Remote work solidifies as major U.S. labor market shift

NEW JERSEY, UNITED STATES — Remote work, it now appears, is here to stay in the American labor market.

Economists now see remote work as the most significant long-term transformation of the labor market, with far-reaching consequences for workers and employers alike.

Remote work stabilizes at new heights

While falling back from its pandemic peak, remote work opportunities have stabilized at levels that far outstrip pre-pandemic norms.

WFH Research data suggests the percentage of average days worked remotely per week remains the same as it did earlier in 2023: between 25% and 30%, more than a three-times increase over the pre-Covid rate.

According to the Bureau of Labor Statistics, 35% of U.S. employees did some or all of their work from home in 2023, down from 42% in 2020. 

Despite the decline, this number remains higher than the 24% recorded in 2019, before the COVID-19 pandemic.

Nick Bunker, the economic research director in North America for the employment-oriented job site Indeed, told CNBC that the shift to working from home is “one of the major shifts in the U.S. labor market in the last couple decades.”

He noted that while remote work won’t disappear entirely, companies will continue to navigate the challenges of offering flexibility to employees. 

“That’s still in the negotiation stage…how remote work and flexibility can coexist, or just how flexibility and work schedules can exist for a variety of different jobs.” 

Benefits for employees and employers

Several reasons account for the persistence of remote work, making it a win-win solution for employees and their bosses.

According to studies by Nick Bloom, an economics professor at Stanford University, hybrid work models are almost as good as giving employees an 8% raise.

On the other hand, remote work offers quite a number of financial advantages for businesses, too. For example, there is lower real estate cost from office space downsizing and an expanded talent pool when recruiting new hires.

Workers allowed to work remotely tend to stay, according to most studies, which means a lower cost of hiring, recruiting, and training.

Challenges and concerns over remote work

Some employers express concerns about reduced oversight of employees and a lack of peer mentoring. 

According to WFH Research, as of July, approximately 36% of employees whose roles could be performed remotely were still working full-time in the office.

In a 2023 ZipRecruiter survey, companies also cited concerns about reduced employee oversight and diminished opportunities for peer mentoring.

Looking ahead, an economic downturn could prompt some employers to reconsider their remote work policies, particularly if workers lose leverage. 

However, Bunker questions whether many companies would take this step, given the financial and morale-related advantages of remote work.