Virtually overnight, “Work-From-Home” (WFH) has become the norm. The Covid-19 pandemic has transformed the practice of “remote working” from corporate perk to corporate imperative. However, the need to restrict everybody’s work location to their residence has far-reaching implications beyond workplace dynamics.

Once the Covid-19 pandemic has passed, the WFH population will shrink as workers return to offices and other locations outside their homes. However, the ranks of WFH will still far exceed pre-pandemic levels.

Not all employers are planning to transition back to an office environment and even many who are will make WFH a permanent option. In addition, worker productivity has surprisingly kept pace with pre-Covid levels. With fewer people leaving their houses to report to work, ripple effects will be felt in numerous areas.

WFH will cause a wide ranging ripple effect

The corporate real estate market will be hard hit by WFH. Vacancy rates for office space will rise as demand dissipates. Available space will cost a fraction of what it used to. Office buildings will need to be re-purposed (perhaps as affordable housing or mixed-use complexes) if not torn down.

Demand for mass transit will soften, leaving transportation agencies with fewer dollars for maintenance and repair. Although a drop in ridership will lessen the need for such spending, that type of work remains not only capital intensive but also required due to factors independent of ridership levels. In addition, with less revenue flowing in, scheduled improvement projects will be postponed or canceled.

Along with fewer passengers taking advantage of mass transit, fewer cars will be on the roadways. Demand for gasoline (and thus oil) will drop. Infrastructure such as roads, bridges and tunnels will suffer less wear and tear. Reduced levels of emissions will cut pollution and hopefully slow the pace of climate change (a cleaner environment was already witnessed during the early stages of the Covid-19 pandemic)

Hotels and restaurants will also feel the pinch. A dearth of business travelers and offices filled with workers will place these institutions on rough terrain. However, such a blow should prove only damaging and not fatal.

Industry will need to partner with government to minimize adverse economic effects

The effects of WFH are unavoidable but can be managed. The WFH movement was born from a “marriage” between health and economics. WFH became necessary to protect workers from the coronavirus while keeping companies operating and productive.

Once the pandemic has abated, WFH will no longer be linked to health concerns. But the existence of a larger WFH population will keep economic factors in play. The lesson is that companies can’t support WFH in a vacuum. Industry needs to partner with government at the federal, state and local level to figure out how to minimize the ripple effects of WFH.

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