The New Employment Paradigm: Understanding the Present and Future of Remote Work
The global workplace has changed quite dramatically this year. At the beginning of 2020, in-office work was the indisputable norm. Remote work was a growing trend with lots of promise, but little more. Today, remote working is a way of life for a vast number of employees worldwide. In-office work, face-to-face interaction, the traditional workplace environment – these seem to be endangered species.
Remote work is vital, lifesaving, even. Without it, perhaps millions more would have been infected, and tens or hundreds of thousands of individuals would have died, with millions of others suffering dramatic, long-term repercussions of COVID-19. The rapid shift to working from home spared us that, but it has ushered in an uncertain present and future.
The loss of social norms, peer-to-peer interaction, and the “always-on” nature of working remotely make it difficult to understand the real effects of this shift. They have been quite profound and wide-ranging, covering everything from socioeconomics to real estate trends.
As of June 2020, up to 42% of the US workforce was employed remotely – working from a location other than a company-owned facility, according to Stanford University. Consider that in 2019, this figure stood at roughly 16% according to the U.S. Bureau of Labor Statistics. This explosive growth in remote work has several obvious impacts:
- Reduced road traffic, leading to less wear and tear on surface streets and highways, but also fewer customers to businesses along those commute routes.
- Reduced vehicle-based emissions, but also a reduction in sales for gas stations and convenience stores, with the knock-on effect of reducing sales for snack and sundry manufacturers.
- Reduced power consumption within business facilities, but increased demand for electricity within residential homes, which can be particularly problematic in states like California, where intense electricity usage (primarily from air-conditioning units) leads to rolling blackouts.
It’s clear that the effects of this shift to remote work are far-reaching and complex.
The Impact on Workers
While there has been significant economic upheaval for employers, individual employees have had to make dramatic adaptations to their lives to continue working, caring for their families, and meeting their own social and emotional needs during the pandemic.
Not Everyone Can Work from Home
It must be acknowledged that while many people are working from home, not all employees can. So-called “essential” workers in retail, healthcare, transportation, and business services must still report to work. The fear and anxiety from increased exposure to the novel coronavirus, coupled with an outpouring of gratitude from the public and employers but little substantive change in their financial situation can lead inexorably to frustration, even anger.
Even amongst those who can work from home, the ability to do so is not equitable. For instance, only a select few workers enjoy an at-home work efficiency of 80% or higher. The rest of at-home workers struggle to make do. This is largely the result of disparities in electronics (PCs, laptops, smartphones, etc.), as well as in Internet connection speeds. A significant portion of the American population lacks Internet speeds suitable for video calls. Family demands are also a significant consideration, particularly the availability of childcare for working parents.
The Impact on Businesses
Employers have seen immense impacts from the shift toward remote working. The immediate impact was an increase in costs coupled with a decrease in earnings. However, as the pandemic has continued, those trends have flattened. It is impossible to discuss the impact of remote work across all industries and business sizes, but it is possible to highlight some interesting trends:
- Many businesses are seeing cost reductions in their utility costs due to reduced or no on-site workforce.
- Many business owners and decision-makers are considering the possibility of reducing the size of their corporate headquarters/primary location or eliminating the traditional workplace entirely.
- Some companies are considering relocating their headquarters outside of major metro areas, following the shift in real estate and other segments of the economy.
- Many organizations are considering a shift toward a hybrid work format, with employees working from home at times and from the office at others.
- Many companies are planning to trim their overall footprint by a significant amount. For instance, consider Shopify’s statement that the company would reimagine its offices “to reflect a digital-by-default mindset”.
How Employment as a Whole Will Be Affected Moving Forward
While essential workers will likely see little change, other than perhaps additional pay for their increased risks, non-essential workers may see significant changes in the future. The pandemic has virtually erased the lingering stigma around remote work, showing without a doubt that it is possible. More and more employees will find that their jobs shift to the aforementioned hybrid model at best, with numerous workers remaining remote full-time.
Another interesting and difficult-to-predict outcome is the possible redistribution of jobs, particularly in the technology sector. This shift ties in directly with the exodus of workers from urban areas and into the surrounding suburbs and smaller cities. This is not, however, due to a relocation of employers. Rather, it is directly related to the remote work scenario.
Most employees commute to the office from a suburb. Few people live within a short distance of their place of employment. They reside in the suburbs, as far from urban sprawl as they can comfortably get while still being able to reach their workplace with a minimum of hassle, and take advantage of modern conveniences, such as shopping, high-speed Internet connectivity, and other parts of modern life that many of us take for granted, which are not available in more rural areas.
As more and more people are working from home, spending is increasingly moving outside the largest US metro areas. For instance, Upwork reported that 72% of earnings went to people outside of the nation’s 15 largest urban areas. While there is no conclusive evidence of the pandemic’s effects in this area at the time of this writing, it is expected to spread economic activity further across the nation, breaking financial silos in major urban areas and giving smaller cities and suburban areas a much-needed financial lift.
The Future of Work Is Remote
Remote work is the future for a sizeable portion of the US labor force. No, it will not be the rule for everyone, but it will become more and more widespread, to the point that it is commonplace even when social distancing is no longer necessary to prevent the spread of SARS-CoV2.
As evidence, consider an April 2020 Gartner poll that showed 74% of CFOs intended to keep a measurable percentage of workers remote even when there was no longer a pandemic-related need to do so. However, that does not mean that all companies will follow this trend, nor that those that do will mandate remote work without taking a worker’s preferences and needs into account.
A growing trend before the pandemic was the personalization and customization of employment. This was done in an attempt to attract and retain top talent, reduce churn-related costs and upheaval, and improve a company’s ability to compete. It is also connected with the growing desire for individualization across the workforce. This trend will likely resurge once the pandemic’s grip loosens, with employers offering workers the choice of how they would like to operate, whether that’s from home, from the office, or some degree of hybridization.
Shaped by Technology
Finally, we cannot discuss the future of remote work without acknowledging the technology companies that benefit from this change. Consider the rapid adoption of video calls in industries as widespread as healthcare and finance, not to mention education. Video conference provider Zoom boasted a record profit thanks to pandemic shutdowns, reporting more profit in May-July, 2020 than in all of 2019. And, as Elizabeth Lopatto reports for the Verge, “Amazon…was buoyed by the video chat client Zoom, since its cloud services division AWS hosts a chunk of Zoom.”
Clearly, the impacts of the pandemic and the necessity of remote work on the economy will be far-reaching, reshaping how, when, and with whom we work in ways that we are just beginning to understand.