Analysis: Remote Work Bubble Begins to Pop
As the number of remote jobs declines, there’s likely to be a shift back to offices, at least in hybrid form. Shutterstock

Analysis: Remote Work Bubble Begins to Pop

At the pandemic’s three-year mark, many employees and employers are at odds over where work gets done.

Bubbles can be fun until reality intercedes and bursts them. Many Minnesotans can recall the tech stock bubble of the 1990s and the housing bubble in the real-estate market of the 2000s.

Early indicators suggest we might be witnessing a remote work bubble that’s being punctured by some employers who want their employees in the office—at least two or three days a week.

A recent Wall Street Journal article carried the headline, “The Job Market for Remote Workers Is Shrinking.” The Jan. 24 article reported: “Remote jobs made up 13.2% of postings advertised on LinkedIn last month—down from 20.6% in March. Other job sites such as Indeed.com and ZipRecruiter also report declines in remote listings.”

At the three-year anniversary of the pandemic, some employers are recognizing the erosion of their company cultures as well as diminished camaraderie of work teams because co-workers spend so little time together in person.

As Covid-19 began its spread across the United States in early 2020, it was a health imperative that white-collar employees work from home. They were granted the schedule flexibility that many had craved for years. People who liked to work independently, hated commutes, and had disdain for office small talk and internal politics felt freedom.

So when it came time to get vaccinated and return to the office, many people resisted. The hybrid model—splitting one’s time between work and home—became common ground in many workplaces. But what happens when the employer wants employees in the office three days a week and an employee is only willing to show up one day a week?

The workforce shortage provided employees with newfound leverage. If their employers didn’t grant them the schedules they wanted, they could simply leave and jump to new employers. That’s why the decline in remote work job postings is so intriguing. Once again, the employer-employee power dynamic may be shifting.

Misalignment of employer-employee needs

In the best workplace scenarios, an employee’s job responsibilities are challenging, the employee can use their talent to make major contributions to the employer, and the job allows the employee to earn a promotion and benefit from professional growth. When the substance of a given job aligns with the employer’s needs, both parties can see the benefits.

In the pre-Covid era, employers looked for employees who had talent and motivation and would fit culturally within an organization. There typically wasn’t a big debate over where work would get done. White-collar workers were based in offices, unless they had business travel locally, domestically, or internationally.

Now it’s much more difficult for employers and employees—across entire companies—to reach agreement about where employees work.

Gallup has been carefully tracking the remote work phenomenon. As of June 2022, Gallup reported that more than 70 million workers—about 56% of full-time employees in the U.S.—held jobs that could be done remotely. Among those “remote-capable workers,” five in 10 had hybrid schedules, three in 10 were exclusively working remotely, and two in 10 were entirely on-site at their workplaces.

When Gallup surveyed workers about where they prefer to work, 60% wanted a hybrid schedule, 34% wanted to exclusively work from home, and 6% preferred to be fully on-site in their workplaces.

If employers don’t satisfy employee wants over schedules, some portion of the employees will seek a better fit with another employer. In December, consulting firm Robert Half said that 46% of the 2,500 U.S. professionals it surveyed were looking for a new job or planned to do so in the first half of 2023.

While 61% wanted a new job to secure a higher salary, more than one-third—specifically 36%—indicated they wanted “greater flexibility to choose when and where they work.”

Rewarding in-person work experiences

As Covid-19 vaccines became available and medical treatments became more advanced, remote work moved from being a necessity to a convenience. The rapid embrace of hybrid schedules was a way for employers to demonstrate they would provide employees with the flexibility they wanted to create better work-life balance.

But scant attention—in the media and within many offices—was paid to people who enjoy going into an office or other form of workplace.

KFAN’s Dan Barreiro and Peggy Noonan, a Wall Street Journal political columnist, appear to have little in common.

But Barreiro, who doesn’t limit his radio show to sports topics, found a kindred spirit when Noonan decried the choice of millions of Americans to work from home rather than in their employers’ offices. Barreiro devoted a major portion of a show last summer to remote work issues raised by Noonan.

“I don’t want to see office life in America end,” Noonan wrote in her July 28 column. “Spirit, mission—they come from people and are established and imparted through being together, sharing a particular space, talking to each other spontaneously and privately, encouraging and correcting.”

Barreiro and Noonan, both baby boomers, have benefitted from long careers in which they felt the exhilaration of producing great work on deadline and in stressful situations. Barreiro excelled in print journalism—including as a Star Tribune sports columnist—and in broadcasting. Noonan came to national attention as a political speechwriter and later became a columnist and commentator. Through their face-to-face work, Barreiro and Noonan forged lifelong friendships with co-workers and built wide professional networks.

After the pandemic arrived in early 2020, KFAN management provided Barreiro with the equipment he’d need to broadcast his daily show from home. He confessed to his listeners that he elected to keep coming into the studios in St. Louis Park. Before vaccinations were available, Barreiro and his colleagues employed social distancing. They kept showing up in person because they didn’t want to sacrifice the camaraderie, humor, and high jinks that defined their workplace lives.

Barreiro said that he even enjoys his drive into the studio because it provides a transition time between home and work.

Many Twin Cities residents, especially in the winter, appreciate the ability to work from home because they can avoid long commutes. Barreiro grew up in an era when work and home were separated as were private and work lives. The pandemic and remote work have obliterated those distinctions.

Many employees have developed new habits of working. Before Covid-19, most employers had clear work rules and remote work was the exception. Has the pendulum of change swung too dramatically in one direction, when many workers prefer to spend all or part of their time working in isolation? Are digital and virtual communications sufficient to build good relationships with colleagues?

Best Buy case study

Richfield-based Best Buy offers a valuable case study. In 2005 it launched the Results-Only Work Environment (ROWE), which allowed corporate employees to decide when and where they worked. They weren’t required to regularly work in their headquarters. ROWE was created by two women change agents, Cali Ressler and Jody Thompson, when they worked at Best Buy.

In December 2013, the Star Tribune reported that CEO Hubert Joly was eliminating ROWE. Early in Joly’s CEO tenure, he was charged with turning around the struggling consumer electronics retailer. A Best Buy spokesman said that Joly wanted “all hands on deck,” which meant “having employees in the office as much as possible to collaborate and connect on ways to improve our business.”

Now a senior lecturer at Harvard Business School, Joly’s ideas have evolved about hybrid workplaces and employee motivation.

In a December 2021 interview in Harvard Business Review, Joly said Best Buy was in a precarious condition when he decided to get rid of ROWE. He wanted to quickly alter the company’s trajectory, and his management team was strongly divided over the efficacy of ROWE to achieve transformational results.

During the pandemic, Joly said, Zoom and Microsoft Teams have become effective video options for communicating within work teams. He noted that employees have shown they can be productive in remote and hybrid work settings.

Yet Joly emphasized an overarching question remains: How do we reinvent work?

He’s talked about unleashing the energy and passion of employees. In workplaces, he said in the interview, management’s aim should be to “help everybody at the company connect what drives them with their work and with the purpose of the company.”

Reinvention is occurring at Minnesota companies as they refine their approaches to hybrid workplaces. There won’t be a perfect workplace that meets everybody’s needs. Yet there appears to be one certainty: Most employers will continue granting their employees more flexibility than they had before the pandemic.

But there are many unknowns about how this historic work transformation will affect careers and companies five and 10 years from now.