This is how corporate America
feels about remote work in 2023. The laptop classes Living in la la land, it's
messed up to assume that this They have to go to work. But you
don't. It's not just a Productivity thing. I think it's
morally wrong. Listen, It doesn't work for young kids.
It doesn't work for spontaneity, It doesn't really work for
management. And this is how the corporate
world felt about remote work in 2020, during the height of
COVID-19. The biggest advantages I think,
are access to large pools of Talent, who don't live around
the big cities and aren't Willing to move there. Since We've all been forced into being
remote now for nine months, I Think we've realized that if you
have somebody in a particular Location who's willing to work
the hours to be able to Collaborate, you can do it very
effectively. So it's changed That we thought about hiring.
Let's Pause here, notice something in
fewer than three years, Corporate leaders have reversed
their approach to remote work. And it seems like this tactic
has been working, the latest Data from the Census Bureau
found that fewer than 26% of US Households still have someone
working from home. That's down From 37% in early 2021. So The reason we're having this
entire conversation about remote Work dying is first of all,
because we kept thinking that We're going to bounce back to
quote unquote, normal when the Pandemic started, and we had
people working from home. The Idea was, this is very
temporary, and we were all going To come back. So Really what's changed the
discussion about remote work is The slowdown in the labor
market. There are a lot of Employers out there who had
suspicions about remote work From the start. And you can see
that kind of by the timing of When people actually went to
being remote during the start of
The pandemic. So the concerns
that employers had about remote Work were present all during the
Great reshuffle. But they didn't Really have much of a choice.
But with the emergency orders Expiring for the pandemic this
year. Now, they can actually Start to bring people back and
address some of those concerns That they might have about
productivity. Remote work was brought upon us
basically by the pandemic, Before the pandemic remote work
was pretty rare. So about 5% of Days, were forced to work from
home, you know, all managers and Professionals were basically
fully remote from March of 2020. And then it turns out, it's
worked really well, Such as no commute work in in
your sweatpants doing your Laundry between zoom calls, but
also just the savings in terms Of time in terms of money in
terms of your commute in terms Of being able to spend more time
with your children or pick them Up from school, people quickly Found ways to be productive, to
continue communications together And to keep collaborating
together. And whatever tools They could invest in to support
that work and that teamwork. As the world slowly started to
open up, corporate America began To change its tune on remote
work, so much so that some firms Now even threatened to fire
their employees, if they don't Show up at work, Zoom the company this is now
throwing in the towel on fully Remote work, Even zoom, the video
conferencing company that helps Make the remote work boom
happened in the first place, is Also taking a hard line on
return to office. It's an Abrupt shift from last year,
when I suggested a majority of Its employees would work a
hybrid schedule of just 2% Working in person full time. So some of the pushback remote
work is driven by concerns about Productivity. There have been
some experimental studies that Show that there's some
productivity impact potentially
From remote work. But those
studies are also experiments, Right? It's unclear how they
applied to the broader labor Force, The United States does have a
productivity problem. Before the Second quarter of this year, the
country had experienced five Consecutive quarters of year
over year declines in worker Productivity. In fact, a major
study that Professor Nicholas Bloom co authored found that
fully remote work led to Productivity declines of about
10 to 20%, when compared to Fully in person work. Now, the Other important thing in this
study is we pointed out, look What firms care about,
ultimately, is profitability. And it turns out that if you
have an employee that's remote, You also save a lot of costs. So
you're saving about 10% less Overhead because you don't have
an office and then you could Have these folks, maybe
nationally or internationally And maybe save another 20 30 40%
remote workers they may be 5 10% less productive, but they
are so much cheaper that is Profitable for firms to have
many teams many employees remote If you're coming with the stat
to protect yourself to put the Positive narrative for people to
return to work. I like to think What were the productivity like
when people were all working From home what you're not
allowed to have any face to face Worker at all right? So now
you're spinning it in your Favor. So I'd like to challenge
that If the employee can perform
their their duties and handle Their responsibilities. They
should be encouraged to work From wherever makes them feel as
excited about life as possible. I camped in Key West for three
weeks. I was in North Dakota in February, I've been up and down
the coast of California and I've Been to our national parks. For
me. That's where I feel best Working. And that's where I've
gotten my best work done. I Believe we can work from
anywhere. My name is Sujan Parajuli, I
used to work for JPMorgan and
Chase it was all remote. But once
they changed their policy to Come to office that was in
Plano, Texas, but I live in California. So I decided not to
move out there because of my Kids. So I have two school going
kids. I have to manage work life Balance as well. That was the
reason why I quit my job. JP Morgan had given me 45 days of
timeframe to find another job. And I applied for some other
companies and found remote Job with Leidos, so I have
been working remotely with Leidos As a senior system
analyst. Parajuli is not alone in
his choice to quit rather than Return to an office setting.
Finding a fully remote job, Though, is getting more
challenging. New research from Indeed found that job postings
are declining faster in Metropolitan areas where many
jobs can be done remotely. A Similar trend is playing out on
LinkedIn as Well. So on LinkedIn last year,
we saw that about one in seven Jobs were remote. And now that's
down to about one in 11. But Over this time, we've also seen
an inversion. Now we see about One in seven jobs being hybrid
coming up from one and 11 last Year. So we're seeing more folks
coming back into the office, but They are not coming back into
the office five days a week, Many employers are strong arming
their team members, and that They would love remote work to
die faster. As a result, I do See that remote work is quote
unquote, slowly dying and Becoming more competitive to
get. The pandemic induced shift to
remote work has raised concerns About the future of commercial
real estate, especially office Spaces. The latest report from
McKinsey Global Institute Suggests that remote work
threatens to erase $800 billion From the value of Office real
estate in nine major cities Around the world. Other experts
say the empty offices created by Remote work in various cities
are also leading to what's been Called the, quote, urban doom
loop. The problem does start with the
Office demand right then we've
Seen with the advent of remote
work and hybrid work and Dramatic reduction in office
demand over these past two Years, that has led to right to
rising vacancy rates and in Fact, all time high vacancy
rates in the office market right Now. And that does put pressure
downward pressure on the Valuations of these offices, you
mentioned that they're down, you Know, probably 20 or 30%.
Already, they're likely to fall By more. And that causes
downward pressure on property Tax revenues, because for a lot
of cities, office tax revenues Is a big chunk of their tax
revenues, often as much as 50%. Some of that is is coming from
office, maybe 20%. So maybe 10% Of overall tax revenues for
cities comes from office, if Those offices lose about half of
their value, tax revenues fall And that creates a huge hole in
the budget. So like everything, there are
going to be winners and losers As we transition to a world
where we have remote work as a Permanent feature. One of the
potential losers is commercial Real estate, in part because
offices aren't needed as much or They're not needed at all. So
commercial real estate may be a Loser for remote work. We may
also be concerned about Businesses that support workers
who come to the office. So think About your food trucks, your
laundry services, all of these Businesses that are centered
around folks coming into the Office five days a week, they
may face difficulties, when That's not happening as much Commercial real estate is
problematic in a number of big Cities. But there are a lot of
people now who are saying that We need to bring people back to
the office because our Commercial buildings are empty,
which is a little bit like Saying, we need to have people
use the horse and buggy because Cars are going to wipe out that
industry, we have to understand That the world has changed. Our
ways of working have changed and We can't go back to an old
outdated way simply because we Are being motivated by
commercial real estate,
Commercial real estate needs to
rethink we've already seen in Some cities, that it's being
converted, it's being used for Other purposes, some of it's
being converted into residential Housing, and we're going to have
to get much more creative about What to do with those empty
buildings. If you're pushing your employees
to come back to the office, you Got to make sure that they're
coming back to the office for Something other than me. I Don't think we ever will bounce
back to those pre pandemic days. What I do think we will see and
we are already seeing is that There is a benefit to also being
in person and that's why we're Seeing companies first saying
come back one day a week Two days a week, three days a
week, maybe four days a week Even. But I do think that the
old school five days a week, 40 Hours on the premises, I do
think that's dead. I don't think It's coming back. I'm a family person. And most
importantly, I can save like, Multiple hours by working from
home by saving commute hours, and Which I can give to my family. I
can give those hours for myself, Which has been benefiting a lot
and I always prefer to do Work remotely. Work From Home is here to stay.
You know, if you're concerned About it, the best thing to do
is figure out how to make it Work because it's definitely not
going away.
