Workforce and housing data suggest that this trend is not new
- Americans who occasionally work from home are more likely to be young, more-educated, with higher-incomes, and engaged in professional, management, and business industries.
- The share of workers who occasionally work from home was stable from the late 1990s through the mid-2000s but has increased in recent years to comprise nearly a quarter of all workers in 2017-18.
- Housing data suggest that this upward trend is continuing, with the share of listings advertising a home office up 2 percent from a year ago and 6 percent from the 2017-18 time period.
- As home listings featuring “office” become more common, the premium they fetch is declining. However, listings featuring an office still command a more than 3 percent price premium and sell 9 days faster than listings without this feature.
In the wake of the global coronavirus pandemic, organizations across the world and the United States have resorted to large-scale responses to reduce social congestion and the spread of the virus. In the U.S., many large companies have instituted broad-based work-from-home policies.
These actions underscore the significant changes in the nature of work, and the impact that technology and networks have had on employment. The ability to continue working remotely not only provides employees and organizations with flexibility in a dynamic economy, but could also offer continuity in times of crisis. As workers maintain output and productivity while engaged out of the confines of an office, many companies might not use layoffs as a first response during times of financial stress. This ability alone could help avoid the self-reinforcing downward spiral so often seen in pre-recessionary periods.
How Many Americans Work Remotely?
The Bureau of Labor Statistics has been collecting information about people working from home for the past few decades. For historical perspective, the number and share of remote workers was fairly level from 1997 through 2004, but has increased notably in the most recent data. There were about 21.5 million Americans who worked at home in 1997, representing 17.8 percent of non-farm workers. The figure included self-employed along with wage and salary employees. At-home employees who were paid accounted for 17.0 percent of the number of remote workers. The at-home figure totaled about 19.8 million in 2001, comprising 15.0 percent of total employed persons. Those paid for remote work made up 17.4 percent of all at-home employees. By 2004, there were 20.7 million people working at home for their primary job, accounting for 14.9 percent of total employed. The share of remote workers who were paid remained fairly level at 17.1 percent.
According to the latest data—released in September 2019 and covering the 2017-18 period—the number of people working at home reached 35.7 million, comprising 24.8 percent of non-farm workers. More importantly, the share of employees who were paid to work at home hit 66.8 percent, a significant change from the late 1990s and 2000s.
While about one-in-five of working Americans has a part-time position, the share of remote employees with a part-time assignment is much smaller. The figures underscore that remote workers are predominantly full-time employees.
Remote Work Demographics: At Home Workers are Younger
The number of Americans who work remotely resembles the overall population, skewing younger. Generation X and Millennials dominate the ranks of remote workers.
The gender breakdown shows men (18,726) outnumbering women (16,998), but the shares are much closer aligned: 25.0 percent of employed men work remote compared with 24.5 percent of all employed women.
Looking at characteristics of remote workers along ethnic distributions, white workers accounted for the majority, at 76.9 percent, followed by Hispanic/Latin workers, at 8.3 percent. African-American workers comprised 8.2 percent of the total remote workforce. Workers of Asian ethnicity made up 6.5 percent.
Mirroring the increasingly technology-intensive nature of work, remote workers skew toward higher educational attainment. The largest share of remote workers are college graduates with a bachelor’s degree or higher, comprising 74.4 percent. Those with some college education or an associate’s degree made up 16.6 percent of total remote workers. High school graduates comprised 8.4 percent, while workers with less than a high school equivalency made up 0.6 percent of the remote workforce.
Stage of family life does not seem to play a significant role in remote workers’ status. Workers who identified as “parent of a household child under 18 years” accounted for 40.6 percent, while those who were not a “parent of a household child under 18 years” comprised 59.4 percent of all remote workers. For parents, those who had children under the age of 13 outnumbered those with teenagers.
Which Industries and Occupations See More Remote Work?
Industries centered on education and business services dominate the remote work landscape. Education and health services account for 24.9 percent of all remote workers, followed closely by professional and business services, at 22.5 percent. The third largest share of remote workers come from financial activities, at 13.7 percent. The manufacturing industry contributes 11.8 percent of the total number of remote workers. The other major industries make up a much smaller share of remote workers.
Looking across the landscape of occupations, the nature of the work performed is mirrored in the distribution. Professional and related occupations have the largest share of remote workers, at 42.8 percent, followed by management, business and financial operations, with 32.7 percent. Office and administrative support occupations are the third largest group, with 9.9 percent of total. Sales and related occupations follow close behind with 7.9 percent of all remote workers. Services, construction, production, maintenance and repair, and transportation occupations combined account for 6.7 percent of all remote workers.
The private sector is the dominant source of at-home work positions, accounting for 83.9 percent of the remote population. The public sector rounds up the remainder, with state government workers accounting for 48.6 percent of all remote public workers. Local government employees make up 31.7 percent of public servants working remotely, followed by federal government workers, at 19.6 percent.
Reflecting the tech-intensive industries leading the remote work charge, employees who earn in the higher earnings bracket (above the 75th percentile) account for the largest share, at 51.4 percent. Remote workers whose earnings are in the 50th to the 75th percentile are the second largest group, with 29.1 percent of all, followed by employees earning in the 25th to the 50th percentile, who accounted for 13.9 percent. Lower paid workers comprised only 5.6 percent of the remote workforce. Looking at these figures, an employee earning in the top quarter of the income distribution is 10 times more likely to work from home than someone earning in the bottom quarter.
Housing Market Trends
With an increase in remote work employees over the past decades, the housing market has adjusted. Listings featuring home offices have seen growth along with rising demand. Based on realtor.com inventory data, home listings containing the word “office” comprised 20.0 percent of total, up from 17.0 percent in 2019 and 13.0 to 14.0 percent in the 2017-18 period.
As more companies have been embracing remote work, buyers are driving demand for houses with home offices higher. Homes featuring the term ‘office’ are selling 9 days faster than the overall housing inventory.
Consistent with the rising demand trend, home listings which feature the word ‘office’ are currently selling at a price-per-square-foot premium of 3.4 percent compared with the broader listings. Interestingly, the price premium has been declining over the past few years, as houses with home offices become more common, or agents highlight flexible spaces as home offices. This month’s premium is lower than last year’s 4.4 percent.
Geographically, housing inventory featuring home offices seems to be widespread. The top metro markets with the largest share of listings featuring the term “office” highlight cities in California, Colorado, and Ohio. Several of the top markets are home to technology sector companies, whose employees can more easily leverage the benefits of remote work. The other common thread running through the top markets is affordability.
|Metro Area||Share of Home Listings with “Office”|
|Colorado Springs, CO||45%|
|Oxnard-Thousand Oaks-Ventura, CA||37%|
|San Jose-Sunnyvale-Santa Clara, CA||35%|
Remote Work Implications
Technology, networks and connectivity have changed the way Americans work and paved the way for today’s geographically remote capabilities. While organizations have been weighing the costs and benefits of remote work, the current situation underscores the flexibility that technology has brought to organizational performance. With many colleges and universities having moved their teaching to virtual environments for the remainder of the academic year, and many companies asking or encouraging employees to work from home, remote working has not only increased in visibility, it has entered the social and economic mainstream.
While the current widespread incidence of remote work is not likely to continue past the coronavirus epidemic, the lessons learned during this period can be incorporated into management practices going forward. Providing workers the flexibility of working from home may offer companies tangible benefits, both in terms of productivity as well as reduced operational costs. In addition, with the rising cost of housing in many large, coastal cities, companies and workers could benefit from the ability to work remotely from lower cost locations.
For housing, the continued increase in the share of remote workers implies that demand for homes with offices or dedicated work spaces will continue to increase. The current coronavirus pandemic offers a dramatic indication of the fact that companies and employees will have to develop plans and clearer policies for remote work beyond the current crisis. For home builders, considering the significant housing shortage, there is an opportunity to address the trend in new construction with a coordinated focus on the needs of tomorrow’s workforce.