Early on in the pandemic, many companies shifted to remote work out of sheer necessity. After all, forcing workers to gather in buildings was hardly a safe prospect. But now that coronavirus vaccines are widely available, many employers are making plans to bring workers back to the office. Whether they go willingly, however, is a different story.
In a recent Robert Half survey, one-third of workers who are currently doing their jobs remotely said they'd quit before going back to an office full-time. And let's not forget that while many people may be eager to get back to the office sooner rather than later, there are also childcare constraints to grapple with, seeing as how many school districts across the country have yet to return to full-time in-person learning.
But it's not just workers themselves who want to continue doing their jobs from home. For many employers, there's a benefit to keeping staff remote -- namely, the cost savings involved.
Dumping office space allows companies to divert their resources elsewhere. And it can also make hiring staff easier if proximity to a specific building, or set of buildings, is no longer a prerequisite.
In fact, according to job site Indeed, there were twice as many remote job postings in February 2021 than in January 2020. And job seekers are now twice as likely to search for a remote position than they were before the pandemic struck.
Bad news for office buildings?
For many months, office building investors have feared that the remote work trend will make those properties increasingly less relevant in coming years. In fact, many office REITs (real estate investment trusts) have seen their value decline in the course of the pandemic as companies have not only kept employees home but put off lease renewals or downsized to less square footage.
But one thing office REIT investors should remember is that while remote work may be more popular now than it was before the pandemic began, it's still not the norm. In fact, many major tech and financial companies are making plans to bring staff back to the office, and once a larger percentage of the U.S. population is fully vaccinated, those numbers could increase.
Not only that, but when we dig into Indeed's numbers, we see that this past February, about 7% of job postings were for remote positions compared to 2.9% in January 2020. In other words, while remote listings may have, in fact, doubled in the course of the pandemic, they still represent a very small share of listings in total.
The Millionacres bottom line
As such, there's no reason to think office buildings won't manage to recover from the blow the pandemic has dealt them. That recovery may take some time, especially in harder-hit markets like New York City, but office buildings are not in danger of becoming obsolete. And as more and more employers adjust to a post-pandemic world, there's a good chance remote work arrangements will continue to constitute the exception rather than the default setting.