Remote Work and the New Normal

“Telework,” or remote work from an off-premise location, is not new -- workers have leveraged technology to work remotely since the advent of the telegram. Modern telework before the pandemic – despite being technically feasible for over 20 years – remained uncommon: official estimates peg incidence at ~5% in 2018.

The ability to work remotely was a rare perk granted semi-officially to senior executives, specific job functions such as IT staff or call center employees, those undergoing temporary life changes like family leave, or to accommodate workers with disabilities. Many of the primary barriers to wider adoption within the workplace were not technological, but rather organizational and behavioral, including the following:

• ?Concerns about worker productivity
• The social stigma associated with remote work
• ?Lack of managerial awareness of best practices
• Technologies not deemed to suitably replace in-person interaction
• The incremental cost of maintaining separate policies, staff, and equipment

Many of the above issues were indeed valid concerns pre-pandemic. However, they arose mostly from a lack of network effects driven by remote work’s historically low incidence. Employers had not learned best practices for managing remotely because they never needed to; remote technology was not quite to current standards because there were few customers to whom to sell solutions. Likewise, firms were hesitant to experiment with radically new HR models because it might be a competitive misstep.

When the initial lockdowns occurred in early 2020, suddenly anyone who could work from home had to do so, and that lack of optionality resulted in a “shared learning environment” between everyone involved – employers, employees, vendors, and customers. As technology issues were resolved and new workflows developed, employees and employers alike discovered that productivity output was not suffering under remote work – several studies show remote work exceeded on-premise productivity.

According to The Economist’s Reshaping Productivity report, 39% of survey respondents report greater remote productivity, while separate studies from the National Bureau of Economic Research (NBER) estimate a 7-9% boost that has trended higher over time.

The productivity gains achieved to date and time savings from not commuting provide a powerful rationale for why remote/hybrid work will become a permanent fixture in organizational design. Employees work more efficiently when freed from office distractions and they are also able to dedicate more time to work itself.

Bottom Line

The pandemic continues to drive a “shared learning experiment” testing the viability of remote work on a mass scale, with approximately 38 million households having at least one member working remotely during 2021.

• ?For the first time in decades, US workers control a tight labor market and can dictate the terms under which they will work; the “Great Resignation” narrative reflects employees’ re-evaluation of work’s role in their lives as they prioritize flexibility and autonomy in new models provide. ?
• The discovery that remote work benefits from network effects are crucial to understanding why the practice never became common pre-pandemic but will have a lasting impact into the future – as per NBER 15% of all US employees will work remotely once the pandemic subsides, roughly triple the pre-pandemic rate.
• Remote workers tend to skew male, younger, upper-income, well educated, and reside in urban metro areas; they are generally tech-savvy and willing to invest in multiple hardware/software solutions that enhance their productivity.
• Whole-home cybersecurity and premium technical support services are leading interests among remote workers, their employers, and small-medium business owners; firms can reap cost-effective ROI by subsidizing employees’ connectivity expenses at greater rates than they do currently (~8%).
• Firms dismissing remote or “hybrid work” as the future of organizational design do so at their peril, leaving them at a critical disadvantage in HR negotiations; workers consider such flexibility to be “table stakes” and four in ten would leave their current employer if they are no longer able to work remotely on at least a part-time basis.
• The virus continued circulation has altered return-to-office plans yet again, illustrating the need for companies and workers alike to plan for remote models for the near future; best practices honed now support corporate resilience in the face of continued operational threats.

This is an excerpt from Parks Associates research study Work Transformed: Impact on Communications and Technology Markets. Thank you for your support and reading our research.