Is the work from home economy here to stay?

Past, present and future of work-from-home trend.

On December 31st, 2019, there were around 25 million Americans working from home. That’s about 16% of the population in total, with 6% of the workforce holding full-time remote positions.

In March 2020, twenty million jobs were lost or furloughed, mainly due to an inability to transition into telework. Simultaneously, companies rapidly moved 60-80% of the remaining personnel to work from home.

But let’s talk about the future.

When offices open up again, most experts project 40-50% of American employees will spend a portion of their week working from home. Using a conservative estimate, this comes out to roughly 55 million Americans, more than twice the number of employees working from home than when we started the year.

Jonathan Dingel and Brent Nieman from the University of Chicago School of Business found that 37% of American jobs can be done entirely from home. Other studies, like World Bank Group’s Jobs’ Amenability to Working from Home, estimate the number of American work from home jobs to be closer to 61%.

The difference comes down to how you classify face-to-face occupational requirements. A waiter will be unable to fulfill their duties remotely, whereas an accountant is capable of doing many of their functions with only a computer and an internet connection.

As companies make adjustments and remove obstacles to remote work, the percentage of work from home jobs goes up. Some positions will be able to adopt work from home habits for at least part of the week. For example, a job that once required daily face-to-face interactions might rely more heavily on telecommunication and occasional, scheduled visits to the office.

Positions capable of pivoting to work from home typically garner higher pay than those unable to shift to telework. All in, remote-friendly positions account for 46% of all wages earned in the country. These affluent positions include tech, legal, financial, engineering, administration, and management.

Companies are already allocating significant portions of their budgets to promote a long-term work from home strategy, including monthly stipends for expenses. There’s an opportunity to meet the needs of organizations who want to keep these high-earning employees engaged and productive.

As occupational requirements change to better accommodate remote work, an even larger pool of employees will need support. Both Dingel/Nieman and the World Bank Group identified areas outside the United States with viable remote work opportunities.

So is work from home economy here to stay?

 

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