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Aug. 21, 2022, 9:00 a.m. EDT

‘Remote work is here to stay,’ says New York Federal Reserve

By Quentin Fottrell

Employees in the New York area who work from home are reluctant to give up the comforts of full-time remote work. 

Roughly 30% of service-sector companies’ employees are working remotely for an average of 3.3 days per week, suggesting that 20% of all work in the region’s service sector is now being done remotely — almost three times the percentage before the pandemic.

That’s according to the New York Federal Reserve’s August Business Leaders Survey, which is sent to a pool of 150 business executives, typically the president or chief executive officer. The survey usually gets approximately 100 responses.

“By contrast, only about 9% of the average manufacturing firm’s employees were working remotely for an average of 2.8 days per week, suggesting that about 7% of all work in the region’s manufacturing sector is still being done remotely — more than double the share before the pandemic,” authors Jaison R. Abel, Jason Bram, and Richard Deitz wrote in the report. 

“The rise in remote work has not led to widespread reductions in the amount of workspace being utilized by businesses in the region,” Abel, Bram and Deitz wrote. “Remote work is here to stay,” they added. 

“Looking ahead, this level of remote working is expected to decline only modestly, and only among service firms,” the New York Fed report also found. “Next year, service firms expect about 18% of work to be conducted remotely. Manufacturers already appear to have adjusted to a new normal of about 7% of manufacturing hours worked remotely.

(The Fed’s findings dovetail with a survey of 25,000 Americans by management consultancy McKinsey and polling firm Ipsos, which found that 58% said they had the opportunity to work at least one day per week, and 35% have the opportunity to work from home five days a week.)

Also see: How to handle the dreaded ‘return-to-work’ Zoom call with your boss

Workers tend to prefer not to go into the office on Fridays and Mondays, the New York Federal Reserve survey found. Tuesdays, Wednesdays and Thursdays were most popular for in-person work. A recent survey from the New York City Comptroller found similar patterns. In the second quarter of 2022, occupancy peaked at 47% on Tuesdays, and dipped to 35% on Mondays and 21% on Fridays.

That said, working from home is a luxury enjoyed by relatively few people. The Labor Department says only 7.1% of employees teleworked because of the pandemic in July, unchanged from June. More than one-third of “knowledge” workers — those who deal in information — returned to the office five days a week, according to Future Forum, a consortium launched by Slack that aims to put a digital workplace first.

McKinsey’s survey also found that higher paid, more educated workers had a greater opportunity to work from home. McKinsey concluded: ” Half of respondents working in educational instruction and library occupations and 45% of healthcare practitioners and workers in technical occupations say they do some remote work, perhaps reflecting the rise of online education and telemedicine.”

But it also warned that a shift to hybrid remote/office work will have “meaningful implications for the commercial core in big urban centers and for commercial real estate overall.” It added, “As technology emerges that eliminates the residual barriers to more distributed and asynchronous work, it could become possible to move more types of jobs overseas, with potentially significant consequences.”

The pandemic allowed people to take stock of the impact commuting and working was taking on their lives. Employee burnout and toxic work environments were catalysts for the Great Resignation, said Kokoro Robinson, vice president of talent acquisition at Velocity Global, a workplace management company. “We’ve had this idea for as long as we can remember about work-life balance. That’s changed. It’s now about life-work balance. There’s a big difference there.”

Learn how to shake up your financial routine at the Best New Ideas in Money Festival on Sept. 21 and Sept. 22 in New York. Join Carrie Schwab, president of the Charles Schwab Foundation.

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