While it may seem like an eternity by now, the COVID-19 pandemic first came on the scene in New York on March 1 with the first confirmed case. In the past four months there have been well in excess of 402,000 confirmed COVID cases and nearly 25,000 deaths in the Empire State alone.
Many essential and non-essential businesses coping with “New York on Pause” regulations imposed in mid-March prompted some businesses to allow employees to work from home in an attempt to keep their businesses operational. Business leaders and analysts say it is too early to tell how many employees post-pandemic will be afforded the opportunity to work from home, but with companies such as Twitter, Facebook, Google and Shopify having engaged in work-at-home initiatives, the stakes could be very high for commercial property owners, local and state governments and even economic development agencies here and across the nation.
One analyst that has chimed in on the issue is Kelly Rendziperis, a partner at Site Selection Group, a Dallas-based independent location advisory and economic incentives firm. She notes that a number of analysts have predicted that some companies will reduce or eliminate their real estate holdings in favor of a work-at-home paradigm. However, she added that there are others that believe companies will in fact add to their respective real estate assets in order to accommodate sufficient distance between employees in order to comply with CDC guidelines.
“I think it is too early to determine whether the remote employee paradigm will truly take over. Since it has only been approximately three to four months since COVID-19 forced employers to allow their employees to work from home, the productivity of such employees remains to be seen,” wrote Rendziperis in her blog entitled: “The Impact of Work-From-Home on Economic Incentives.” She adds, “Current productivity could be driven primarily by employees’ motivation to keep their jobs during this pandemic and economic uncertainty. However, it is not clear how productivity will be in the long term. There is no question that employers are doing everything they can to ensure the health and safety of their employees during this current health crisis, but it may not be a long-term solution.”
Christine Chmura, PhD, CEO and Chief Economist of Chmura Economics & Analytics of Richmond, VA, in a recent article published in the Richmond Times-Dispatch, agrees that it is too early to tell how much of an impact work-at-home programs will have on the real estate markets. In the article entitled “Economic Impact: Working more from home has implications for economic development, site selection and urban planning,” she cited The American Time-Use Survey and the Occupational Information Network, or ONET, the database of occupational information developed under the U.S. Department of Labor. The two data sources indicate that approximately 12% of U.S. employment falls under remote job occupations, with 26% in the partial-remote bucket and the remaining 62% in non-remote occupations.
Remote jobs include occupations such as bookkeepers, software developers, lawyers and financial managers. Office clerks, personal care aides, and general operations managers top the list of partial-remote jobs, she notes. Non-remote jobs include retail salespersons, cashiers and registered nurses.
"The 12% for remote job seems like a small number, but it could have significant implications for regions that have a relatively large amount of office space,” Chmura stated.
Among the challenges the business community will face she notes, include: ensuring proper cyber-security protocols or maintaining client confidentiality from others living at the same residence. Therefore, Site Selection Group’s Rendziperis believes that the overall productivity of the work-at-home model will not be successful for all employers.
Most existing economic incentive programs across the United States are not structured to incentivize work-at-home employees. If work-at-home programs become more prevalent, economic incentive programs may need to be restructured. To access Ms. Rendziperis’ full blog that includes a more detailed presentation on the impacts of work-at-home models to economic incentive programs, go to: https://info.siteselectiongroup.com/blog/the-impact-of-work-from-home-on-economic-incentives?utm_campaign=Economic%20Incentives&utm_content=133198219&utm_medium=social&utm_source=linkedin&hss_channel=lcp-620746
Kelley Rendziperis is a partner at Site Selection Group and can be reached at krendziperis@siteselectiongroup.com or at (214) 271-0584. Site Selection Group LLC is a leading independent location advisory and economic incentives firm providing solutions to corporations and communities across the world. Dallas-based Site Selection Group offers four core services to our customers: Location Advisory, Economic Incentive Services, Corporate Real Estate services and Economic Development Consulting. Site Selection Group's mission is to align the needs of corporations with the optimal locations in order to provide the absolute maximum economic benefit. For more information, visit: www.siteselectiongroup.com.
