Whether you’re a remote work booster or a skeptic, there are lots of unanswered questions about what happens next for remote work, especially as Covid-19 restrictions continue to fade and as fears of a recession loom.
How many people are going to work remotely in the future, and will that change in an economic downturn? Will remote work affect their chances of promotion? What does it mean for where people live and the offices they used to work in? Does this have any effect on the majority of people who don’t get to work remotely? If employees don’t have to work in person to be effective, couldn’t their jobs be outsourced?
It turns out there’s a dangerous line between arguing for remote work and arguing yourself out of a job. And since remote work makes employees less visible, they will have to find other ways to let higher-ups know they exist or risk being passed over for pay raises. Remote work will also have long-lasting effects on the built environment, requiring office owners to renovate and allowing employees the potential for a higher quality of living. Finally, what happens during a recession largely depends on whether your company decides to save money by reducing real estate or laying off the employees they never met.
One thing that’s clear is that remote work is not going away. There are, however, a number of ways to make it better and more commonplace, and to ensure that it doesn’t harm you more than it helps.
To get a better idea of what could be coming, we asked some of the most informed remote work thinkers — people who study economics, human resources, and real estate — to make sense of what to expect in the future of remote work. Their answers, edited for length and clarity, are below.
Five years from now, what percentage of the US population will work remotely?
Johnny Taylor Jr., president and CEO of the Society for Human Resource Management: I think that number will never exceed 30 percent fully remote. What percentage will have some remote work? Probably 60 to 65 percent. There are some roles that will never be remote. But even in retail, employers are trying to figure out how to give that worker population some ability to work remotely. One retail company I talked with is going to make it so that the people who work in the store five days a week now do one day a week in customer service remotely.
Nicholas Bloom, economics professor at Stanford University, co-founder of WFH Research: Currently, 10 percent of the US workforce are fully remote and 35 percent are hybrid remote. In five years, I think both numbers will be pretty similar. Pushing this up is continued technological improvements in working-from-home technology. Pushing this down is the pandemic ebbing from memory.
Julie Whelan, global head of occupier research at Coldwell Banker Richard Ellis: The last few years has proven that people are able to work remotely. Now, we are trying to mix a combination of in-person and remote work — that is where the challenges shine. I am not convinced we will see a large jump in fully remote work; I think jobs that are fully remote will always remain the minority.
What has to change for more people to be able to work remotely?
Matthew Kahn, economics professor at the University of Southern California and author of Going Remote: How the Flexible Work Economy Can Improve Our Lives and Our Cities: Firms must have clear performance metrics — ideally ones that can be verified using quantitative data, so that remote workers understand in real time how they are performing. Firms must also figure out how to configure “virtual watercooler” interactions so that remote workers are less likely to feel like they are out of the loop.
Arpit Gupta, assistant professor of finance at New York University Stern School of Business: Companies need to have better ways to onboard new workers and get them involved in corporate culture. They also need to improve remote workers’ ability to connect with different parts of the organization and create better ways to manage new idea generation and creativity. Finally, they need to ensure improved promotion prospects for purely remote workers and the ability to go completely remotely from one firm to another.
Bloom: The main driver of working from home is whether it makes business sense for the organization, and if employees are happy doing this. This is driven by technology and the job task. Over time the technology is slowly improving to support working from home. I have been working on this topic for almost 20 years, and the changes over that period have been incredible. Twenty years ago, working from home meant telephone calls and emailing or mailing small files. Now it’s all video calls and the cloud. Within 10 years, I predict new major technologies will arise to make this far better. In terms of job tasks, these are also changing to support working from home. For example, my neighbor is a doctor and pre-pandemic was in the office every day, but now sees patients remotely two days a week, as her job tasks now include televisits.
Taylor: We as management have to get comfortable with a total paradigm shift. We constantly say, “That can’t happen.” And the fact of the matter is we have to be willing to challenge our notions of what can’t happen and say, “Can it?” We’re in this dynamic stage where we’re determining whether or not it works. So the question, “Can you work remotely?” is really not the question. Is it possible? Yes, during the pandemic we proved that it’s possible. The question is, will there be trade-offs?
How might remote work affect jobs that aren’t remote?
Gupta: Changing consumption patterns will create more demand for goods and services — and the people who provide them — in the suburbs and remote-friendly destinations, relative to office central business districts in current metropolitan areas.
Bloom: Many non-remote jobs interact with remote workers. Think of retail and food service workers in city centers. If office employees move to remote work, these service workers have to change their location of work, too.
Taylor: More jobs might become partially remote. For a nurse, we’ll give them three days in the hospital and two days as a tele-nurse. So we are thinking a sharing of responsibilities to get to hybrid, even in those roles that absolutely, at the end of the day, largely have to be in person.
Will remote workers find it harder to advance than their in-person colleagues?
Taylor: Yes, point-blank. More than two-thirds of supervisors (67 percent) consider remote workers more easily replaceable than onsite workers, and 62 percent believe fully remote work is detrimental to employees’ career objectives. Managers acknowledged that when they are looking to give an assignment, they oftentimes forget the remote worker. Proximity matters.
Something that is of particular importance to me as an African American is, for years, we argued that we weren’t able to build relationships with the majority community. We didn’t have access to them and therefore visibility. Well, you really lose access and visibility if you’re at home and they’re in the office.
Taylor: We are absolutely seeing people move further away. Hell, I’ve even seen people who have to be in-office two days a week say, “Hey, I live in a totally different city, and I can commute in.” So I can live in Atlanta, work in Washington, DC, buy a plane ticket for those two days, get a hotel, and the math says it’s actually cheaper and better for me to live where I want to live and commute — even if the company doesn’t pay for it, because I don’t have to pay for housing in DC.
Kahn: In expensive superstar cities, working-from-home workers will be more likely to move to the suburban fringe, where land is cheaper and the homes are newer. Remote workers will also seek out beautiful areas that offer them the leisure opportunities they desire. Real estate prices in Santa Barbara, California, have boomed since March 2020 due to its beauty and its proximity to Los Angeles. Perhaps surprisingly, medium-size cities such as Baltimore will gain. Located along the Amtrak Corridor, Baltimore offers easy access to Washington, DC, New York City, and Philadelphia and features much lower housing prices.
How will it affect pay?
Fairweather: Some companies are localizing pay for their workers who relocate and work remotely, but plenty are letting remote workers keep their high salaries. The biggest winners will be coastal workers who move to more affordable places and maintain their salary. They’ll find their money goes much further, not just for housing but for other goods and services. The biggest losers are people already living in popular migration destinations who may not have the option to move somewhere less expensive, and whose salaries may not go as far as they once did, thanks to both higher inflation and rising home prices in their area. However, some people living in popular migration destinations may be happy that their home values have increased and their local businesses have more high-earning customers.
Bloom: Working from home is a perk, so it means any individual firm offering hybrid-WFH can pay about 5 to 10 percent less. But, of course, there are also general equilibrium effects in that firms compete for talent in a labor market. If every firm offers working from home, no individual firm can cut pay without losing employees.
Will remote work cause companies to hire more contractors or more people outside the US?
Taylor: An employee came to me, and she made a really, really compelling case: “Johnny, I don’t need to come into the office.” She literally gave me a three-page memo making the case for why she could work remotely. And I smiled and said, “Be careful what you pray for. In the process of saying, ‘I don’t need to interact with other people, I’m an individual contributor,’ you’ve literally made the case that your job can be outsourced. And now I don’t have to cover your pension plan, I don’t have to deal with a salary increase every year, I don’t have to do any of that.” And guess what? I did exactly that. I outsourced that role.
Let’s face it, most of us could have a fully contracted environment, but what we want is a culture, people who have a long-term commitment. We want to build leadership; we need management. And we do that by having consistent relationships and getting to develop our people, so there’s a lot of upside to employing people internally and reasons that we don’t outsource. But there’s a lot of space between not doing it and doing a little bit.
Gupta: Yes, to both outside contractors and outside the US employees. But these workers will be more integrated into existing job functions and teams, rather than outsourcing entire processes.
Kahn: This offshoring is a serious possibility. Those firms that require some monthly face-to-face interaction at the corporate headquarters will be less likely to engage in offshoring.
Bloom: This is already happening, from what firms tell me. Anti-immigration policies initiated by Trump have accelerated this process by reducing the ability of foreign workers to migrate to the US. So dozens of firms have said if they can’t get workers to their jobs in the US, they will move their jobs abroad. Working from home has shown how easy it is to have fully remote employees and teams, and in an era of tight domestic labor markets with restricted immigration, moving jobs overseas is one common solution (the other being automation).
But I should point out currently that this is probably good for most US citizens. US labor markets are incredibly tight, generating painful inflation and shortages of goods and services. Try taking a flight, booking a restaurant meal, or hiring a contractor. It is extremely hard, as there is too much demand for labor right now. So having some foreign workers fill that gap in is good news. Of course, if the US hits a hard recession and unemployment rises drastically, that benefit will be less clear.
What will happen to remote work in a recession?
Gupta: I actually suspect remote work will increase. While firms have bargaining power against employees, they mostly want to cut costs like real estate leases, pushing people remote.
Firms are also less interested in onboarding new employees into corporate culture and long-term innovation — two important use cases for the office. It’s more about keeping things going, which can be handled by existing workers at home.
Kahn: Scenario 1: The boss has discretion over who to fire and is more likely to fire the remote worker, because the boss doesn’t really know this worker and hasn’t built up a friendship with the worker.
Scenario 2: Since remote workers do not bear a fixed daily cost of commuting to the office, such workers can more easily reduce their hours to meet the firm’s new demand for labor. In this case, remote workers may be less likely to be fired.
Taylor: Reversing this — putting this genie back in the bottle — is not going to happen. What I think is more likely to happen during a recession is that productivity will become even more important. And so then you will see employers looking really, really hard at the data because they’re going to have to make choices between employee A and employee B. And so employees who are more productive and more efficient are the people who are going to make it through.
Fairweather: Historically, recessions have lasted longer because it takes time for workers to move to job opportunities. If a salesperson in Cleveland lost her job, she may have had to move to San Francisco to find another sales job. But with remote work, you can do a sales job from anywhere. Hopefully this recession is shorter than historical recessions because of remote work.
