The discussion in the office is over. In some ways, working from home is here to stay.
Nick Bloom, an economist at Stanford University who is a so-called “leading expert” on this issue, says:Bloom recently appeared on new york magazine Podcast “Pivot”is hosted by journalist Kara Swisher and New York University professor Scott Galloway as part of a four-part series dedicated to the future of work.
According to Bloom, the battle for remote work for just one or two days a week has been won simply because it benefits companies. “So that’s the bottom line,” Bloom told Swisher and Galloway. “We live in a capitalist economy.”
This is profitable, firstly, because it does not affect performance and has actually been proven to significantly reduce employee turnover. Turnover is a much more expensive phenomenon than giving annual raises to existing employees.
In fact, a fully remote setup is the most cost-effective, as company leaders don’t have to pay for an office at all. As always, Bloom is quick to point out the folly of the idea that everyone has to meet in person just for a reason. “Imagine that typically in this setup, back office staff are responsible for human resources, payroll, data entry, etc. You have to pay for office space for them, but you don’t have to pay for office space nationally or We can employ them globally,” he said. “In either case, going hybrid or fully remote is really beneficial for companies.”
That does not mean that this victory has been officially recognized by all companies. About 60% of U.S. workers, mostly in essential services like health care, retail, and manufacturing, are working fully in-person. According to Bloom’s calculations, the remaining 30% are hybrid and the remaining 10% are fully remote, mostly back-office employees.
Mr. Bloom was challenged by Mr. Galloway, an avowed member of the pro-Office faction.
“My sense is that with COVID, pretty much everything has returned to normal except for this,” Galloway said. “I think there’s going to be a huge transfer of trillions of dollars of value from commercial real estate to residential real estate. I think for people under 30, this is a disaster.”
Galloway is not alone in characterizing young workers logging in from home. Goldman Sachs CEO David Solomon called remote work an “extraordinary situation.” JPMorgan Chase CEO Jamie Dimon said he believes remote work simply “doesn’t work” for new employees and their bosses. And Elon Musk claimed that remote workers were just pretending to work.
“We don’t like to talk about it, but [but] Relationships start at work, and young people need socialization,” said Galloway, and these CEOs likely agree. “This has a really negative impact on young people’s relationships and even their mental health.”
Mr. Bloom disputed this, telling Mr. Galloway that a class of 50 undergraduates at Stanford University recently revealed a clear gulf in their desires. “Half of them want to work from home zero days a week because they want to be mentored, socialized and get out of their small apartment.”
Bloom added that about a third of people want to work completely remotely, but most people across generations and industries want to be in the office two or three days a week. . “They want to learn and they want to socialize, but they just don’t want to go five days a week,” he says. “That’s where you end up struggling.”
As a result, Bloom said, “winter has come for commercial real estate.” With fewer and fewer people going to the office five days a week, most metropolitan areas are falling victim to the so-called “doughnut effect” of hollowing out cities and intensifying suburbs. “The center is softer, but the edges are much better.”
Bloom said it was in companies’ best interest to find an effective sustainable hybrid plan, otherwise they would be left completely alone. As he has stated in the past, even if the rate of remote work plateaus this year and next (as it has for the past two years), there will be a gradual and sustained adoption, or Nike spike, by 2026. He predicts that.
“It’s something like [score of the] The past three years have been three years of working from home. There is zero return to the office,” Bloom said last summer. “This is not a game that RTO is winning.”
