Most businesses plan to stick to current work-from-home arrangements

Most businesses plan to stick to current work-from-home arrangements

By Jeffry Bartash

Remote work is a big plus when it comes to employee recruitment and retention, Fed study finds

Businesses want more employees to show up at the office, but they still plan to stick with current work-from-home arrangements for the foreseeable future.

That’s the chief finding from a new survey by the New York Federal Reserve Bank. The reason companies are content to keep doing what they are doing, the poll found, is that they want to stay fully staffed.

The chance to work partly or entirely at home is a big selling point when firms are competing for talent amid the worst labor shortage in modern times. The U.S. unemployment rate, now at 3.6%, is near a 55-year low, and a labor shortage could persist for years as long as no deep recession takes hold.

Most companies “reported positive impacts of remote work on employee retention, and roughly half noted that offering remote work helped with recruiting,” the New York Fed said.

The vast majority of people who work remotely are in service-sector jobs in fields like finance, communications and other white-collar professions. Service-sector companies say about 13% of their employees are fully remote while 19% were in a hybrid arrangement. Hybrid workers on average worked two days a week from home.

Taken together, fully and partly remote workers at privately run businesses could number as many as 36 million or more.

About 68% of private-sector employees are in-person only, the New York Fed found. That amounts to about 76 million, extrapolating from the government’s monthly employment data.

Other studies have found that 40% or more of the nation’s 23 million government workers, meanwhile, work from home.

If they had their own way, executives at service-sector companies told the Fed they would prefer about four-fifths of their employees to work fully on site.

Businesses say remote work has several downsides, including negative impacts on “workplace culture, cohesiveness, communication, and training and mentoringof employees.”

Businesses were split on whether remote work has improved employee productivity: Nearly 30% of respondents reported positive effects and 40% saw negative effects.

Almost all employees — 94% — of manufacturing companies worked on site. The production of goods such as cars, appliances, packaged foods and the like naturally can’t be done from home.

In any case, the coronavirus pandemic appears to have left a lasting mark on the U.S. workplace even though the crisis has ended. Fewer than two in 10 firms plan to require employees to spend more time at the workplace in the years to come.

-Jeffry Bartash

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08-19-23 1625ET

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