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Americans are embracing flexible work—and they want more of it

When the COVID-19 pandemic shuttered workplaces nationwide, society was plunged into an unplanned experiment in work from home. Nearly two-and-a-half years on, organizations worldwide have created new working norms  that acknowledge that flexible work is no longer a temporary pandemic response but an enduring feature of the modern working world.

About the survey

This article is based on a 25-minute, online-only Ipsos poll conducted on behalf of McKinsey between March 15 and April 18, 2022. A sample of 25,062 adults aged 18 and older from the continental United States, Alaska, and Hawaii was interviewed online in English and Spanish. To better reflect the population of the United States as a whole, post hoc weights were made to the population characteristics on gender, age, race/ethnicity, education, region, and metropolitan status. Given the limitations of online surveys, 1 “Internet surveys,” Pew Research Center. it is possible that biases were introduced because of undercoverage or nonresponse. People with lower incomes, less education, people living in rural areas, or people aged 65 and older are underrepresented among internet users and those with high-speed internet access.

The third edition of McKinsey’s American Opportunity Survey  provides us with data on how flexible work fits into the lives of a representative cross section of workers in the United States. McKinsey worked alongside the market-research firm Ipsos to query 25,000 Americans in spring 2022 (see sidebar, “About the survey”).

The most striking figure to emerge from this research is 58 percent. That’s the number of Americans who reported having the opportunity to work from home at least one day a week. 1 Many of the survey questions asked respondents about their ability or desire to “work from home.” “Work from home” is sometimes called “remote work,” while arrangements that allow for both remote and in-office work are often interchangeably labeled “hybrid” or “flexible” arrangements. We prefer the term flexible, which acknowledges that home is only one of the places where work can be accomplished and because it encompasses a variety of arrangements, whereas hybrid implies an even split between office and remote work. Thirty-five percent of respondents report having the option to work from home five days a week. What makes these numbers particularly notable is that respondents work in all kinds of jobs, in every part of the country and sector of the economy, including traditionally labeled “blue collar” jobs that might be expected to demand on-site labor as well as “white collar” professions.

About the authors

This article is a collaborative effort by André Dua , Kweilin Ellingrud , Phil Kirschner , Adrian Kwok, Ryan Luby, Rob Palter , and Sarah Pemberton as part of ongoing McKinsey research to understand the perceptions of and barriers to economic opportunity in America. The following represents the perspectives of McKinsey’s Real Estate and People & Organizational Performance Practices.

Another of the survey’s revelations: when people have the chance to work flexibly, 87 percent of them take it. This dynamic is widespread across demographics, occupations, and geographies. The flexible working world was born of a frenzied reaction to a sudden crisis but has remained as a desirable job feature for millions. This represents a tectonic shift in where, when, and how Americans want to work and are working.

The following six charts examine the following:

• the number of people offered flexible working arrangements either part- or full-time
• how many days a week employed people are offered and do work from home
• the gender, age, ethnicity, education level, and income of people working or desiring to work flexibly
• which occupations have the greatest number of remote workers and how many days a week they work remotely
• how highly employees rank flexible working arrangements as a reason to seek a new job
• impediments to working effectively for people who work remotely all the time, part of the time, or not at all

Flexible work’s implications for employees and employers—as well as for real estate, transit, and technology, to name a few sectors—are vast and nuanced and demand contemplation.

1. Thirty-five percent of job holders can work from home full-time, and 23 percent can do so part-time

A remarkable 58 percent of employed respondents—which, extrapolated from the representative sample, is equivalent to 92 million people from a cross section of jobs and employment types—report having the option to work from home for all or part of the week. After more than two years of observing remote work and predicting that flexible working would endure  after the acute phases of the COVID-19 pandemic, we view these data as a confirmation that there has been a major shift in the working world and in society itself.

We did not ask about flexible work in our American Opportunity Survey in past years, but an array of other studies indicate that flexible working has grown by anywhere from a third to tenfold since 2019. 1 Rachel Minkin et al., “How the coronavirus outbreak has—and hasn’t—changed the way Americans work,” Pew Research Center, December 9, 2020; “Telework during the COVID-19 pandemic: Estimates using the 2021 Business Response Survey,” US Bureau of Labor Statistics, Monthly Labor Review, March 2022.

Thirty-five percent of respondents say they can work from home full-time. Another 23 percent can work from home from one to four days a week. A mere 13 percent of employed respondents say they could work remotely at least some of the time but opt not to.

Forty-one percent of employed respondents don’t have the choice. This may be because not all work can be done remotely  or because employers simply demand on-site work. Given workers’ desire for flexibility, employers may have to explore ways to offer the flexibility employees want  to compete for talent effectively.

2. When offered, almost everyone takes the opportunity to work flexibly

The results of the survey showed that not only is flexible work popular, with 80 million Americans engaging in it (when the survey results are extrapolated to the wider population), but many want to work remotely for much of the week when given the choice.

Eighty-seven percent of workers offered at least some remote work embrace the opportunity and spend an average of three days a week working from home. People offered full-time flexible work spent a bit more time working remotely, on average, at 3.3 days a week. Interestingly, 12 percent of respondents whose employers only offer part-time or occasional remote work say that even they worked from home for five days a week. This contradiction appears indicative of a tension between how much flexibility employers offer and what employees demand .

3. Most employees want flexibility, but the averages hide the critical differences

There’s remarkable consistency among people of different genders, ethnicities, ages, and educational and income levels: the vast majority of those who can work from home do so. In fact, they just want more flexibility: although 58 percent of employed respondents say they can work from home at least part of the time, 65 percent of employed respondents say they would be willing to do so all the time.

However, the opportunity is not uniform: there was a large difference in the number of employed men who say they were offered remote-working opportunities (61 percent) and women (52 percent). At every income level, younger workers were more likely than older workers to report having work-from-home opportunities.

People who could but don’t work flexibly tend to be older (19 percent of 55- to 64-year-olds offered remote work didn’t take it, compared with 12 to 13 percent of younger workers) or have lower incomes (17 percent of those earning $25,000 to $74,999 per year who were offered remote work didn’t take it, compared with 10 percent of those earning over $75,000 a year). While some workers may choose to work on-site because they prefer the environment, others may feel compelled to because their home environments are not suitable, because they lack the skills and tools to work remotely productively, or because they believe there is an advantage to being on-site. Employers should be aware that different groups perceive and experience remote work differently and consider how flexible working fits with their diversity, equity, and inclusion strategies .

4. Most industries support some flexibility, but digital innovators demand it

The opportunity to work flexibly differs by industry and role within industries and has implications for companies competing for talent. For example, the vast majority of employed people in computer and mathematical occupations report having remote-work options, and 77 percent report being willing to work fully remotely. Because of rapid digital transformations across industries , even those with lower overall work-from-home patterns may find that the technologists they employ demand it.

A surprisingly broad array of professions offer remote-work arrangements. Half of respondents working in educational instruction and library occupations and 45 percent of healthcare practitioners and workers in technical occupations say they do some remote work, perhaps reflecting the rise of online education and telemedicine. Even food preparation and transportation professionals said they do some work from home.

5. Job seekers highly value having autonomy over where and when they work

The survey asked people if they had hunted for a job recently or were planning to hunt for one. Unsurprisingly, the most common rationale for a job hunt was a desire for greater pay or more hours, followed by a search for better career opportunities. The third-most-popular reason was looking for a flexible working arrangement.

Prior McKinsey research has shown that for those that left the workforce during the early phases of the COVID-19 pandemic, workplace flexibility was a top reason that they accepted new jobs . Employers should be aware that when a candidate is deciding between job offers with similar compensation, the opportunity to work flexibly can become the deciding factor.

6. Employees working flexibly report obstacles to peak performance

The survey asked respondents to identify what made it hard to perform their jobs effectively. Those working in a flexible model were most likely to report multiple obstacles, followed by those working fully remotely, and then by those working in the office. Our research doesn’t illuminate the cause and effect here: it could be that people who face barriers are more likely to spend some time working from home. It could also be that workers who experience both on-site and at-home work are exposed to the challenges of each and the costs of regularly switching contexts.

Some obstacles were reported at much higher rates by specific groups: for example, about 55 percent of 18- to 34-year-olds offered the option to work fully remotely say mental-health issues  impacted their ability to perform effectively, though only 17 percent of people aged 55 to 64 said the same. Workers with children at home  who were offered full-time remote-work options were far more likely than their peers without children to report that problems with physical health or a hostile work environment had a moderate or major impact on their job.

The results of the American Opportunity Survey reflect sweeping changes in the US workforce, including the equivalent of 92 million workers offered flexible work, 80 million workers engaged in flexible work, and a large number of respondents citing a search for flexible work as a major motivator to find a new job.

Competition for top performers and digital innovators demands that employers understand how much flexibility their talent pool is accustomed to and expects. Employers are wise to invest in technology, adapt policies, and train employees to create workplaces that integrate people working remotely and on-site (without overcompensating by requiring that workers spend too much time in video meetings ). The survey results identify obstacles to optimal performance that underscore a need for employers to support workers with issues that interfere with effective work. Companies will want to be thoughtful about which roles can be done partly or fully remotely—and be open to the idea that there could be more of these than is immediately apparent. Employers can define the right metrics and track them to make sure the new flexible model is working.

At a more macro level, a world in which millions of people no longer routinely commute has meaningful implications for the commercial core in big urban centers and for commercial real estate overall. Likewise, such a world implies a different calculus for where Americans will live and what types of homes they will occupy. As technology emerges that eliminates the residual barriers to more distributed and asynchronous work, it could become possible to move more types of jobs overseas, with potentially significant consequences.

In time, the full impact of flexible working will be revealed. Meanwhile, these data give us early insight into how the working world is evolving.

For more on the imperative for flexible work and how organizations can respond, please see McKinsey.com/featured-insights/ Future-of-the-workplace .

André Dua is a senior partner in McKinsey’s Miami office;  Kweilin Ellingrud is a senior partner in the Minneapolis office;  Phil Kirschner is a senior expert in the New York office, where Adrian Kwok is an associate partner and Ryan Luby is a senior expert; Rob Palter is a senior partner in the Toronto office; and Sarah Pemberton is a manager in the Hong Kong office.

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Market Research: A How-To Guide and Template

Discover the different types of market research, how to conduct your own market research, and use a free template to help you along the way.

MARKET RESEARCH KIT

5 Research and Planning Templates + a Free Guide on How to Use Them in Your Market Research

Updated: 02/21/24

Published: 02/21/24

Today's consumers have a lot of power. As a business, you must have a deep understanding of who your buyers are and what influences their purchase decisions.

Enter: Market Research.

Whether you're new to market research or not, I created this guide to help you conduct a thorough study of your market, target audience, competition, and more. Let’s dive in.

Table of Contents

What is market research?

Primary vs. secondary research, types of market research, how to do market research, market research report template, market research examples.

Market research is the process of gathering information about your target market and customers to verify the success of a new product, help your team iterate on an existing product, or understand brand perception to ensure your team is effectively communicating your company's value effectively.

Market research can answer various questions about the state of an industry. But if you ask me, it's hardly a crystal ball that marketers can rely on for insights on their customers.

Market researchers investigate several areas of the market, and it can take weeks or even months to paint an accurate picture of the business landscape.

However, researching just one of those areas can make you more intuitive to who your buyers are and how to deliver value that no other business is offering them right now.

How? Consider these two things:

• Your competitors also have experienced individuals in the industry and a customer base. It‘s very possible that your immediate resources are, in many ways, equal to those of your competition’s immediate resources. Seeking a larger sample size for answers can provide a better edge.
• Your customers don't represent the attitudes of an entire market. They represent the attitudes of the part of the market that is already drawn to your brand.

The market research services market is growing rapidly, which signifies a strong interest in market research as we enter 2024. The market is expected to grow from roughly $75 billion in 2021 to $90.79 billion in 2025 .

Free Market Research Kit

• SWOT Analysis Template
• Survey Template
• Focus Group Template

You're all set!

Click this link to access this resource at any time.

Why do market research?

Market research allows you to meet your buyer where they are.

As our world becomes louder and demands more of our attention, this proves invaluable.

By understanding your buyer's problems, pain points, and desired solutions, you can aptly craft your product or service to naturally appeal to them.

Market research also provides insight into the following:

• Where your target audience and current customers conduct their product or service research
• Which of your competitors your target audience looks to for information, options, or purchases
• What's trending in your industry and in the eyes of your buyer
• Who makes up your market and what their challenges are
• What influences purchases and conversions among your target audience
• Consumer attitudes about a particular topic, pain, product, or brand
• Whether there‘s demand for the business initiatives you’re investing in
• Unaddressed or underserved customer needs that can be flipped into selling opportunity
• Attitudes about pricing for a particular product or service

Ultimately, market research allows you to get information from a larger sample size of your target audience, eliminating bias and assumptions so that you can get to the heart of consumer attitudes.

As a result, you can make better business decisions.

To give you an idea of how extensive market research can get , consider that it can either be qualitative or quantitative in nature — depending on the studies you conduct and what you're trying to learn about your industry.

Qualitative research is concerned with public opinion, and explores how the market feels about the products currently available in that market.

Quantitative research is concerned with data, and looks for relevant trends in the information that's gathered from public records.

That said, there are two main types of market research that your business can conduct to collect actionable information on your products: primary research and secondary research.

Primary Research

Primary research is the pursuit of first-hand information about your market and the customers within your market.

It's useful when segmenting your market and establishing your buyer personas.

Primary market research tends to fall into one of two buckets:

• Exploratory Primary Research: This kind of primary market research normally takes place as a first step — before any specific research has been performed — and may involve open-ended interviews or surveys with small numbers of people.
• Specific Primary Research: This type of research often follows exploratory research. In specific research, you take a smaller or more precise segment of your audience and ask questions aimed at solving a suspected problem.

Secondary Research

Secondary research is all the data and public records you have at your disposal to draw conclusions from (e.g. trend reports, market statistics, industry content, and sales data you already have on your business).

Secondary research is particularly useful for analyzing your competitors . The main buckets your secondary market research will fall into include:

• Public Sources: These sources are your first and most-accessible layer of material when conducting secondary market research. They're often free to find and review — like government statistics (e.g., from the U.S. Census Bureau ).
• Commercial Sources: These sources often come in the form of pay-to-access market reports, consisting of industry insight compiled by a research agency like Pew , Gartner , or Forrester .
• Internal Sources: This is the market data your organization already has like average revenue per sale, customer retention rates, and other historical data that can help you draw conclusions on buyer needs.
• Focus Groups
• Product/ Service Use Research
• Observation-Based Research
• Buyer Persona Research
• Market Segmentation Research
• Pricing Research
• Competitive Analysis Research
• Customer Satisfaction and Loyalty Research
• Brand Awareness Research
• Campaign Research

1. Interviews

Interviews allow for face-to-face discussions so you can allow for a natural flow of conversation. Your interviewees can answer questions about themselves to help you design your buyer personas and shape your entire marketing strategy.

2. Focus Groups

Focus groups provide you with a handful of carefully-selected people that can test out your product and provide feedback. This type of market research can give you ideas for product differentiation.

3. Product/Service Use Research

Product or service use research offers insight into how and why your audience uses your product or service. This type of market research also gives you an idea of the product or service's usability for your target audience.

4. Observation-Based Research

Observation-based research allows you to sit back and watch the ways in which your target audience members go about using your product or service, what works well in terms of UX , and which aspects of it could be improved.

5. Buyer Persona Research

Buyer persona research gives you a realistic look at who makes up your target audience, what their challenges are, why they want your product or service, and what they need from your business or brand.

6. Market Segmentation Research

Market segmentation research allows you to categorize your target audience into different groups (or segments) based on specific and defining characteristics. This way, you can determine effective ways to meet their needs.

7. Pricing Research

Pricing research helps you define your pricing strategy . It gives you an idea of what similar products or services in your market sell for and what your target audience is willing to pay.

8. Competitive Analysis

Competitive analyses give you a deep understanding of the competition in your market and industry. You can learn about what's doing well in your industry and how you can separate yourself from the competition .

9. Customer Satisfaction and Loyalty Research

Customer satisfaction and loyalty research gives you a look into how you can get current customers to return for more business and what will motivate them to do so (e.g., loyalty programs , rewards, remarkable customer service).

10. Brand Awareness Research

Brand awareness research tells you what your target audience knows about and recognizes from your brand. It tells you about the associations people make when they think about your business.

11. Campaign Research

Campaign research entails looking into your past campaigns and analyzing their success among your target audience and current customers. The goal is to use these learnings to inform future campaigns.

• Define your buyer persona.
• Identify a persona group to engage.
• Prepare research questions for your market research participants.
• List your primary competitors.
• Summarize your findings.

1. Define your buyer persona.

You have to understand who your customers are and how customers in your industry make buying decisions.

This is where your buyer personas come in handy. Buyer personas — sometimes referred to as marketing personas — are fictional, generalized representations of your ideal customers.

Use a free tool to create a buyer persona that your entire company can use to market, sell, and serve better.

Free Focus Group Kit

3. prepare research questions for your market research participants..

The best way to make sure you get the most out of your conversations is to be prepared.

You should always create a discussion guide to make sure you use your time wisely. Your discussion guide should be in an outline format, with a time allotment and open-ended questions for each section.

Wait, all open-ended questions?

Yes — this is a golden rule of market research. You never want to “lead the witness” by asking yes and no questions, as that puts you at risk of unintentionally swaying their thoughts by leading with your own hypothesis.

Asking open-ended questions also helps you avoid one-word answers (which aren't very helpful for you).

Example Outline of a 30-Minute Survey

Here's a general outline for a 30-minute survey for one B2B buyer.

Want to make it a digital survey? Use HubSpot's free online form builder .

Background Information (5 minutes)

Ask the buyer to give you a little background information (their title, how long they've been with the company, and so on). Then, ask a fun/easy question to warm things up (first concert attended, favorite restaurant in town, etc.).

Here are some key background questions to ask your target audience:

• Describe how your team is structured.
• Tell me about your personal job responsibilities.
• What are the team's goals and how do you measure them?
• What has been your biggest challenge in the past year?

Now, make a transition to acknowledge the specific purchase or interaction they made that led to you including them in the study. The next three stages of the buyer's journey will focus specifically on that purchase.

Awareness (5 minutes)

Here, you want to understand how they first realized they had a problem that needed to be solved without getting into whether or not they knew about your brand yet.

• Think back to when you first realized you needed a [name the product/service category, but not yours specifically]. What challenges were you facing at the time?
• How did you know that something in this category could help you?
• How familiar were you with different options on the market?

Consideration (10 minutes)

Now you want to get very specific about how and where the buyer researched potential solutions. Plan to interject to ask for more details.

• What was the first thing you did to research potential solutions? How helpful was this source?
• Where did you go to find more information?

If they don't come up organically, ask about search engines, websites visited, people consulted, and so on. Probe, as appropriate, with some of the following questions:

• How did you find that source?
• How did you use vendor websites?
• What words specifically did you search on Google?
• How helpful was it? How could it be better?
• Who provided the most (and least) helpful information? What did that look like?
• Tell me about your experiences with the sales people from each vendor.

Decision (10 minutes)

• Which of the sources you described above was the most influential in driving your decision?
• What, if any, criteria did you establish to compare the alternatives?
• What vendors made it to the short list and what were the pros/cons of each?
• Who else was involved in the final decision? What role did each of these people play?
• What factors ultimately influenced your final purchasing decision?

Here, you want to wrap up and understand what could have been better for the buyer.

• Ask them what their ideal buying process would look like. How would it differ from what they experienced?
• Allow time for further questions on their end.
• Don't forget to thank them for their time and confirm their address to send a thank-you note or incentive.

4. List your primary competitors.

List your primary competitors — keep in mind listing the competition isn't always as simple as Company X versus Company Y.

Sometimes, a division of a company might compete with your main product or service, even though that company's brand might put more effort in another area.

For example, Apple is known for its laptops and mobile devices but Apple Music competes with Spotify over its music streaming service.

From a content standpoint, you might compete with a blog, YouTube channel, or similar publication for inbound website visitors — even though their products don't overlap with yours at all.

For example, a toothpaste company might compete with magazines like Health.com or Prevention on certain blog topics related to health and hygiene even though the magazines don't actually sell oral care products.

Identifying Industry Competitors

To identify competitors whose products or services overlap with yours, determine which industry or industries you're pursuing.

Start high-level, using terms like education, construction, media & entertainment, food service, healthcare, retail, financial services, telecommunications, and agriculture.

You can build your list the following ways:

• Review your industry quadrant on G2 Crowd. G2 Crowd aggregates user ratings and social data to create “quadrants,” where you can see companies plotted as contenders, leaders, niche, and high performers in their respective industries.
• Download a market report. Companies like Forrester and Gartner offer both free and gated market forecasts every year on the vendors who are leading their industry.
• Search using social media. Social networks make great company directories. On LinkedIn, for example, select the search bar and enter the name of the industry you're pursuing. Then, under “More,” select “Companies” to narrow your results.

Identifying Content Competitors

Search engines are your best friends in this area of secondary market research.

To find the online publications with which you compete, take the overarching industry term you identified in the section above, and come up with a handful of more specific industry terms your company identifies with.

A catering business, for example, might generally be a “food service” company, but also consider itself a vendor in “event catering,” “cake catering,” or “baked goods.” Once you have this list, do the following:

• Google it. Don't underestimate the value in seeing which websites come up when you run a search on Google for the industry terms that describe your company. You might find a mix of product developers, blogs, magazines, and more.
• Compare your search results against your buyer persona. If the content the website publishes seems like the stuff your buyer persona would want to see, it's a potential competitor, and should be added to your list of competitors.

5. Summarize your findings.

Feeling overwhelmed by the notes you took? We suggest looking for common themes that will help you tell a story and create a list of action items.

To make the process easier, try using your favorite presentation software to make a report, as it will make it easy to add in quotes, diagrams, or call clips.

Feel free to add your own flair, but the following outline should help you craft a clear summary:

• Background: Your goals and why you conducted this study.
• Participants: Who you talked to. A table works well so you can break groups down by persona and customer/prospect.
• Executive Summary : What were the most interesting things you learned? What do you plan to do about it?
• Awareness: Describe the common triggers that lead someone to enter into an evaluation. (Quotes can be very powerful.)
• Consideration: Provide the main themes you uncovered, as well as the detailed sources buyers use when conducting their evaluation.
• Decision: Paint the picture of how a decision is really made by including the people at the center of influence and any product features or information that can make or break a deal.
• Action Plan: Your analysis probably uncovered a few campaigns you can run to get your brand in front of buyers earlier and/or more effectively. Provide your list of priorities, a timeline, and the impact it will have on your business.

Within a market research kit, there are a number of critical pieces of information for your business‘s success. Let’s take a look at these elements.

Pro Tip: Upon downloading HubSpot's free Market Research Kit , you'll receive editable templates for each of the given parts of the kit, instructions on how to use the kit, and a mock presentation that you can edit and customize.

Don't forget to share this post!

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The massive surge in the number of people working from home may be the largest change to the U.S. economy since World War II, says Stanford scholar Nicholas Bloom .

And the shift to working from home, catalyzed by the pandemic, is here to stay, with further growth expected in the long run through improvements in technology.

Looking at data going back to 1965, when less than 1% of people worked from home, the number of people working from home had been rising continuously up to the pandemic, doubling roughly every 15 years, said Bloom, the William D. Eberle Professor in Economics in the School of Humanities and Sciences and professor, by courtesy, at Stanford Graduate School of Business.

Before the pandemic, only around 5% of the typical U.S. workforce worked from home; at the pandemic’s onset, it skyrocketed to 61.5%. Currently, about 30% of employees work from home.

“In some ways, one of the biggest lasting legacies of the pandemic will be the shift to work from home,” said Bloom.

Bloom shared his research on working from home at the Stanford Distinguished Careers Institute ’s “The Future of Work” Winter 2023 Colloquium, which focused on how the ways we work are changing.

DCI Director Richard Saller moderated the event , which featured scholars from Stanford and beyond discussing working arrangements and attitudes, challenges to office real estate, learned lessons about the power of proximity, and more.

Below are seven takeaways from Bloom’s discussion:

• The employees. About 58% of people in the U.S. can’t work from home at all, and they are typically frontline workers with lower pay. Those who work entirely from home are primarily professionals, managers, and in higher-paying fields such as IT support, payroll, and call centers. The highest paid group includes the 30% of people working from home in a hybrid capacity, and these include professionals and managers.
• The move. Almost 1 million people left city centers like New York and San Francisco during the pandemic. Those who used to go to the office five days a week are now willing to commute farther because they are only in the office a couple days a week, and they want larger homes to accommodate needs such as a home office. This has changed property markets substantially with rents and home values in the suburbs surging, Bloom said. Home values in city centers have risen but not by much.
• The commute. Public transit journeys have plummeted and are currently down by a third compared to pre-pandemic levels. This sharp reduction is threatening the survival of mass transit, Bloom said. These are systems that have relatively fixed costs because the hardware and labor, which is largely unionized, are relatively hard to adjust. A lot of the revenues come from ticket sales, and these agencies are losing a lot of money.
• The office. Offices are changing, with cubicles becoming less popular and meeting rooms more desirable. As some companies incorporate an organized hybrid schedule in which everyone comes in on certain days, they are redesigning spaces to support more meetings, presentations, trainings, lunches, and social time.
• The startups. Startup rates are surging, up by 20% from pre-pandemic numbers. The reasons: working from home provides a cheaper way to start a new company by saving a lot on initial capital and rent. Also, people can more easily work on a startup on the side when their regular job offers the option to work from home.
• The downtime. The number of people playing golf mid-week has more than doubled since 2019. People used to go before or after work, or on the weekends, but now the mid-day, mid-week golf game is becoming more common. The same is probably true for things like gyms, tennis courts, retail hairdressers, ski resorts, and anything else that consumers used to pack into the weekends.
• The organization. More and more, firms are outsourcing or offshoring their information technology, human resources, and finance to access talent, save costs, and free up space. There has been a big increase in part-time employees, independent contractors, and outsourcing. “After seeing how well it worked with remote work at the beginning of the pandemic, companies may not see a need to have employees in the country,” Bloom said.

Interested in hearing more about the future of work? Stanford Continuing Studies will feature Bloom as he discusses “The Future of and Impact of Working from Home” on May 1 as part of the Stanford Monday University web seminar series .

Bloom is also co-director of the Productivity, Innovation, and Entrepreneurship program at the National Bureau of Economic Research, a fellow at the Centre for Economic Performance, and a senior fellow at the Stanford Institute for Economic Policy Research .

Watch these Dates for Key Market Research Reports

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Panel: Cities Face 'Doom Loop’ but There’s Hope

A panel of experts said work from home has negatively impacted commercial real estate, but office-to-housing conversions can help.

NEW YORK – Real estate experts from around the world held a virtual seminar on Wednesday to discuss how to mitigate the impact of expanded work-from-home opportunities created by the COVID-19 pandemic.

The Volcker Alliance, a nonprofit think tank started in 2013 by former Federal Reserve Board Chairman Paul A, Volcker, hosted the event titled "Doom Loop or Boom Loop – Work from Home and the Challenges Facing US Cities."

The discussion centered on how to deal with changes wrought by the growth of work from home and hybrid positions during the pandemic, and the resulting challenges to office space value and related businesses and services that thrive on the traffic of commuters going to work.

The seminar was the companion to a paper released by the Volcker Alliance early Wednesday morning that laid out the challenges and opportunities facing cities in greater detail. The paper focused on New York, Philadelphia, Miami, Chicago, and San Francisco.

"Ever since the arrival of the COVID-19 pandemic in the US in 2020 led to a surge in people working from home (WFH), cities across the country have been forced to reckon with the possibility of a 'Doom Loop' scenario of vacant offices, depleted central business districts, declining economic competitiveness, and fiscal stress," the paper states. "However, given the right set of policies, cities can reverse their fortunes and embark upon a path to a 'Boom Loop' of greater productivity and economic growth."

Stijn Van Nieuwerburgh, a professor of real estate and finance at Columbia University's Graduate School of Business, sees potential in converting unused office space into housing.

"We have an excess of offices, and we also have a major housing affordability problem in pretty much all of our major cities, and we have a problem with the climate transition," Van Nieuwerburgh said during the panel discussion. "So at the end of the day we need to convert 'brown' offices into 'green' apartments. That's easier said than done."

Van Nieuwerburgh pointed out that there are physical and regulatory hurdles that must be overcome to facilitate conversion, but he said that generally speaking, 10% office space across the country is ready now for conversion into housing. For cities with older office stock such as Chicago and New York, that figure may go as high as 30%.

The greatest obstacle to conversion though, he said, is the financial one. Nieuwerburgh lays out three variables that are necessary for successful conversion.

First, he said the building needs to be bought at a substantial discount, as much as 60%, from its pre-COVID valuation. Second, the conversion costs must be reasonable. And finally the apartments must enter into a strong market that supports their high market rates.

"To be clear, we're talking about a luxury market conversion, where we're going to take an office building and produce very high-end apartments, the sort of places that in New York City would rent for $7,000 a month," Van Nieuwerburgh said.

He also acknowledged that this would do little to address the affordability crisis in housing and called on local and state governments to provide subsidies, tax abatements, and other incentives to support some of the units in conversions becoming available at affordable rents.

Kathryn Wylde, president and CEO of the nonprofit Partnership for New York City, looked at the issue from a different perspective, trying to highlight what employers can do to entice workers to return to the office.

"In terms of what's been found by employers to get people back to the office? They all say free food, in addition to moving into fancy new offices," Wylde said, adding that 20 million square feet of new office space has been built in New York since the pandemic, successfully bucking the trend of office space vacancies while charging the highest commercial rents the city has ever seen.

"There's been a flight from old, dingy office buildings to brand new buildings, and employers have shown they're willing to pay the cost," she said.

Wylde also argued that remote work may not be the biggest problem facing cities despite the empty buildings and other woes that cities are facing.

"There have been a lot of dynamics that are affecting [New York City]. I don't think that remote work is the most significant one in many respects," she said, adding that one of the biggest impacts on cities came in 2018 with the tax cuts passed by former President Donald Trump.

Part of that legislation, she said, capped local and state tax deductions at $10,000, and she said that change hurt urban states in particular such as New York, California, Illinois and Connecticut.

While the work of The Volcker Alliance focuses on larger cities across the United States, smaller cities like those found in Connecticut are facing similar issues. Commercial leasing saw ups and downs throughout 2023 in Hartford County, according to data gathered by CBRE Group, which is the world's largest commercial real estate services firm. The real estate picture was mixed, with leasing falling 17% from the third quarter, but rent costs per square foot rising by 4% year over year.

Working from home has also impacted local businesses that rely on daytime traffic from commuters and office workers to stay in business. Earlier this month, Tisane Euro-Asian Café, once a staple of the dining and party scene in Hartford's west end, closed earlier this month after 24 years in business. In its note to customers about the closure, Locals 8 Hospitality Group, the operator of Tisane and several other restaurants, directly referenced remote work as a challenge it could not surmount.

"Tisane used to be open from 7 a.m. to 2 a.m. prior to Covid and served four day parts. People would have meetings over coffee that rolled into lunch, lunch meetings that rolled into happy hour, or dinner that rolled into cocktails and music. Its central location on Farmington Ave served as the perfect meeting space for many. Unfortunately, with more people working remotely and fewer coming into Hartford, it has impacted the business we had before the pandemic," the restaurant group said in a statement.

© 2024 CTNewsJunkie - all rights reserved.

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