This article explores regional differences, economic impacts, and changing workplace dynamics in a post-pandemic era.
While many elements of life have returned to normal in the post-pandemic era, the workplace remains an issue for many. The chaotic nature of the return to office two years ago was understandable during the COVID-19 crisis. However, with cooling economies, hiring slowdowns , and cost-cutting measures, the debate over remote versus in-office work continues, impacting the role of offices, work-life integration, and productivity measurement. Estimates suggest a potential $1.3 trillion loss in real estate value in major cities by 2030 due to pandemic-related shifts.
Global remote work prevalence varies based on factors like housing density, COVID-19 lockdown duration, and cultural attitudes toward workplace autonomy. Research, including interviews and a survey of over 42,000 workers in 34 countries, has uncovered these differences. For example, Asian countries generally have lower remote work rates compared to Europe and North America, with Britain, Canada, and the United States having the highest remote work rates.
The work landscape continues to evolve in the aftermath of the pandemic, with the argument over remote employment taking center stage. Global mobility experts are attempting to comprehend the complexities of this ever-changing work environment. The return to office movement is intriguing for the mobility industry because the adoption of remote work and its consequences varies by location. There are differences in the predominance of remote work, such as Asian and European workers returning to offices faster than their colleagues in the Americas.
In this article, we’ll look at the many reasons that are driving these changes and explore the numerous regulations and workplace initiatives that are being implemented in various worldwide locations. Let’s look at the diverse approaches adopted in various global regions:
Return to Office in the U.S.
Remote work is more prevalent in the U.S., especially in sectors where knowledge workers have computer-intensive roles. Research indicates that workers in these sectors in the U.S. work from home nearly a full day more per week compared to those in government and health care roles.
High work-from-home rates are reflected in U.S. office occupancy rates, which lag behind Europe and Asia. A McKinsey study highlighted disparities among major global cities, noting that urban centers heavily reliant on offices, such as New York and San Francisco, saw more significant declines in real estate demand and lower office attendance compared to cities like Paris and Munich. McKinsey’s estimates suggest that office building values in nine major cities could decrease by around $800 billion by 2030 in a moderate scenario and up to $1.3 trillion in a worst-case scenario.
But Americans seem happy—or at least productive—at home. INSEAD business school research found that a higher percentage of Americans reported achieving optimal productivity while working remotely, nearly double the rate in other regions. In contrast, individuals in Europe and Asia expressed greater concerns about losing connections with colleagues.
Remote Work Trends in Europe
In Europe, remote work varies widely, with the U.K. having high rates and France having low rates. Some European countries are at the forefront of enacting flexible work laws. During the pandemic, Lisbon and other European cities attracted digital nomads with tax incentives, affordable real estate, and generous remote-work visas.
European cities are often more walkable and integrated with work, life, and leisure, fostering vibrant communities around offices. Additionally, European policymakers are shaping the future of work, driven by the EU’s “right to disconnect” initiative, already adopted in France, Spain, and Belgium. Several countries, including the Netherlands, Ireland, the U.K., and Belgium, are advancing flexible work arrangements and workers’ rights.
Office Life in Asia
During the first year of the pandemic, Asian countries were more successful in controlling the spread of COVID-19, resulting in fewer people becoming accustomed to remote work. This made the transition back to office life smoother, according to researchers .
This meant that workers in Asia didn’t experience prolonged periods of working from home and adapting to remote work. For example, in South Korea, many workers never left their offices, and in Japan, traditional tools like fax machines and personal stamps known as “hanko” still play a role in the workplace, requiring in-person presence. Some Tokyo corporate managers believe that being in the same physical space helps them supervise their teams more effectively.
In Hong Kong, factors like small living spaces and an efficient public transport system have reduced the incentive for residents to work from home. China’s high office attendance rates can be attributed to its “996” work culture, which involves working from 9 a.m. to 9 p.m. six days a week. Additionally, employee loyalty tends to be more steadfast in countries like Japan and South Korea compared to the United States.
In-Person Work in LATAM
In a shifting landscape marked by the easing of pandemic restrictions, companies in Latin America (LATAM) are recalibrating their workplace strategies, with a strong emphasis on productivity. According to the CEO Outlook 2022 South America report by KPMG, a significant 64% of corporate leaders in LATAM anticipate a full return to in-person work by 2025.
This recent study conducted across Argentina, Brazil, Colombia, and Mexico reveals that, three years after the pandemic’s onset, on-site work remains the dominant mode of employment in these nations. An impressive 75% of respondents have already transitioned back to in-person work, 14% are engaged in hybrid arrangements, and a mere 11% continue to work remotely.
In a country-specific analysis, Argentina stands out with 81% of individuals currently working in a face-to-face setting, while Brazil is at the forefront of hybrid work adoption and Colombia has the highest number of individuals working remotely. Notably, these shifts in workplace models are not purely business-driven; the survey highlights that 59% of respondents prefer in-person work, with only 25% showing a preference for hybrid arrangements and 16% favoring remote work setups.
So, how do these global trends impact the mobility industry?
Factors Impacting Global Return to Office Trends
Insights on the various factors that impact remote work have emerged from interviews with workers and executives, along with findings from a comprehensive study conducted by researchers from institutions including Stanford, Instituto Tecnológico Autónomo de México, and the Ifo Institute. The study involved surveys of over 42,000 workers in 34 countries.
These researchers have found that housing significantly influences office return patterns. In suburban parts of the U.S., where larger homes and home offices are common, the return to the office has been slower. In contrast, densely populated Asian cities have seen higher return rates due to productivity challenges in cramped apartments. Additionally, the duration of COVID-19 lockdowns in an area impacts remote work levels. Regions with repeated lockdowns, like some U.S. cities, have seen increased remote work adoption as both employees and employers adapted to new routines and invested in comfortable home offices, with performance measured by output rather than office presence.
Of course, it is crucial to avoid generalizing entire continents, but it is interesting to note that workers around the world are returning to the office—or not returning—at different paces. So, how can global mobility professionals navigate the return-to-office challenges in their own organizations?
Varied Approaches to Returning to Office: A Global Perspective
In the U.S., policymakers have taken a relatively passive stance, leaving return to office management to companies. Some, like Amazon and Zoom, are now encouraging part-time office returns with the post-Labor Day period signaling a return to regular schedules. In contrast, parts of Europe involve unions and worker associations in return to office policy formation. In Germany, employee-elected councils negotiate hybrid work specifics.
U.S.-based employees face varying policies, ranging from Goldman Sachs requiring five days in the office to Walt Disney Co. mandating four days, while Google and many others opt for three days. In global regions with prevalent remote or hybrid work, strict return-to-office policies raise concerns about retaining valuable talent.
“Business leaders as a group have wanted people to come back in much more profound ways,” said Mark Ein, chairman of the workplace security firm Kastle, in a recent interview with The New York Times. “It really is the labor market’s competitive pressures and some cultural norms that have prevented it.”
“The desire to get people back among business managers is nearly universal,” he added. “It’s the ability to do it that varies across countries.”
However, any leader who anticipates a return to the pre-pandemic “normal” will likely be disappointed, as the workplace has undergone fundamental changes. In the United States, office occupancy rates have reached a plateau at around half of their pre-pandemic levels, and many don’t know when or if occupancy rates will increase again.
While business leaders may express frustrations about the impact of remote work, a recent survey by the Federal Reserve Bank of New York suggests that remote work has become deeply ingrained in the work culture. Work is no longer confined to a single location. Work has developed into a flexible activity that can take place at many times and locations, with the “how” no longer set in stone.