The Pros and Cons of Corporate America’s Remote Work Trend
Post-pandemic, will everyone go back to the office like nothing ever happened? Will lost jobs be recovered? Or is remote work and skeleton staffing a trend here to stay?
A recent survey of company leaders revealed that eight in 10 plan to allow employees to work outside the office at least part-time going forward. Nearly half (47%) say they’re going to permit employees to work from home full time. In a separate confirmation of this trend, 78% of CEOs agree that remote collaboration is here to stay.1
However, pre-COVID-19, many industries, and companies had been reluctant to change to remote staffing models, citing challenges in managing a remote workforce, among other concerns.2 Certainly, there are pros and cons to allowing full-time personnel to work from home. However, it seems it took a pandemic to catapult this phenomenon into a feasible platform.
So here we are. As inconvenient as working from home may be for some, work seems to be getting done. What does this mean for shareholders of companies affected by a remote workforce? It all depends on which types of companies we’re talking about. On the one hand, the need for less office space, supplies and equipment offers cost-cutting measures that can improve profit margins. To wit, companies such as Google, Facebook, and Twitter have announced they will continue some version of a long-term or permanent work-from-home staffing model in the future.3
On the other hand, businesses that support the normal work-a-day office environment are experiencing a decline in revenues. We’re talking about downtown coffee shops, cafes, dry cleaners, shoe repair shops, gyms, food carts, florists, and pharmacies. Some of the “mom-and-pop shops” may have already gone out of business. Commercial real estate has taken a hit. 4
Looking forward, it may be worth evaluating your investment portfolio to help ensure you have a diversified mix of companies that can profit from remote work staffing, or at least should not be significantly hurt by it. Remember that we are always available to conduct a portfolio review and advise you on ways to adjust to suit your circumstances.
An interesting twist to the remote work model is that it could be a boon for rural America. Small cities and towns have been hard-hit by automation and the offshoring of jobs, plus they tend to recover more slowly from economic downturns. The rising trend for remote workers offers a way to populate and infuse more wealth into rural areas of the country.5
Content prepared by Kara Stefan Communications.
1 Emily Courtney. FlexJobs. Dec. 21, 2020. “Remote Work Statistics: Navigating the New Normal.” https://www.flexjobs.com/blog/post/remote-work-statistics/. Accessed Jan. 11, 2021.
2 Nigel Davies. Forbes. March 10, 2020. “This Is Why Employers Are Still Denying Your Remote Working Requests.” https://www.forbes.com/sites/nigeldavies/2020/03/10/this-is-why-employers-are-still-denying-your-remote-working-requests/?sh=1b5031e26bcd. Accessed Jan. 25, 2021.
3 Derek Thompson. The Atlantic. Aug 6, 2020. “The Workforce Is About to Change Dramatically.” https://www.theatlantic.com/ideas/archive/2020/08/just-small-shift-remote-work-could-change-everything/614980/. Accessed Jan. 11, 2021.
4 Steve LeVine. Marker. Sept. 1, 2020. “Remote Work Is Killing the Hidden Trillion-Dollar Office Economy.” https://marker.medium.com/remote-work-is-killing-the-hidden-trillion-dollar-office-economy-5800af06b007. Accessed Jan. 11, 2021.
5 Alex Wittenberg. Bloomberg. July 23, 2020. “The Economics of Remote Work.” https://www.bloomberg.com/news/articles/2020-07-23/the-effect-of-remote-work-on-america-s-economy. Accessed Jan. 11, 2021.
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