Remote Working Is Here to Stay

A new survey of Chief Information Officers conducted by Enterprise Technology Research says that the percentage of employees working remotely in 2021 will be double the level prior to the pandemic. CIOs expect 34% of their employees to be working remotely next year.(1) The CIOs say their companies have seen improved productivity from home-based workers, and that’s driving companies to encourage remote work.

There are a couple of important caveats about this finding.

  1. Only larger companies have CIOs, so the findings primarily apply to medium to large corporations. These companies now account for a majority of employees in the US.
  2. There’s the “all other things being equal” restriction. That is, the findings assume that nothing else happens that could disrupt remote work (new malicious technology or solar flares, for example).

If this projection becomes reality it will have major impact on several areas of the economy:

You can see change either as a loss or as an opportunity — your choice.
  • Prices for housing in major cities should drop, following the example of San Francisco, as people who no longer have to commute to work find less expensive places to live. The financial benefit of corporate payrolls and payroll taxes will be diffused across a much larger area, and communities will see less benefit from having large companies move into their area.
  • We’ll see more off-shoring of jobs that won’t necessarily be visible to either the public or government.
  • The value of commercial real estate drops. Companies will simply need less.
  • Companies will be more resilient against the next pandemic. If workers are already remote, a lot of the disruption that happened with Covid-19 this year won’t happen with the next one.
  • Gasoline consumption and pricing will decline with less driving. That may also make it more difficult for mass transit to operate profitably.
  • Apartments will need to be redesigned to include office space.

If we add a population decline to this picture, the near future is going to be quite different from what we expected.

Sources:

  1. https://www.insurancejournal.com/news/national/2020/10/26/587943.htm

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