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Remoting

Our survey data suggest that more than half of the American workforce is working from home either all or part of the time. May 10, 2022
Economy, finance, and budgets

Analysts debate the proportion of employees that work remotely, but our latest research suggests that it amounts to roughly half of the U.S. workforce.

In late 2020, we launched the Remote Life Survey through Gallup, collecting detailed information about respondents’ employment situation, demographics, and well-being. We found that in October 2020, 31.6 percent of the American workforce always worked from home, while 22.8 percent sometimes or rarely worked from home, for a total of 54.6 percent. These estimates are much higher than those provided by the Bureau of Labor Statistics Current Population Survey, whose data suggest that, during the same month, the proportion of remote workers was closer to 20 percent—a significant discrepancy. If the gap is accurate, and our figure is closer to the truth, then we might be underestimating the proportion of the remote workforce by more than 30 percentage points—meaning that the figure is closer to 50 percent, which lines up with Gallup’s numbers from this past February.

We investigated some competing explanations for the contrasting estimates. Our primary insight is that the BLS data exclude employees who worked remotely pre-pandemic. If people who already worked remotely continue to do so—and many may have transitioned from a hybrid model to fully remote work—then the BLS measure might underestimate the incidence considerably. Further, by limiting respondents’ answers to either “yes” or “no,” the survey might overlook hybrid and indirect forms of remote work.

Correctly estimating the proportion of remote workers is important for understanding the impact of labor-market policy. Some studies have found that hybrid work has a causal and positive effect on productivity and connectivity in the workplace. Remote work is no panacea for structural problems in organizations; it’s a margin for flexibility, not a tool for turning around broken incentives and processes. Corporate culture and the underlying feeling and mood in an organization still matter most.

Still, the rise of remote work has taught us two things. First, federal and state policy should promote choice among employees—not mandates that discourage individual autonomy and bring no tangible public-health benefits. If we have learned anything about the workplace over the past two years, it is that employers and employees alike will adapt their protocols to comply with whatever new mandates governments impose. But the additional time and effort required to adhere to increasingly complex restrictions is burdensome, especially to workers. Employees are more enthused about remote work than are employers, but a tight labor market might pressure firms to be more accommodating. Some workers say that they would be willing to quit their current jobs to find remote work, prompting some companies that had previously committed to in-person work to embrace a hybrid work structure. And some survey evidence suggests that employer plans and employee desires are now starting to converge. Mandates and regulations would only slow the necessary sorting.

Second, localities—especially big cities—must realistically assess the value they provide residents. Over recent decades, superstar cities have benefited greatly from technological and economic conditions that fostered a dense population of knowledge workers. But remote work enables highly skilled people to work at profitable companies in specialized roles without having to pay the high housing costs or embark the on lengthy commutes that characterize many cities. Remote work is now contributing to population decline in large urban counties. Americans seem increasingly keen to leave big cities, and mayors must implement competitive policies to lure people back and retain those who have stayed, such as around arts and cultural amenities and better public schools.

Remote work clearly reduces socialization and collaboration; companies are struggling to identify the optimal model for their organizations and workforces. But despite its flaws, remote work has helped make labor markets more competitive and empowered workers. Local and state governments that fail to provide choice to companies and their employees will hurt themselves in the long run.

Photo: danijelala/iStock

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