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The Biggest Legacy Of Covid-19


The biggest impact of Covid-19 may be remote work. Pre-pandemic, roughly five percent of full-time employees with office jobs worked primarily from home. That figure is likely to settle at 20-30 percent in the new normal, with variation across occupations and industries. Location will become less important in hiring. More white-collar workers will live farther from city centers, in different parts of the U.S. and even outside the country, accelerating and changing geographic trends.

A large, permanent increase in remote work

An increasing number of employers expect remote work to become the new normal. Remote work does not seem to hurt productivity, and there is a growing realization that reversing remote work practices after a year or more would be difficult.

The Conference Board conducted two surveys among U.S. HR executives in April and in September. Just five percent of respondents reported that, prior to the pandemic, 40 percent or more of their employees were working primarily from home (at least 3 days per week). But by April, nearly 20 percent of respondents said they expected 40 percent or more of their employees to work primarily from home after the pandemic. By September, that number had risen to over a third of responding companies.

Results are even stronger for organizations with primarily professional and office workers. Almost half believe that, a year after the pandemic subsides, at least 40 percent of their employees will work from home three or more days per week.

Which jobs are likely to experience bigger increases in remote working?

In most office jobs, working from home has been a rapidly growing option for about 15 years. Pre-pandemic, most acceleration in the work-from-home trend occurred in high-skilled white-collar occupations; rates among office and administrative workers were substantially lower. The pandemic, however, has seen administrative remote work climbing as well.

The fastest growth in remote work has been in computer-related occupations, with business, financial, and management occupations also experiencing rapid growth in teleworking. Remote work is generally not an option for most blue-collar and manual services jobs and health, education, and retail sales jobs.

Online job ads provide another hint about the remote trend. Job ads data from The Conference Board® Burning Glass® Help Wanted OnLine™ series indicate a large increase in the share of office jobs ads that allow remote work. Chart 3 shows this by selected occupation groups for two periods: the eight weeks ending on February 29th (pre-pandemic) and the eight weeks ending in mid-October. Again, the increase was most noticeable in computer occupations. The chart also shows that some clerical and office support jobs not requiring a bachelor’s degree have experienced a large increase in remote status.

Prior to the pandemic, clerical/admin office workers were less likely to work from home for several reasons. First, many were hourly/non-exempt workers (eligible for overtime pay), which creates complications in a remote work environment. Two, employers were required to regularly document their hours worked each day and total overtime earnings—hard to do for remote work. Third, many workers lacked the space and equipment to easily shift work home.

These issues created significant barriers—barriers that were removed when pandemic lockdowns forced companies to address them. This may signal a massive shift to remote work for these jobs.

Hiring of remote workers outside commuting zones

Perhaps the biggest impact of the accelerated shift to remote work is the growing willingness of employers to hire workers outside office commuting zones.

According to The Conference Board September 2020 survey, before the pandemic, only 12 percent of surveyed U.S. organizations were willing to hire 100 percent virtual workers anywhere in the U.S. or internationally. In comparison, by September 2020, 36 percent were willing: a threefold increase. The share was even higher for predominantly white-collar employers (Chart 4).

Now that many organizations have concluded that remote work works, they realize they can potentially increase their talent pool and lower labor costs by hiring from less expensive markets. This new willingness to hire remote workers could foretell a trend of shifting professional and office jobs to less expensive geographies, as well as a wave of offshoring jobs.

The geographical implications of a permanent increase in remote work

Prior to the pandemic, many Americans, especially parents in large metro areas, found it impossible to have an adequately sized home and a reasonable commute. Remote work can significantly reduce this conflict. As a result, housing demand may shift from areas near city centers where employment was concentrated prior to the pandemic. Think Midtown and the Financial District in Manhattan and the Chicago Loop. But to where?

Remote workers who must come to the office periodically will move farther away from city centers, but still within reasonable commuting distance. That will likely lead to a shift to the suburbs or smaller towns around the city center.

Workers not required to report in physically will move to attractive residential areas. Places ranked high in best places to live rankings will likely see an influx. The current shift from the Northeast and Midwest to the West and South may accelerate. Vacation destinations may see faster growth.

City centers will likely be hardest hit. The drop in economic activity since the pandemic’s start is most significant in city centers. Some economic activity is shifting to areas outside city centers.

In sum, 2020’s unexpected but successful experiment with massive remote work may lead not just to more remote workers, but also to millions of Americans relocating in the next decade or so.



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