Technological change means that working from home won’t disappear when the virus does.
Amid the Covid-19 global pandemic, remote work (or telework) has gone from an optional perk to an essential capability. While remote work’s short-term benefits are obvious, there is also a long-term case to be made for it that does not depend merely on its role in reducing the spread of disease. Remote work should not necessarily be set aside once the pandemic subsides.
In a two-year internal study, Google concluded that the performance of remote and co-located teams showed no significant differences. A 2019 study at the U.S. Patent and Trademark Office found remote patent examinersmoreproductive than co-located ones. And a study of Portuguese research-and-development firms from 2011 to 2016 found that enabling remote work increased labor productivity.
7.9 percent of those earning more than $75,000 yearly work off-site.
A 2019 survey commissioned by Upwork and the Freelancers Union found that including such alternative work sites raises the share of remotes to roughly one in ten; including those who work remotely some of the time increases the percentage to about one in three.
An Upwork survey found that 40 percent of 18- to 34-year-old small-business principals planned to hire full-time remote workers, compared with just 10 percent of principals aged 50 and older.
Nowadays, cameras and microphones are getting better, broadband Internet is widely available, and screens are larger and high-definition. High-quality video streaming is accessible across multiple platforms. What does direct interaction offer that can’t also be had with video calls?
The challenge with video communication is the many minor interactions that go on in a typical workday. When everyone is situated in the same office, lots of low-cost opportunities exist for the exchange of low-value information—you can ask someone in the hallway a quick question, or bounce an idea off a person, or pop your head into a colleague’s office to get advice. Initiating a video call for similar discussions seems awkward. While video communication largely solves the problem of communicating complex high-value information, the absence of low-stakes interactions can lead to gaps in information—and those can add up. Moreover, low-stakes conversations, which may not even relate directly to work, are probably very important in building trust among employees.
But in recent years, the problem of low-stakes communication has been solved to some degree by a communications strategy that owes most of its utility to distributed innovation among users: text-based messaging. Text solves a transaction cost associated with videochat, which requires the communicating parties to stop whatever they’re doing and give full attention to the conversation.
In Google’s study, employees insisted that face-to-face meetings at the outset of a project led to a substantial boost in efficiency. The evidence on whether this belief is well justified is mixed: for example, another 2016 study found that randomly paired undergraduates who met face-to-face and over videochat had no differences in affiliative feelings. But even if face-to-face does matter, that doesn’t mean that everyone must live in the same city. The trust built in a face-to-face meeting is remarkably durable.
One of the primary advantages of living in or of running a business in cities is the presence of thick labor markets. If you have niche skills or niche needs, it’s easier to find a good match in a big market, which pushes firms and employees to cluster together in cities. The increasing ease of remote work erodes this advantage. After all, a remote worker potentially can apply for positions anywhere in the country, and a business can draw on a labor market national in scope. For this to work, though, the employee and employer need to be able to find each other.