RTO? WFH? Why post-Covid work norms are so confusing

AS THE Covid pandemic fades into the past, many things have returned to normal. The world of work has not. Companies, employees and governments are still figuring out how to adapt to lasting changes to corporate life sparked by widespread lockdowns that put millions onto a Work From Home (WFH) schedule. At stake worldwide aren’t just norms for office life but the economic health of big cities as well, particularly in the United States. 

1. What’s been happening? 

The so-called Return to Office (RTO) has not played out evenly across continents, industries or types of work, creating patchwork patterns within countries as well as around the globe. Rates of remote work stayed higher in the US as the pandemic eased than in other regions, but even there more than half of American workers toil in settings such as factories, restaurants or stores where it’s not an option. In some sectors, a slowdown in hiring from the frenetic pace of 2021 appears to be giving bosses who want workers back in the office more leverage.

2. What are the regional variations? 

As measured by office occupancy, the highest rates of RTO were found in Asia, where levels of Covid infection remained low in 2020 and 2021, meaning fewer people spent long periods working remotely. Europe was close behind, while the Americas lagged, a reflection of the widespread adoption of hybrid schedules by white-collar workers there. Using a broader measure, paid full days worked at home, English-speaking nations have topped the global list, with the UK reporting one of the highest rates of remote work. France had one of the lowest.

3. Why the differences? 

Workers in Europe and Asia appear to be more concerned about missing out on social connections than Americans. In Germany, 43 per cent of the workforce spends four days a week or more in the office, according to a survey by workplace design firm Unispace. China’s high rates of office attendance are attributable in part to its so-called 996 culture, which refers to a norm in some fields of working from 9 am to 9 pm, six days a week. Loyalty to employers is also more steadfast in places such as Japan and South Korea than, say, in the US. And the US has a higher proportion of so-called knowledge workers able to log in from anywhere.

4. Is it all about geography? 

No. Women place a higher average value on working from home than men do in all but a few countries, according to Stanford University economics professor Nicholas Bloom. The same is true for those with more education. And some trends reflect specific work cultures: Wall Street banks have pushed hard to get workers into the office for three days every week or more, while Japan’s largest lenders haven’t.

5. Has there been conflict over RTO?

In the US in particular, there’s been a steady push and pull between employers and employees. During 2023, many companies gradually upped their RTO requirements; over one million workers faced tougher new policies that took effect after Labor Day, the traditional end of summer vacation season. Workers staged public protests against the policies at companies including Amazon.com, Starbucks and Disney. But the number of households with someone working remotely fell to 26 per cent by the start of October, from 37 per cent in early 2021, according to Census Bureau data.  

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6. What rights do workers have over remote work?

Enforceable legal rights to work remotely are scarce, but in Europe, policymakers have taken steps to promote more flexible arrangements. In April 2023, a law went into effect in Ireland that requires employers to consider employee requests to work remotely based on both parties’ needs. If employers say no, they must provide reasons in writing. The UK adopted a similar measure that will take effect in 2024, while Dutch legislators rejected the idea.

In the US, the government has not taken a stand, but workers suing for the right to work remotely as a “reasonable accommodation” under the Americans With Disabilities Act have succeeded more often since the pandemic arrived than before. According to a Bloomberg Law analysis, employees won about 40 per cent of such cases in federal court in the two years before July 2023, up from about 30 per cent in a two-year period before the pandemic.

7. What’s the impact of these shifts? 

The effects on productivity are hotly debated but still unclear, and some labour experts argue that any possible gains for employers could be offset by a drop in worker retention rates. The shifts have, without question, upended the commercial real estate market, where empty offices and the fastest pace of interest-rate hikes in a generation are leading to a debt crisis among some landlords.

A McKinsey report in July 2023 estimated that between US$800 billion and US$1.3 trillion may be wiped out from the value of office buildings in what it called the world’s nine superstar cities, with San Francisco and New York being hardest hit. BLOOMBERG