In early 2020, just as the COVID-19 pandemic started to affect the health of millions around the world, epidemiologists and public health experts pointed to social distancing as the key measure to control the spread of the virus. From an economic perspective, it became immediately clear that the ability to work from home would determine workers’ outcomes.
Visiting Researcher - Workforce of the Future initiative at Brookings
Carlos Daboin Contreras
Consultant - Workforce of the Future initiative at Brookings
Indeed, our estimates using Current Population Survey basic monthly samples from 2020 suggest that employment in “teleworkable” occupations (those that don’t require working outdoors, using protective equipment, moving around, or operating machinery ) contracted by 7.3 percent between February and April 2020 compared to an 18.6 percent contraction for “non-teleworkable” occupations. Since then, demand for non-teleworkable occupations surged, and the employment gap between teleworkable and non-teleworkable occupations narrowed to only a 1.7 percentage point difference.
Arguably, social distancing should have also meant greater resilience in hiring efforts for teleworkable occupations during the pandemic. However, this was not the case: By May 2020, postings in teleworkable occupations had dropped by 40 percent, while those for not-remotable had dropped only by 25 percent. As postings for non-teleworkable occupations had recovered to 13 percent below pre-pandemic levels by December 2020, teleworkable postings remained 35 percent behind their February benchmark (Figure 1).
In a new working paper, we use Burning Glass Technologies (BGT) data on online job postings to disentangle this counterintuitive pattern. We find that employers’ hesitation to hire workers for whom on-site experience is crucial to their productivity could be one of the factors behind the slow recovery of postings for teleworkable occupations.
Figure 1. Job postings, employment, and “remotability” of work during 2020
Source: Authors’ analysis of Burning Glass Technologies (BGT) online job postings data and IPUMS CPS.
One plausible explanation for teleworkable occupations’ lagging job postings is that as social distancing disproportionately affected non-teleworkable occupations, the bulk of the hiring efforts focused on that group as the economy reopened. This hypothesis, however, does not explain why non-teleworkable job postings shrank by 30 percent over the first two months of the pandemic, while teleworkable postings did so by 35.8 percent, nor does it explain the persistent lag for teleworkable postings toward the end of 2020. Moreover, our analyses show that even after taking away the effect on employment losses on this trend—drop in postings—remotable occupations show a slower postings recovery than the rest.
Another factor behind the reduced hiring efforts toward teleworkable occupations could be their relatively low presence in “essential” or “critical” industries (e.g., health care, logistics, or food manufacturing), whose demand stayed strong during most of 2020. Indeed, this explains why demand for front-line workers—those in roles that are both non-teleworkable and play a large role in essential industries—surged. However, hiring efforts towards teleworkable occupations were even lower among those often required by essential industries, like administrative assistants and accounting clerks, both occupations with 40 percent fewer job postings in December 2020 than in February 2020. Interestingly, we also find that the robust hiring demand for “front-line” workers did not translate to stronger employment in these occupations during the pandemic.
So far, the best explanation for companies’ lackluster demand for teleworkable occupations is that, though employers made special effort to retain employees performing tasks that rely on experience and can be performed from a distance, they disproportionately halted their hiring. For example, employment levels for general and operation managers at the end of 2020 were just 10 percent below February 2020, while their postings lagged by almost 28 percent. Evidently, acquiring much of the experience for—in this case—managing an organization, is challenging without initial in-person interactions.
Something’s got to give. If companies continue to extend their work from home policies, HR managers will need new ways to help workers acquire valuable experience. More generally, as the fraction of workers that will continue working remotely once the economy fully reopens is yet to be seen, our results highlight that the relatively stable employment of teleworkable occupations during the pandemic did not imply better employability for those eager to enter these occupations. In a socially distancing labor market, workers searching for remote jobs may face a more limited hiring demand than expected.