As the pandemic drags into another year and workers are continuing to quit their jobs at record rates, it seems the workforce may be changing for good. Many companies are continuing to have some or all of their staff work remotely, while others have switched to hybrid or remote work permanently. In this segment of Backstage Pass, recorded on Dec. 14, 2021, Fool contributors Demitri Kalogeropoulos, Asit Sharma, and Rachel Warren discuss what that means for the workforce and investors.
Demitri Kalogeropoulos: This is a headline that coming from two days ago from The New York Times. Headline is, "The End of a Return-to-Office Date." It's basically about how many big companies or most big companies have been pushing back the baseline when they've been telling employees that it's time to get back to the office. Pandemic is over in that way, and we can start working little bit more normal.
As you may know, if you work for any large companies, over the last eight months or so we've had that dates have been pushed back a lot. Now, the habit that big companies are doing, they're just not issuing a date anymore because it's sort of like we've already had to change this three times. We're just going to say, keep an eye out. We'll let you know when we get closer to it with different variants raising, and things like that.
A couple of interesting stats from the article. We've had a steady return of people to the office, but these numbers are pretty low. I was pretty surprised to see that office occupancy in the United States rose from 33% in August to 40% this month in December. We're still well below half occupancy across the country.
Then there was a recent survey by about two-thirds of these large organizations, and including companies like Apple, Ford, CNN, and Google have all postponed their start dates. Many of these big companies are starting to talk about potentially 2023 or late 2022.
I just think this is interesting. We talk a lot about how work has changed and how it's going to be snapping back toward normal, but we don't know what that normal is going to be. But especially, given that many of these telework stocks have been hammered so much lately since the pandemic social distancing efforts have stopped with the vaccine proliferation.
I think of Zoom for example, which is down almost 50% so far this year. But according to this, as far as corporate executives are concerned, it looks like it could be many more months ahead of mostly remote working.
Asit Sharma: Yeah. Curious to hear Rachel's thoughts on this, because you talked about remote work a couple of weeks ago. What do you make of this, Rachel?
Rachel Warren: I think this is really interesting. I don't think it comes as a big surprise to anyone really, especially as we're heading into the winter season, cold and flu season, we're seeing new variants popping up. What could that potentially mean for society as we head into these colder months?
I think it makes sense that companies are taking stock of the current situation and seeing, ''We thought that maybe things would be normal by now, but it's really not.'' I think it also begs the bigger question of, what is normal really going to look like when we come to the end of this period of time, whenever that is? I think more and more and I think a lot of people are feeling this way, it's going to be a new normal. I don't think there's going to be a pre-pandemic normal that we're going to be returning to.
I think that's another thing where companies are evaluating all these overhead costs that they can say by having employees who can work remotely continue to work remotely. I think that's also a really sticky point for employees in this environment where you have so many people quitting their jobs and there is so much leverage for employees if your company isn't going to let you work remote when you very easily could, given the nature of your duties.
Companies know that a lot of employees are just going to look elsewhere. I think it's a big point for employee retention. I think it makes a lot of sense in terms of safety concerns as we're heading into this period of the year. But I think it's something we're going to see more of.
I know, even in just my own personal life, friends, one of my cousins, she works in the healthcare space. She's been working remote since the beginning of the pandemic. Originally they thought, we'll go back in the office this summer. No, now we're going to go back in September. Then here we are in December and now she's actually going to be working remotely on a permanent basis.
I think that some companies might be testing the waters a bit and might be maybe not saying, we're going to go permanently remote but are trying to see, what could that look like? Then you might have a lot of roles that just don't end up returning to the office or maybe they go into occasionally for a meeting but that's it.
Asit Sharma: Yeah. Very interesting. I think this is a net positive for society, if we move to this permanent hybrid environment. As investor, I wonder so Zoom, agreed, Demitri, looks attractive in some ways because it's been cut in half and has such earnings power behind it. It's not some cashless growth on sales story. But then what about some of the other stocks that are widely held in the Fool universe that have gained momentum from the shift to remote work? What does this mean? Do they settle at an equilibrium level?
Does it mean that the company, like say Fiverr, is destined to grow a little bit slower but still has solid growth? I don't know if either of you follow Fiverr very closely, but I've thought about this because this is a company that's actively working to connect the gig economy with the more permanent part of the economy that's hiring more and more specialized work.
They keep introducing verticals that are high-tech. They are certainly creating this path for companies and workers to exist independently of each other but still have beneficial financial relationship. But ultimately, as a growth stock, does that crimp its growth? Does it make it even better?
Warren: I think it makes the space more competitive at least, because the trend that people maybe thought was going to be short-lived is turning into something that [laughs] could last forever for some companies. I think Zoom is a great example of a company that's really key in this changing space, because it's platform is invaluable.
Whether you work hybrid, whether you work fully remote, it's not going anywhere. I think Fiverr is another great example of a company within that space that's enabling people to take control of what they want their career to look like by connecting with people who need different gigs done, whether that be writing or translation or voiceover, there's an endless array of options.
But I think part of that, I'm an owner of Zoom, I don't own Fiverr yet, but I think I personally haven't been discouraged by its stock price going down in recent months. I think that's something that's been happening with so many stocks and so many industries, particularly those high-growth companies. I think that speaks to some of the broader volatility we're seeing right now.
But even Fiverr, I checked over the past year, I think shares were down about 40% You have these companies that have been reporting really great earnings each quarter and really strong customer metrics, but we're just not really seeing that reflected in share prices right now. I think that might be a little while before it writes itself, but the businesses, to me, as I follow them, have looked excellent.
Sharma: Great point. Demitri, final thoughts on this and then we will go with Rachel's article.
Kalogeropoulos: Great points. I would just say that that just adds to the idea that, we didn't have this pandemic lift that's going to disappear once the pandemic ends. I mean, that doesn't seem to be the way the world's moving. I see this in everything, all kinds of companies will say this, including a lot of consumer goods companies.
I talked about the way we eat breakfast, General Mills is reporting next week and they've said for a long time now that that's just changed now forever. What they're saying, what they're seeing and these people are very close to consumer behavior including these CEOs, we're talking about work habits and everything like that.
I think everyone says that there's no indication that we're just going to snap back to some previous thing, a lot of this is going to change and I think it means investing in this space, it's interesting for that reason.
