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Work-From-Home Era Ends for Millions of Americans
Share of businesses with workers on-site most of the time neared prepandemic levels in 2022, Labor Department finds
Several big companies have said they want their workers to report in person—and more often.
By Gwynn Guilford, WSJ
March 25, 2023 5:30 am ET
Working remotely is becoming increasingly rare a few years after the pandemic caused millions of Americans to decamp from worksites to their basements and bedrooms.
Some 72.5% of business establishments said their employees teleworked rarely or not at all last year, according to a Labor Department report released this week. That figure climbed from 60.1% in 2021. The survey showed about 21 million more workers on-site full time in 2022, compared with the prior year. An establishment is defined as each business location—such as an individual restaurant in a chain.
The new number is also close to the share of establishments—76.7%—that said they had no employees teleworking before the Covid-19 pandemic, and that were open in February 2020, the Labor Department said. Employers recently have begun pushing harder to get staff to work on-site more often, as recession fears prompt an increased emphasis on worker productivity.
“There’s a sense that innovation, creativity and collaboration can suffer when teams are apart,” said Mike Steinitz, senior executive director at Robert Half. A survey by the global recruitment firm found that 92% of managers prefer their teams to work on-site.
“They believe employees are simply more productive in the office,” he said. “They also feel that it’s important for mentoring and training both new and existing employees.”
Several large companies have said they expect their employees to report in person, more often. Walt Disney Co. now pushes for four days a week on-site. Starbucks Corp. has asked office staff to come in more. This month, Meta Platforms Inc. Chief Executive Mark Zuckerberg told employees at the Facebook parent that in-person time helps build relationships and get more done.
“Our hypothesis is that it is still easier to build trust in person and that those relationships help us work more effectively,” he wrote in a letter to employees.
The share of business establishments with hybrid arrangements, where employees split time between home and worksites, decreased in all measured industries in 2022 from 2021, declining 13.4 percentage points across the private sector, according to the Labor Department. A particularly stark drop played out in the finance sector, including banks and brokerages. The share of financial establishments operating hybrid dropped by half, to 22% in 2022 from 44.9% in 2021.
Remote work was particularly rare for service-providing jobs, such as those in retail, restaurants and accommodations. Employment gains in those categories contributed to more employees working on jobsites. Hiring in leisure and hospitality and retail accounted for nearly 30% of the 7.7 million gain in private-sector employment since August 2021.
The Labor Department survey asked about telework, which it defines as an arrangement that allows an employee to work at home, or from another remote location, by using the internet and other digital communications. The survey was conducted in August and September of 2022, while the 2021 survey was administered from July to September of that year.
Scrapping hybrid work meant a wholesale return to the worksite for many businesses—but not all.
Remote work remained fairly common last year in some jobs that traditionally were done in an office. In the information sector, which includes tech and media firms, 67.4% of establishments said their staff worked remotely some or all of the time. In the professional and business sector, which includes law and accounting firms, the share was 49%.
And the share of establishments that were fully remote rose slightly last year, to 11.1% of establishments from 10.3% in 2021, the Labor Department said. In the information industry, that share increased 4.8 percentage points, to 42.2%. Financial activities, professional and business services saw smaller increases. Companies in many of those predominantly white-collar industries offered more flexibility before the pandemic, Mr. Steinitz said.
Research by economists using a different survey—one that measures the share of days worked remotely—suggests that remote work persisted into 2023, though it has shown signs of slipping recently.
In February 2023, 27.7% of total days worked were from home, after holding fairly steady at an average of 30% each month in 2022, according to research by economists Jose Maria Barrero of Instituto Tecnológico Autónomo de México, Stanford’s Nicholas Bloom, and Steven J. Davis of the University of Chicago. The share is down sharply from May 2020, when around 60% of days were remote but still more than five times the rate that prevailed before the pandemic.
Two factors are driving the slight drop in work-from-home days, Mr. Bloom said. Companies are pushing managers and professionals to return to the office for more days each week, he said. And the number of fully remote workers is shrinking. Mr. Bloom and his colleagues’ survey showed that the percentage of employees working fully on-site reached 60.8% in February, up from 54.6% in November 2021. The declining share of fully remote workers drove more than two-thirds of that shift.
“These fully remote workers are being slowly asked to return to the office, or being moved offshore,” Mr. Bloom said. “U.S. wages are very high so moving fully remote workers to Mexico, Philippines or India can generate huge cost savings.”
Remote work, however, isn’t likely to entirely disappear.
Some 13% of current job postings are for remote positions, according to staffing firm ManpowerGroup. That is down from 17% in March 2022 but well above the prepandemic level of 4%.
Write to Gwynn Guilford at email@example.com
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