the postwar period of over 14% of total employment. Scrambling for real time data to guide businesses, workers, and government, the Pulse Survey surveys tens of thousands of households.
The most recent results show โfewer than 26% of US households still have someone working remotely at least one day a week,โ which Bloomberg notes is โa sharp decline from the early 2021 peak of 37%,โ representing โa post-pandemic low.โ They attribute the drop to โthe continued push by many employers to get staff to return to offices.โ
So, case closed? Falling WFH rates, driven by employer demands, mean more and more workers have office work in their future?
Not so fast. Other analysts, like Stanfordโs Nick Bloom, one of the top researchers on WFH, say it is โhere to stay.โ Bloom says the data show not a continuing drop in WFH, but rather โthat returning to the office (R.T.O.) is D.O.A.โ
Bloom points to office occupancy rates, measured (imperfectly) by keycard swipes collected in Kastle Systems โBack to Work Barometer.โ Kastle averages swipes across ten major U.S. metro areas, and their most recent number shows 50.3% average office occupancy, compared to over 95% prior to the pandemic.
50.3% is much higher than the pandemic low point of around 15% right after COVID-19 hit and torpedoed employment. But occupancy still hasnโt come anywhere close to pre-pandemic highs, and return rates have slowed significantly. Kastleโs occupancy barometer one year ago was at 47.9%, compared to 50.3% currently.
Bloom also has survey data supporting his claim that the โreturn to the office has stalled out.โ His analysis shows โby December 2022, 29 percent of workdays were happening from homeโ but by July of this year โwe are back up at 31 percent.โ This compares to estimates of around 5% to 7% of workdays at home prior to the pandemic.
All of these data are best viewed for showing trends, not narrowly precise estimates documenting slight shifts. If the data continue to show falling WFH rates, then there may be something going on with workers returning to offices. But if trends remain flat or only slightly decline, as they are now, then Bloom has the better of the argument.
The rise of working from home is startling. Prior to the pandemic, if you had predicted a jump in working from home that would stabilize around 25% to 30% of workdays, almost all labor economists would have been very, very skeptical.
In addition to being a first -rate analyst, Bloom is a cheerleader for working from home. He says โremote work has been good for almost everyone involvedโ and hopes we will โlay the five-day-office-week movement to rest.โ
In contrast, the Wharton Schoolโs Peter Cappelli sees not a win-win but an โunderlying conflictโ around WFHโemployees want to work from home, but employers donโt want them to. (Last year, Cappelli sardonically called working from home โthe gift that keeps on givingโ for columnists, because โwe donโt really know whatโs going on.โ)
Work can be cooperative, but thereโs also a lot of conflict between workers and employers. As Cappelli notes โemployees donโt get something simply because they want it, they donโt all want the same thing and whether remote work is better or worse for the employer is simply not clear.โ
Thereโs still a lot to sort out. Not all employers have embraced WFH, even ones in the same industries. New companies and firms with large tech components seem to use it more than others, and those patterns could spread.
Although weโre seeing higher and probably more stable levels of working from home, there are many unresolved issuesโproductivity, innovation, career pathways, gender differences, onboarding of new employees, and new forms of managerial surveillance and oversight. All of this will generate new forms of conflict if working from home stabilizes as a significant part of the labor market.
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