Over the past few years, many of the world’s top companies have reduced or eliminated the option to work from home. Bank of America, IBM and Aetna all made news over their decision to change course.
But are they trendsetters or outliers? A look at the data points to the latter.
Every year since 2005, the share of full-time employees working primarily from home has increased. Looking at white-collar occupations only, the significance of this upward trend becomes quite visible.
Between 2010 and 2017, 16 percent of all white-collar jobs added to the economy were filled by workers primarily working from home. And that number is conservative because it excludes those who worked part-time, self-employed workers and workers who telecommuted only part of the workweek.
Not surprisingly, some occupations better lend themselves to working from home than others. As the chart illustrates, computer- and mathematics-related occupations have experienced the fastest growth.
Blue-collar and low-pay service workers, as one might expect, have experienced the lowest share of teleworking. Technology has yet to reach a point where you can phone into a construction site.
What accounts for the rise in telecommuting?
Much of the increase lies in the changing nature of work itself. Advanced technologies enable seamless remote working from anywhere in the world and at any time of the day. Moreover, younger generations of employees want more flexibility than their elders.
From a financial perspective, many companies see reduced office space cost as a key benefit of letting their employees work from home.
But in recent years, a new factor has moved the teleworking trend into the fast lane: labor shortages. In this economy, the number of available jobs far exceeds the number of available workers. This can make recruiting and retaining workers a momentous challenge.
Hiring teleworkers can reduce labor shortages through two main channels. First, it expands the available talent pool to include those who cannot or do not want to work away from home (caregivers and those with disabilities, for example).
Second, employers are no longer geographically restricted. There is a good chance that your company employs IT workers or web developers who work remotely, some of whom may be overseas.
Does working from home help or hurt productivity? Its continuous rise suggests that many companies believe worker productivity does not suffer. In fact, eliminating the daily commute to and from work should allow employees to spend a larger share of their day on the job.
But teleworking is not for everyone. First, for many workers, such as surgeons and kindergarten teachers, physical presence is necessary and will remain necessary for the foreseeable future.
Second, so much communication is nonverbal. Emails, audio and even video cannot completely replace in-person communication. In creative jobs that require close interaction with colleagues, like research and development, working from home can hinder success, not help it.
Decisions to allow for teleworking differ among companies, but generally, the following determinants seem to increase the probability of teleworking:
- the ability to accurately monitor the employee;
- the frequency of travelling (more days on the road means fewer days at the office and no need for a permanent office space);
- the comfort of the typical employee with advanced remote working technology;
- the need for a quiet working space;
- the independence of the task; and
- the reduced importance of sitting with colleagues in the same physical space.
As with any technological and organizational change, the full implementation of teleworking arrangements could take decades as it becomes more of an accepted norm rather than a privilege or oddity.
We expect the legions of white-collar teleworkers to continue expanding as technology improves and labor markets tighten even more. As employers become savvier in managing teleworkers, we also expect companies to make better decisions regarding where teleworking works and where it does not.