We have talked about the state of Work From Home (WFH) on this blog before, but all of our previous discussions were mainly about the US market. Of course, COVID shifted work habits around the world, and one of the largest job markets that have been affected is the European Union (EU) one.
Bruegel is an independent European organization that does research in order to improve the quality of economic policy in EU; in September 2022 M. Hoffmann, L. Nurski and T. Schraepen published their findings in a study titled “Cross-border telework in the EU: fab or fad?”. Let’s see what they found about the EU and how it compares with the US market (when similar data is available). The comparison with the US market was drawn with numbers from https://wfhresearch.com/.
Remote Work Jump
Before the pandemic around 3% of employees were teleworking in the EU. In the US it was around 4.7% and steadily increasing. In 2020 it jumped to 11% in the EU and to 61.5% in the US. We see that while before the pandemic the figures were somewhat comparable, in the aftermath the EU had a 3.5x increase and the US a 12x increase in remote workers.
That’s a big difference! That could be attributed to several factors. For example, the tech industry makes up 22% of the workforce in the US and 5% in the EU, and since tech jobs lend themselves to remote work, it was easier for a bigger percentage of US employees to switch to WFH. Other factors might have to do with the type and duration of lock downs as well as the required infrastructure to work from home.
Remote work After the Pandemic
One of the ways to assess and measure the persistence of remote work after the pandemic, is to analyze whether job openings are remote only, hybrid, or on-site only. In this case Bruegel used data from the Irish job market (which is one of the most technology heavy markets in the EU) and correlated remote work job openings with pandemic social distancing restrictions.
In this figure, pandemic restrictions have a scale 1 to 3 (3 being the most stringent). As expected, remote-only job openings kept increasing while the restrictions were at their highest level, reaching around 10x their prepandemic level. But although restrictions were relaxed in May 2021, the job openings stayed high at around 7x compared to prepandemic level.
Similarly, in the US actual employment data show that as of October 2022 around 30% of employees work from home, as opposed to around 5% before the pandemic, which is 6 times higher.
Cross Border Work in the EU and the US
A common issue between EU and US remote workers is the gray legal area around their residency and taxation. Since offices were shut down during the pandemic, many workers seized the opportunity to become nomadic and move across states and country lines. In general, employers are able to deal and abide by laws in different jurisdictions. However, office shutdowns gave employees the opportunity to move around in great numbers. Unfortunately, their employees didn’t keep track of them and didn’t pay too much attention to any local taxes, labor laws, and regulations derived from physical work location.
At the moment employers are trying to fix these issues and change their policies and procedures to avoid both legal and tax liabilities. Incidentally, the need to easily hire across borders is reflected by the skyrocketing evaluations of startup companies, for example, Deel and Remote, that streamline HR compliance around the world.
It’s interesting to see how the remote job market is evolving after the pandemic. We’ll keep updating you as things progress in the following months and years.