Full return to office is ‘dead,’ experts say — and remote is only growing

The rise of remote work, in what some labor experts are calling “the largest change in American working and living conditions since World War II,” is set to accelerate and become a more permanent fixture as of 2022, industry observers say.

The latest jobs report, released Friday, revealed a still-volatile labor market with payrolls gaining just 199,000 for the month of December, down from November’s 249,000 and missing expectations of 422,000. It was a fizzling cap to a year when millions of workers voluntarily left their job each month.

So what’s in store for 2022, as companies and workers waiting for a definitive return-to-office date must once again toss their plans in the air? With more unexpected disruptions the only safe bet, remote work is already taking the lead. By several measures, workers have more leverage than they have historically, amid rising wages, a record number of available job openings and “the Great Resignation.”

Employees hold more cards than usual. One ace they have is a two-year track record of working from home without a drop in productivity — and many report an increase. Workers want remote options so they can cut out the commute, be their best both at home and at work, have more child care flexibility and reduce ongoing concerns about Covid exposure. It’s a reckoning for employers.

“The most reluctant to face the new reality are going to have to experience significant pain to catch up,” said Julia Pollak, labor economist for job site ZipRecruiter, referring to companies. “Many may close barn doors after the horses have bolted.”

Already, jobs specified as “remote” receive 300 percent more applicants than jobs that are not, according to the site’s data analysis.

While the remote boom started the strongest in the tech sector, the best positioned and most pre-disposed to embrace it, it is also spreading to other white-collar office jobs whose workers spend most of their day in front of computer screens and on a phone.

Jobs specified as “remote” already receive 300 percent more applicants than jobs that are not.

Now, hospital administration job listings that say they allow remote work get 92 percent more applicants. Human resource job listings that offer permanent remote work receive 70 percent more applicants.

“The idea of a full return is dead,” said Nicholas Bloom, an economics professor at Stanford University who studies management practices. 

The change in attitudes can be charted in the survey he’s been conducting of employers about their planned number of work-from-home days “post-Covid.” From June 2020 to November 2021, the number of days has steadily increased, from 1.4 days per week to more than 2 days.

“Firms have become increasingly positive on work from home as the pandemic has dragged on. They have adapted their management, organization and IT to operate more effectively with work from home employees,” Bloom said. “Additional return-to-office delays are likely to further increase long-run work from home levels.”

“This is an underlying permanent shift that people are not taking seriously enough,” said Marc Cenedella, CEO of online job search service Ladders, in a statement. “It’s the largest change in American working and living arrangements since World War II.”

“Since people can work from anywhere, they can live anywhere, which will have a fundamental long-term impact on everything from who is on the local PTA to who is running our local towns to how and where we live,” he said.

By the end of 2021, the number of available permanent remote positions doubled from 9 percent to 18 percent, according to data analyzed by Ladders. That could increase to 25 percent by 2022, according to the analysis.

Several organizations that had some of the most pro-office stances have softened their postures in recent weeks. Goldman Sachs, whose CEO called remote work an “aberration,” told its bankers last week to work remotely until Jan. 18 because of rising infection rates. JPMorgan Chase extended its return-to-office date to Feb. 1. 

In June, Morgan Stanley CEO James Gorman drew wide attention for telling workers he would be “very disappointed” if they weren’t back in the office by Labor Day. “If you can go to a restaurant in New York City, you can come in to the office,” he said during an investing conference webcast.

Now, those very New York City restaurants are closing in droves due to confirmed and suspected Covid exposures. Gorman has changed his tune.

“I was wrong on this,” he told CNBC last month, as omicron began to sweep the nation. “I thought we would have been out of it past Labor Day and we’re not.”

Remote pressures are building… with the significant numbers of positive tests, employees with the virus, and schools staying remote.

“I think we’ll still be in it through most of next year,” Gorman said. “Everybody’s still finding their way and then you get the omicron variant; who knows, we’ll have pi, we’ll have theta and epsilon, and we’ll eventually run out letters of the alphabet. It’s continuing to be an issue.”

Other big firms, including Citigroup, DoorDash, Google and Uber, have all said they’re “pausing” return-to-work plans until conditions improve.

“No one really knows when offices will get back to the pre-omicron reopening plans, but most employers are hoping for this to peak sooner versus later,” said William F. Ziebell, CEO of the human resources division at Gallagher’s consulting firm. 

Disease experts predict the omicron wave will peak by the end of January and recede “substantially” by March.

“I do think in places that we are seeing this really steep incline, that we may well see also a precipitous decline,” Dr. Rochelle Walensky, director of the Centers for Disease Control and Prevention, said Friday at a media briefing.

Meanwhile, “remote pressures are building… with the significant numbers of positive tests, employees with the virus, and caregiver challenges such as schools staying remote,” Ziebell said.

Companies are having to get more competitive in 2022 to attract and retain talent, setting aside 3.9 percent of payroll for wage increases this year, according to the Conference Board, a private research group.

Corporate landlords are investing in amenities, hoping to lure back workers from their couches. Dry-cleaning pickup, fitness classes, new retail spaces, and on-site child care are among the offerings. Luxury offices are being positioned with Covid-aware design touches, with more open-air seating and outdoor gathering spaces.

Above all, employers and managers are on the hook to make a compelling reason for workers to come back, human resource experts say. Employees want to know they will have intentional opportunities and needs to connect and collaborate, not to simply show up for roll call meetings or be stationed at a desk so their work can be physically surveilled.

“Leaders must create a compelling environment that gives employees a reason to return to their workplace and sells them on the benefits of being together in a shared physical space,” wrote research firm Gallup.

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