One of the most noted trends during the COVID years has been the explosion in people working from home. In the early part of the pandemic, anybody who could possibly work from home was required to do so, especially if they weren’t deemed to be essential.
Manhattan office buildings were left virtually unattended. Lawyers and judges discovered Zoom. Even many doctors began seeing patients remotely. Was the office dead? Commercial real estate forever changed? Worse yet, would the prices of upscale condos collapse as their occupants discovered that they could indeed be productive from the cabin in Montana?
The reality is that the trend towards working from home was not caused by COVID, but it was certainly accelerated. Thirty years ago, just under 3% of the workforce did so from a home base. The majority were farmers, remote service employees, and the occasional misfit – or as I now proudly say, early adopters.
Back in the mid-1990’s, the AGS corporate headquarters was a centrally located complex with mountain views. By centrally located, we mean that it was a desk which was built into a half-wall separating the family room from the kitchen in a classic Southern California style backsplit. It checked all the boxes as a headquarters location. Our neighborhood was one of the first to get the new fiber-optic service, and the coffee machine was located just a few steps from my desk. The server closet was a converted wet-bar and I personally installed the very important CAT-5 network backbone by taking on the wildlife residing underneath the raised part of the foundation.
The problem occurred when I would be on a call with a potential client at precisely the time that my kids came home from school, which not surprisingly coincided with the barking of dogs. You don’t work at home, do you? Of course not, today is bring your dog to work Tuesday. Twenty-five years ago, professionals didn’t work from home if they expected to be taken seriously.
Leap ahead twenty-five years, and if you come up on Zoom and it looks like an office? Oh, you poor thing, do you have to commute into work every day? Spouses, kids, cats, and dogs and even the occasional bird regularly make guest appearances on calls. As long as you are not wearing pajamas or worse, all is well, and your professional reputation is intact. If anything, it is probably enhanced.
The latest ACS release estimates that 7.3% of the labor force works from home, up from 4.3% in 2010. Since Manhattan has been in the news, we chose to map percentage change in working from home at the census tract level, and looked at 1990 and 2021:
What employees are working from home? In 1990 there was virtually no statistical association between the percent working from home and either the type of occupation or median household income. Both correlations have grown steadily since then, and it is clear that most of the increase is due to higher income white collar workers in the upscale areas of Connecticut, Long Island, and suburban New Jersey.
The trend towards working from home will undoubtedly continue, since much of the administrative work of the world is now cloud based and can be done anywhere. However, there are several reasons why we think that the trend might be limited once the pandemic effects are gone –
- Continuity and training may suffer over the longer term: how does a company efficiently train its existing staff to do jobs which are being done remotely?
- Corporate culture: Much of the culture of a company comes through interaction between employees, which is often difficult with remote workers.
The hybrid approach – where employees work at home some days and come to the office at least once or twice a week, may prove to be the most satisfactory in the long term.
And AGS? We have never had an office and probably never will, as we have long settled into a set of routines which encourage communication and interaction. And we aren’t embarrassed any more when the dogs offer unsolicited advice during a meeting, and we don’t have bring your dog to work Tuesday anymore. Oh, and I am always appropriately attired.