Get Used To It: Remote Work Is Here To Stay

Get Used To It: Remote Work Is Here To Stay

Following on from last week’s Creview (Remote work or office absence), we rummaged through our “read-later pile” and found a Stanford Institute for Economic Policy Research team’s (Jose Maria Barrero, Nicholas Bloom and Stephen Davis) report titled “The Evolution of Working from Home”.

There are 3 groups of employees; fully-on-site (~60%), hybrid (~30%) and fully-off-site (~10%). These are figures from the US.

In the US, working from home (share of days per week) increased from 0.4% in 1965 to 5% in January 2020. The pandemic forced a spike and different studies show that the figures for WFH / remote are converging to around 25% in 2023. This is based on workplace mobility being down 25%.

According to the study, Australia’s workplace mobility is down only 9%. Are we more tethered to our desks or is it that we have a higher proportion of fully-on-site employees? Walk around Sydney CBD or Melbourne CBD on any day and it feels a lot more than 9%. Whatever that real number, remote work is here to stay.

As everyone knows, “the pandemic generated both a one-off jump and a longer-run growth acceleration in working from home.” Improving technology was the driving force and shall be for the coming decades. That means CRE space decisions are going to have to be based on the future – not what it was in 2019. Driving factors influencing where people work include technology adaptability, education, gender, age, and number of children of employees. And of course, location is still a primary driver. Only when all of these factors are taken into account, shall we see the true impacts of out-of-office working on the office markets.