The office may—finally—be coming back. Look no further than big city workers for proof.
Working from home has been more common in major metro areas than in smaller cities and towns since the pandemic started. But that trend has been declining since early 2023, finds the latest installment of WFH Research published in the National Bureau of Economic Research.
In August, workers in the 10 biggest cities spent about 36% of their paid full days working from home, compared to just over 30% of worked from home days among workers in mid-sized cities and nearly 27% in smaller cities in towns. In January, those percentages shrunk to 33%, 30%, and 26%, respectively.
The research comes on the heels of the latest data from Kastle Systems, which tracks foot traffic to offices in the 10 major U.S. metro areas. It revealed that office occupancy exceeded 50% in the week ending on January 25 for the first time since the pandemic began.
The “big-city phenomenon,” as the WFH researchers call it, occurs because jobs in big cities—most often, desk jobs—are disproportionately remote. Plus, bigger cities have way more traffic, “so you save a lot more time when you work from home,” Jose Maria Barrero, one of the study’s authors, tells Fortune.
But after years of wavering attempts to get workers back to the office, the start of 2023 saw yet another strong return-to-office push from some of the country’s largest corporations, including Starbucks, Vanguard Group, and Disney, who mandated employees come in three to four days per week.
It’s working. The number of days U.S. workers across all cities and towns worked from home in January stood at 27.2%—down from its peak of 61.5% in May 2020, the first month WFH Research collected data. Work from home levels are “softening,” Barrero says. “That’s interesting because [it’s been] very stable for at least the previous six months—the full second half of 2022.”
Regardless, WFH Research said the pandemic permanently solidified remote work as a fact of business at a rapid clip. In just three years, the prevalence of remote work soared by the pre-pandemic equivalent of 40 years. But it’s important to note that, despite Kastle’s 50% in-office benchmark, many companies who employ desk workers are currently operating a hybrid work arrangement.
Bosses should get real about the best-case scenario
Despite desk workers’ hesitance to exchange their couches for a commute, return-to-office evangelists have their sights set higher. Mark Ein, Kastle’s chairman, told Fortune in December that he expects office occupancy to level off in 2023 somewhere around 60%.
That’s far from the 100% in-office landscape Morgan Stanley’s James Gorman and Goldman Sachs’ David Solomon are after, especially because airlines, hotels, and concert venues have all seen a complete rebound to pre-pandemic business levels. But so long as offices remain designed for a way of work that no longer exists—and the commute costs an arm and a leg—60% may not seem so bad.
Barrero, on the other hand, is unsure that even 60% is plausible.
“I do think there will be a ceiling for workplace attendance, because I think the sorts of firms that work in buildings with Kastle systems are going to embrace at least some form of hybrid work,” he says. “I don’t expect everyone to be in [the office] most of the time, and the banner moment to return has probably already passed. I would’ve thought last fall or last spring, some time like that.”
In other words, don’t expect many more bombshell statistics about in-office attendance this year. Any companies who have wanted to make big moves—such as mandating a full return to office, or even just demarcating certain weekdays as flexible—have “probably already done so,” Barrero says.
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