By Dr. Adam Ozimek
2020 has been a year of profound change for businesses and professionals shaped by the global pandemic. As we approach the new year and reflect on the last nine months of the global shift to remote work, many may wonder what this experience will mean for the American workforce going forward. To better understand the impact of the pandemic on the future of work, we surveyed 1,000 hiring managers about the current state of hiring, their sentiment toward a remote workforce, and their future staffing plans in our Future Workforce Pulse Report.
The key results are as follows:
The Current State of Remote Work
To understand the potential long term impacts of the rapid shift to remote work caused by the pandemic, we examined how the current remote work experiment is operating in the U.S. Our survey estimates that 56.8 percent of Americans are still working from home at least some of the time. Of that group, 41.8 percent remain fully remote, which is a 5.9 percent decline from the percent that were remote at the peak of the pandemic in April. Another 15 percent are currently partially remote, meaning some days they work remotely, some days they work on site.
While research suggests a lot of uncertainty in measuring the full scope of remote work, these findings are consistent with some other estimates. Gallup, for example, finds that 58 percent of workers are remote at least sometimes, although they find a mix that is less full-time and more part-time.1 Given the high magnitude of uncertainty, the results are also relatively consistent with Barrero, Bloom, and Davis who find that 41.4 percent were working from home in October.2
How Remote Work is Going
Earlier this year, we released our annual Future Workforce Report which found that most hiring managers felt remote work was going better than expected as of April. An important concern about remote work was whether these early positive results would erode as businesses struggled to maintain company culture and onboard new workers, and as new challenges arose. However, as we argued in April, many of these top challenges were temporary and have improved with time.
To that end, we asked hiring managers to compare how remote work has been going for them now compared to earlier in the pandemic. The results showed that 68 percent of hiring managers say remote work is working better than when they first started working remotely. One third said it was working much better, while only five percent said it was working worse. The data is therefore consistent with problems fading as hiring managers realize the benefits of a distributed workforce.
It is also worth digging into why remote work is or isn’t going well. One factor that appears to contribute to remote work sentiment is related to how hiring managers personally feel about working remotely. The data shows that while all hiring managers are more likely to report remote work is working better than worse, those who personally dislike remote work view it more negatively.
In terms of what is working better than expected, respondents report a mix of factors. Some factors are beneficial to individuals, and other factors suggest higher overall productivity for businesses. For example, 70 percent report that the reduction of non-essential meetings has worked better than expected, and 44 percent report less distractions at the office. Both can be thought of as factors likely to contribute to higher productivity. As for benefits to individuals, there is increased schedule flexibility, no commute, and greater autonomy. This illustrates the benefits that remote work can provide to both businesses and professionals.
What This Means for 2021 and Beyond
Looking forward, the success that many companies have seen from remote work will impact their team structure both next year and in the future. In the shorter term, managers expect that 26.7 percent of their teams will be fully remote at this time in 2021. This suggests that although people will gradually return to the office, a significant share will remain remote in the near future.
Projecting farther into the future, the outlook for remote work remains strong as well. When asked about team estimates in five years, managers expect 22.9 percent of workers will be remote. This is nearly double the percentage of people that were working remotely full-time prior to the COVID-19 pandemic, which was only 12.3 percent.
To contextualize this number, in February 2020 we estimate around 19.5 million people were fully remote, but by 2025, this number will be closer to 36.2 million people. These numbers imply that 16.8 million additional workers will be fully remote in the long run.3 Furthermore, when you combine this with those working partially remote, it suggests that just over one third of workers will be working remotely at least some of the time in the long-run.
Remote Work is Expanding the Acceptance of Hybrid Teams
Another impact of remote work is that it will likely lead to an increase in demand for hiring remote freelancers. In the wake of the pandemic, there has been a significant increase in the demand for hiring remote freelancers on the Upwork platform. The survey suggests one explanation why: those who are most comfortable with remote work are also most likely to be engaged with freelancers. As businesses become comfortable working remotely, they are also overcoming one of the potential concerns of working with remote freelancer platforms.
Beyond anecdotal evidence, the relationship between being remote-friendly and engaging freelancers is clear in Future Workforce data. Businesses that hire freelancers were far more likely pre-pandemic to have a larger percent of their teams be fully remote workers than those who do not hire freelancers. This gap is even wider today, with businesses that hire freelancers at 52.1 percent remote compared to 38 percent for those that don’t.
Statistical analysis provides further evidence of the relationship. A 10 percent increase in the share of workers who are planned to be fully remote in the long-run associated with a 1.6 percent to 2.7 percent increase in the likelihood of hiring freelancers. The relationship is statistically significant even after controlling for a variety of other factors that could affect propensity to hire freelancers, including manager age, manager role at the company, firm size, and firm industry.
Furthermore, the relationship between whether a manager says they enjoy remote work has a strong relationship as well. If a manager says they enjoy or greatly enjoy remote work, this is associated with a 10 percent to 16 percent increase in the likelihood of working with freelancers, including after controlling for manager and firm factors.
Overall, whether managers are planning to stay remote and whether they personally enjoy working remote are associated with greater usage of independent professionals.
As the data continues to suggest, the impact of COVID-19 will have lasting implications for businesses and professionals. That businesses say remote work continues to be going better than anticipated and it’s even improved since the start suggests that businesses are learning that they have underestimated the potential benefits and perhaps overestimated the costs of working remotely. It, then, is no surprise that the future will include more remote and more hybrid teams beyond 2021 and for the long run.
The report was conducted by independent research firm ClearlyRated. This is the fifth year the survey has been conducted. This report uses survey data to understand the impact of remote work in response to COVID-19. More than 1,000 U.S. hiring managers were surveyed through a third-party, independent online sample between October 21, 2020 and November 7, 2020. Overall margin of error of ±3.01% at 95% confidence level.
1 It is worth noting that the BLS estimates only 21.2 percent are teleworking post-COVID, a much lower share. However, their estimate does not include those who were teleworking for reasons unrelated to COVID. Even this difference is unlikely to account for the full disagreement between the BLS and the Gallup, FWR, and Barrero et al results, which is an important question for future research. In addition, in contrast to other surveys, we find a much more modest decline in WFH from the peak.
2 Barrero, Jose Maria, Nick Bloom, and Steven J. Davisc. Why Working From Home Will Stick. working paper in progress, 2020.
3 This is applying the 10.6 percentage point change in the share fully remote (22.9% - 12.3% = 10.6%) to a total employment level of 158.8 as-of February, 2020, the last full month before the pandemic.