Remote work has decreased since the pandemic but is still three to four times more common than in 2019. Nearly half of workers want the option to work from home.
“The pandemic proved we can work from home,” says Kory Kantenga. He is a senior economist at LinkedIn.
These industries hire skilled workers. They include tech, finance, and professional services. They use remote work. About 40% of employees with advanced degrees work in hybrid roles.
Challenges of Remote Work in Certain Industries
Workers in manufacturing or service jobs need to be onsite. “You can’t make a carpet from your basement,” says Sandra Moran, CMO at Workforce Software.
At its peak in April 2022, 20.3% of job postings offered remote work. This is more than double the share in January 2021 and much higher than the pre-pandemic 3% to 5%.
As of last August, about 1 in 5 workers were teleworking. This matches earlier 2022-2023 stats.
Transitioning to Hybrid Work: The New Normal
The number of remote workers has decreased. Many are returning to the office, either by choice or due to company requirements. Now, about 9% to 10% of people work. Employers often replace remote work with hybrid schedules. These vary from a few days in the office to quarterly visits.
“The big shift is in the broad category of what we call remote,” says Nick Bunker. He is the director of North American research at Indeed. “We’re shifting into a new equilibrium with more people working a few days a week. The more enduring feature of remote work is now hybrid.”
Significant differences exist within the industry and among countries. About 10% of jobs are remote, but 45% of the applications received in December were for remote positions, according to a LinkedIn study. In the U.S., hybrid positions account for about 13% of LinkedIn postings. In the U.K., it is 45%, and in Israel, it is 44%.
A new study in the Review of Economic Studies found that remote work during the pandemic boosted productivity. It also raised housing prices and cut office rent costs. It will likely increase income inequality and change city living. This agrees with other research. It shows broad economic shifts. They are due to more people working from home. They do so either remotely or in flexible, hybrid arrangements.
Impact of Remote Work on Consumption Patterns and Real Estate Markets
Goldman Sachs economists noted that remote work is changing consumption patterns. People spend more on home office and recreation goods and less on office-adjacent services, like transportation. This trend is likely to continue.
Remote work has also affected real estate. It raised apartment rents and house prices in some areas. However, it has lowered office rents in city centers. A study by the University of Utah found that central business district office rents dropped by 8%. Housing costs rose by 14% near downtown and 25% in outer suburbs.
The changes reflect trends underway before the pandemic, but the pandemic may have accelerated them. When COVID-19 struck, many people chose to leave crowded cities. They wanted places where they could have more space, a home office, and a big outdoor area.
Over time, jobs and the companies that provide them have moved to where the workers are. This is a significant change from when people shuffled into the big cities for their paychecks.
The decline in remote job postings over the past year has not been uniform. Big tech employers like Google, Amazon, and Meta are pushing return-to-office policies. The policies need staff to be present at least two to three days a week. According to a report from LLC.org, Santa Ana, California, saw a 45.1% drop in remote work. New York saw a 28% decline, while Huntsville, Alabama, home to a large NASA workforce, saw a 34.7% drop. Male workers in Huntsville returned to work twice as much as women employees.
In contrast, the suburbs of larger cities have also grown. Glendale, Arizona, a suburb of Phoenix, saw a 37.5% increase, while Arlington, Texas, a suburb of Dallas, saw an 18.6% gain.
“Two things are driving housing demand,” says Brad Case. He is the chief economist for Middleburg Communities and a developer of rental homes. The factors are full-time work from home and hybrid work. “That will have more effect in suburban areas than central areas. “If you work full-time from home, you want to avoid being in downtown San Francisco or New York. “The real kicker is this encourages the jobs themselves to move.”
The Relationship Between Remote Work, Housing Trends, and Economic Growth
A Zillow survey found that people are moving to cheaper places, and jobs are growing fast in these places. These places include Charlotte, Raleigh, Orlando, Jacksonville, Houston, and San Antonio. Florida and Texas are the top states for attracting workers, with Vermont rising from 30th to 3rd. Many people moved from New York and California to warmer, less strict areas during the pandemic.
Remote work increased demand for larger, cheaper housing. Despite some companies pushing for office returns, remote work remains popular. It boosts productivity. But, it may widen income inequality. It benefits high-skill workers more.
Remote work is here to stay. According to the Economic Innovation Group, it has stayed steady and even increased a bit. There is no major return-to-office trend.