The remote work revolution that never took off

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There was a time, in the thick of the pandemic, when major companies were scrambling to build fully remote work forces. New job titles cropped up for the people who were supposed to lead the transition – chief remote officer, head of remote, head of team anywhere – and there was talk of a revolution in the nature of work. The death of the office seemed near.

And yet, just under three years later, this sea change has failed to materialize on a large scale. Most countries emerged from pandemic lockdowns more than a year ago, and a rapid normalization ensued, especially in the realm of white-collar work. A growing body of data suggests a sharp decline in the proportion of workers across North America who work fully remotely, and a corresponding surge in the number of people who do hybrid work, meaning they split their time between home and office.

“Remote work – that is, working from home 100 per cent of the time – has moved from being a right of the employee, to a benefit or privilege offered by the employer. The pendulum has finally swung back in favour of the employer,” said Darryl Wright, a partner at EY Canada who advises companies on the future of work.

In January, 2022, roughly 24 per cent of workers did their jobs exclusively from home, according to Statistics Canada data, but by December, 2022, that proportion had declined to 16 per cent. In that period, the proportion of workers with hybrid arrangements rose from 3.6 per cent to 9.6 per cent. The agency has not collected data on hybrid versus remote work since last year. But other data sources suggest hybrid work has continued to displace fully remote work in 2023.

Nicholas Bloom, a Stanford University economist who researches work-from-home practices across the globe, said he believes that in the future roughly 30 to 40 per cent of workers – mostly managers and professionals – will work under hybrid models. A small group of workers will be fully remote, he said – maybe 10 per cent.

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Prof. Bloom and his colleagues at Stanford have been accumulating U.S. data on remote work since the start of the pandemic. Pre-COVID, the average American worker spent about 5 per cent of each year working from home. By mid-2020, that had surged to 60 per cent. But since late last summer the percentage of days employees spend working from home appears to have stabilized at 25 per cent.

Prof. Bloom’s data from April, 2023 – his most recent – shows that 58 per cent of American workers worked on-site full-time, almost 31 per cent had hybrid arrangements, and 11 per cent worked remotely all the time. In January, 2022, by contrast, 25 per cent were hybrid workers and 17 per cent worked fully remotely.

“The reason for the decline in fully remote is that the data and experience from firms is that for professionals and managers – basically most university graduates – hybrid seems to maximize productivity,” Prof. Bloom said.

A hybrid model can be useful for time management, he explained. On office days, a worker can attend meetings, presentations and lunches, while on home days they can do work that requires deeper concentration.

The shift from full-remote to hybrid is becoming apparent in job descriptions, according to Brendon Bernard, senior economist at the global job site Indeed.com. In April this year, 13.1 per cent of Canadian job postings mentioned some form of remote work, down slightly from 13.9 per cent in April, 2022. Both readings were far above the proportion before the pandemic, 4.1 per cent.

Darren Murph, the former head of remote at Gitlab and a well-known voice in the world of remote-work evangelists, said he believes full-remote work schedules are losing ground because organizations were not willing to invest in “remote fluency.”

“They didn’t hire a remote leader, they didn’t reassess their technology and they didn’t significantly evolve their business culture to decouple business results from physical location,” he said. “So in the absence of evolved operational prowess, reverting to old norms appeared to be the most viable option.”

Mr. Murph, who is now vice-president of workplace design and remote experience at Andela, a company that recruits talent for the software industry, said he doesn’t view the decline in remote work as a negative outcome. “It’s not a zero-sum game. More flexible options than ever before have emerged,” he said.

As hybrid work has become entrenched as the predominant style of white-collar work, it has given rise to significant tensions between employers and employees in certain workplaces. In late April, federal public servants went on a two-week strike to demand not just higher wages, but also language in a new collective agreement that would have given them the right to raise formal objections over being forced to return to their offices. The Public Service Alliance of Canada, which represents the workers, ultimately made peace with Ottawa by agreeing to a policy outside the collective agreement that lets members negotiate remote work individually.

Employers are pushing back against fully remote work in part because they are concerned about an erosion in the culture of the workplace, according to Mr. Wright, the EY consultant. “There’s definitely a sharp difference between the way employees and employers view remote work. Employees tended to find that workplace culture had improved with remote work, whereas employers felt that the culture had gotten worse.”

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Dave McKay, the chief executive of Royal Bank of Canada, has been a particularly outspoken advocate of a full return to the office. In an earnings call in March, he lamented the “struggle” companies are facing to “balance talent, build culture and foster productivity.” His solution was for employees to be back in the office more often. (Most RBC employees work in their offices two to three days a week.)

Long leases on office real estate remain a burden for many organizations, Mr. Murph said. He said he is convinced that this is a big part of the push for employees to return to in-person work. “This is the workplace’s version of legacy tech debt,” he said. “Organizations without this obstacle are more inclined to build for the future.”

Prof. Bloom’s data suggest that pushing employees to work from the office almost all the time, or even four days a week, will be a tough sell. The gap between how much employees want to work from home and how much employers want them to work from home has stabilized at about 0.5 days. Employees would like to spend closer to three days working from home, and employers would prefer them to spend just two.

Managing today’s work force is tricky, said Helena Pagano, the chief human resources officer at Sun Life Financial Inc. Her department eventually started to notice a rise in mental-health issues among workers who were fully remote.

“Our people were missing those micro-moments of interaction with colleagues,” she said.

But, she added, there have also been gains. “When people gave up their commute time, we found that they allocated 40 per cent of that time to company work and 60 per cent to wellness,” she said. “That’s a win-win.”