The coronavirus pandemic initiated a major shift in the way -- and the location -- people work.
In this video clip from "The Virtual Opportunities Show," recorded on Feb. 15, Motley Fool contributors Rachel Warren, Demitri Kalogeropoulos, and Jose Najarro discuss this trend, now two years in, and what it could mean for those work-from-home stocks that have fallen from their pandemic heights.
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10 stocks we like better than Walmart
They just revealed what they believe are the ten best stocks for investors to buy right now... and Walmart wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Stock Advisor returns as of 2/14/21
Demitri Kalogeropoulos: I wanted to jump in real quick, I can talk about mine next here. The article that I saw there interesting was yesterday in The Wall Street Journal about remote work. This was the headline, "People Are Going Out Again, Just Not to the Office." This is based on fresh commercial real estate data that comes out every week through the first week of February. What's happening right now it's interesting. Coming out of the pandemic as I'm sure you know in your local area that many parts of the economy are rebounding or have completely rebounded or are close to it. We're talking about restaurants, travel, airline tickets, sporting events are almost completely, fully recovered. Movie theaters are getting there, they're in that 80% range pre-pandemic COVID levels.
But there's a big outlier and it's the offices. This occupancy data says that about one-third of office workspaces have called employees back after shifting to remote work in 2020 and 2021. It's only one-third of these office spaces in big cities are back to in-person working. That's up from 23% when the omicron variant started moving through the country. But it's still below the 41% pandemic high we saw in December right before omicron took off. I thought that's really interesting stat for a lot of the sectors we talk about. I think about a lot of the remote-work stocks, the work-from-home stocks we've talked about like Zoom and then any of these virtual opportunities spaces. I think it's a really bullish sign that even though these stocks are down a lot and there's no way to look in the next year or even in say that we're going to be anywhere near 80% of offices back to normal work. I think what's clear from these stats is that obviously, companies are able to go fully remote and employees are in no hurry to end that arrangement.
I think it's pretty clear that they love it. They like the flexibility, they prefer to work from home when they can. I think that's good news for a lot of the niches we talked about like cloud software and cybersecurity, virtual communications. I'm curious what you guys think about it. If you think we're going to plateau at say, I was thinking just throw a number, 60%, I think we're going to get back to that 60% range of offices back to normal and then just slowly trend down from there. It also could be because the employment labor market is so tight right now. No office wants to be a real jerk about forcing employees to come back in because they might just lose half their workforce. That could be just an artifact of this work environment. But I'm curious if you guys think when you're going to get normal anytime soon.
Jose Najarro: Yeah, Demitri, I think this is going to stay, maybe not to this level, but it's not going to go back to normal. I think obviously right now we are having a nice amount of labor shortage. Like you mentioned, a lot of companies are trying to be nice with this hybrid work so they don't lose their workforce. But I think even after this labor shortage, if it ever ends, we're going to see at least the big tech, in my opinion, still offer this type of asset or perk for working for them. I think back then for Google it was super cool. Hey, I used to work at a place where they have, for example, not personally me, but any type of Google employee would be, "Hey, I enjoy a place that we have a foosball table, a game room, nice cafeteria in the office so we can enjoy it." I think eventually people are going to be like, "I enjoy working at this place because of the hybrid work that I'm giving." I think that employees nowadays are probably focusing on different types of products that they want from their everyday career. I think hybrid work style is going to be one of them.
Rachel Warren: Yeah, I agree. I thought this was a really interesting piece and I don't know, I've talked to some different people that we've hosted on Motley Fool Live Backstage Pass. Just through my reading, I just don't see us going back to that pre-pandemic version of the corporate life. I think for a lot of people, I know I've found this to be the case myself and I was working remotely long before the pandemic happened. I'm more productive when I'm working from home. I like the ability to set my schedule, set those goalposts. I feel like there's a lot of distractions. Yes, there can be distractions at home, but there's a lot of ones that specific in the office life that I just haven't had to deal with so much working remotely.
But I think the other thing is people like the time flexibility, but they like the ability to be more location independent. They like the ability to be able to focus on their families and their personal lives and not have to work everything around the office while still having an exciting career path. I think for a lot of these big tech companies that's going to need to be a key point to retain talent and attract new talent. I think as well, you're going to be seeing more challenges as something that's come up as well. You have a lot of workforces that are going maybe permanently remote, but maybe some of the office staff, not everyone was maybe trained or technologically ready to handle this remote work environment. I think that's another hurdle some companies are going to have to deal with as well, is to make sure that they are adequately training their workforce to live up to this new digital age. But I definitely don't think we're going to be reverting to a pre-pandemic office situation. We'll probably see more people in the coming months go back to the office than we see now. But I think in a lot of cases, particularly with there being so many companies that do offer remote and hybrid roles, I think that there is going to be much more of a balance between the in-office and remote workforce.