Dec. 27, 2020, 10:42 a.m. EST

Will COVID-19 push more employees to work remotely after the pandemic? This economist says yes

A new Vanguard study quantifies the future of remote work, and looks at the number of potential hybrid jobs

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By Quentin Fottrell, MarketWatch


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’Work-from-home arrangements represent a sharp acceleration of a trend that was already under way before COVID-19.’

Millions of Americans have spent this year working from home, and employers have realized just how smoothly things can get done when they trust their staff to work remotely. But for those fortunate enough to work from home , will COVID-19 have a lasting effect on how we do our jobs? Or will millions of commuters return to cities if and/or when vaccines are made available?

A study released this month by Vanguard has shed some light on the future of work. “Work-from-home arrangements represent a sharp acceleration of a trend that was already under way before COVID-19,” said Joseph Davis, Vanguard global chief economist. “But the big question for the U.S. economy is how many jobs, and what types, could permanently become remote?”

“For example, if tech workers can just as easily do their jobs from home offices in Toledo or Tulsa or Topeka, do Silicon Valley firms need vast California campuses?” he said . “And what would that mean for businesses that rely on such a concentration of workers and for commuting patterns? What would it mean for real estate prices, both commercial and residential?”

Vanguard scored 41 tasks from 1,000 occupations tracked by the U.S. Department of Labor on a scale of 0 to 10 for remote-work potential. A score of “0,” for example, represents a task that cannot be accomplished remotely, while a score of “10” represents a task that can be performed 100% remotely, and with equal effectiveness.

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“Roughly 15% of all U.S. jobs could be conducted remotely,” Davis found. “It represents potentially over 20 million U.S. workers.” He included a conservative model: a 60% effectiveness threshold was deemed good enough to complete the task in each respective occupation. “A higher threshold would mean that fewer occupations and workers could permanently work remotely,” he added.

In November, long-term unemployed Americans hit 3.9 million, accounting for over a third of the total number of unemployed people in the U.S. Although the overall unemployment rate fell in November, the number of people who were unemployed for 27 weeks or more rose. The labor-force participation rate, which measures how many people are working or looking for a job, also fell.

The U.S. unemployment rate has fallen by 8 percentage points over the past seven months to 6.7%, according to government data, but Scott Ruesterholz, portfolio manager at Insight Investment, a London-based global-asset manager, said, “It will likely take over 12 months to return to 5% unemployment and substantially longer to return to the pre-crisis 3.5% level.”

“This report is a clear reminder that while the U.S. economy continues to recover, the road will be bumpy, especially until the widespread rollout of vaccines,” he said. “This reality underscores the importance of targeted fiscal stimulus to impacted businesses and workers to bridge the economy until a return to normality and limiting permanent scarring.”

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The “best jobs” in America in terms of job satisfaction, salary and job openings are also conducive to remote work. Front-end engineers had an average overall job satisfaction score of 3.9 out of 5 on Glassdoor’s “best jobs” list, making theirs the No. 1 profession for 2020, knocking data scientists off the No 1 spot. Front-end engineers develop the code that enhances users’ online experience.

Amanda Stansell, senior economic research analyst at Glassdoor, said there’s more competition between tech and non-tech companies for such roles. Google /zigman2/quotes/205453964/composite GOOG +1.10% , Aetna and Microsoft /zigman2/quotes/207732364/composite MSFT -0.36%  typically hire front-end engineers, but they are also increasingly in demand by any company that relies on a website for its business.

The list ranked java developer at No. 2, followed by data scientist (which previously held the No. 1 spot), product manager, devops engineer (which oversees code releases and the testing of new programs), data engineer, software engineer, speech language pathologist, strategy manager and business development manager.

In its own research, Glassdoor looked at perks that lead to an increase in employee satisfaction. That analysis concluded that flexibility played a key role. While workplace health insurance was the No. 1 perk, it was followed by generous paid vacation time and paid time off, pension plans, 401(k) plans, retirement plans, dental insurance and maternity and paternity leave.

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There has been progress on vaccines — which, assuming they work, could eventually bring people back to their place of work. BioNTech SE /zigman2/quotes/214419716/composite BNTX -2.16% and Pfizer /zigman2/quotes/202877789/composite PFE -0.55% said a final analysis of their vaccine candidate showed 95% efficacy, and rolled out their first deliveries on Monday. Meanwhile, Moderna /zigman2/quotes/205619834/composite MRNA +0.82%  said its own candidate was 94.5% effective. First vaccinations are expected to begin for the second vaccine in the U.S.

A vaccine candidate from AstraZeneca /zigman2/quotes/200304487/composite AZN +0.15%  and the University of Oxford is safe and effective and showed an average efficacy of 70% in a pooled analysis of interim data, according to a peer-reviewed study published last week. Efficacy was 62% for trial participants who received two full doses of the experimental vaccine, but increased to 90% among a subgroup of volunteers who received a half dose, then a full dose, according to data published in The Lancet .

The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -1.11% and S&P 500 Index /zigman2/quotes/210599714/realtime SPX -1.34%  etched out narrow gains on Christmas Eve as new viral strain overshadows fresh coronavirus aid. The Nasdaq Composite /zigman2/quotes/210598365/realtime COMP -2.11% lost ground as investors weighed the first COVID-19 vaccine rollout and the continuing efforts to introduce a second $900 billion stimulus bill.

/zigman2/quotes/205453964/composite
US : U.S.: Nasdaq
$ 2,049.09
+22.38 +1.10%
Volume: 2.12M
March 4, 2021 4:00p
P/E Ratio
35.93
Dividend Yield
N/A
Market Cap
$1376.11 billion
Rev. per Employee
$1.35M
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/zigman2/quotes/207732364/composite
US : U.S.: Nasdaq
$ 226.73
-0.83 -0.36%
Volume: 166,020
March 4, 2021 4:00p
P/E Ratio
33.77
Dividend Yield
0.99%
Market Cap
$1710.05 billion
Rev. per Employee
$877,393
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/zigman2/quotes/214419716/composite
US : U.S.: Nasdaq
$ 95.15
-2.10 -2.16%
Volume: 2.34M
March 4, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$22.91 billion
Rev. per Employee
$92,777
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/zigman2/quotes/202877789/composite
US : U.S.: NYSE
$ 34.20
-0.19 -0.55%
Volume: 45.45M
March 4, 2021 7:00p
P/E Ratio
20.00
Dividend Yield
4.56%
Market Cap
$190.75 billion
Rev. per Employee
$533,860
loading...
/zigman2/quotes/205619834/composite
US : U.S.: Nasdaq
$ 132.30
+1.08 +0.82%
Volume: 10.93M
March 4, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$52.89 billion
Rev. per Employee
$617,996
loading...
/zigman2/quotes/200304487/composite
US : U.S.: Nasdaq
$ 47.23
+0.07 +0.15%
Volume: 16.00M
March 4, 2021 4:00p
P/E Ratio
38.53
Dividend Yield
2.90%
Market Cap
$125.94 billion
Rev. per Employee
$352,484
loading...
/zigman2/quotes/210598065/realtime
US : Dow Jones Global
30,924.14
-345.95 -1.11%
Volume: 551.23M
March 4, 2021 5:08p
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/zigman2/quotes/210599714/realtime
US : S&P US
3,768.47
-51.25 -1.34%
Volume: 3.44B
March 4, 2021 5:08p
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/zigman2/quotes/210598365/realtime
US : U.S.: Nasdaq
12,723.47
-274.28 -2.11%
Volume: 6.68M
March 4, 2021 5:16p
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Quentin Fottrell is MarketWatch's personal-finance editor and The Moneyist columnist for MarketWatch. You can follow him on Twitter @quantanamo.

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