Covid-era alternative working solutions have come under fire as companies increasingly take a carrot-and-stick approach to convincing employees to return to offices.
Metaplatforms of the technological titan (GOAL) – Get a free report, which owns Facebook, threatened poor performance reviews if workers did not attend offices three times a week. JPMorgan Chase (JPM) – Get a free report CEO Jamie Dimon recently suggested that workers who are uncomfortable returning to offices should seek employment elsewhere.
Workers don’t like the idea of giving up the flexibility that remote work offers, but a recent survey shows that these workers may face an uphill battle if they hope to continue working from home.
Remote work loses its shine
Companies large and small were quick to offer flexible alternative work schedules, such as remote and hybrid working, during Covid. Remote work quickly became a key benefit used to fill jobs created by early retirees and newly created positions in response to demand growth fueled by easy-money policies.
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Initially, remote work seemed beneficial for companies and employees. It allowed companies to search for job candidates nationally rather than locally and sometimes save money by closing expensive offices. Meanwhile, workers could live in the suburbs instead of crowded cities and save money by eliminating costly childcare costs.
Unfortunately, the love affair with remote work has soured over the past year.
Companies from technology to financial services have reversed remote work, citing the need for greater collaboration and increased productivity. Many companies have likely tried to reduce the number of remote workers as part of layoff plans or to fill office spaces that would otherwise be vacant.
Companies are winning the battle to return to the office
Worker surveys suggest that employees prefer remote work. However, they are losing the battle with employers who demand more face-to-face time in the office.
The latest from the Census Bureau Household Pulse Survey shows that remote work has hit a new post-pandemic low, with declines seen in all 50 states, Bloomberg reports.
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The survey showed that less than 26% of households include someone who works remotely at least one day a week. That’s a significant drop from the peak of 37% in 2021. A total of 31 states had remote work rates above 33% at their peak. Now, only seven states clear that hurdle.
The states with the highest percentages of remote workers are typically Democratic states, primarily on the East and West coasts. Central and South America have some of the lowest rates of remote work.
There is also a more significant push for return to offices (RTO) in major metropolitan markets where office building valuations are falling due to vacant offices. During its recent quarterly conference call, Goldman Sachs (G.S.) – Get a free report told investors it had reduced valuations of office properties in its portfolio by 50%.
The impact of lower valuations on financial firms could contribute to stricter back-to-office demands. Large banks like JP Morgan have been among the most vocal in demanding RTO, and they are also heavily exposed to commercial real estate.
For example, in addition to commercial property lending, JP Morgan is building a new multimillion-dollar headquarters in New York City.
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