The popular yarns about “work from home” and “return to the office” tend to be absolutist. First, there’s the notion that prior to the COVID-19 pandemic, everyone was in the office every day. Next, the idea is that during and after the pandemic, no one went in at all. Lately, the story goes that offices are packing up to the rafters yet again.
The truth, underscored by the findings from the fourth edition of McKinsey’s American Opportunity Survey (AOS), which explores Americans’ views on economic opportunity, is more nuanced. Flexibility existed on some level even prior to the pandemic. Not every workplace emptied out after March 2020, with tumbleweeds rolling through the halls since then. The latest AOS data shows that there has been an uptick in respondents who report working fully on-site compared with 2022, but the change has been modest (see sidebar “Our methodology”).
The bottom line: In 2024, slightly fewer American workers were working fully remotely, and slightly more were working fully on-site, compared with the AOS survey in 2022. McKinsey Global Institute research on global office attendance and occupancy has found that a sea change brought on by the pandemic has stabilized: On average, workers go into the office about 30 percent less frequently than they did prior to the pandemic. In sum, these changes to working patterns are likely marginal for many organizations, but meaningful for others. More fully remote and sometimes-remote, or “hybrid,” working arrangements have likely created a better balance for some workers and given some companies a new way to compete for talent by aligning working conditions with employee preferences. For office owners and operators, the shift in working patterns has implications for where and how office real estate should be built and what experiences should be offered within those buildings.
The takeaway for real estate companies is not just that offices need to be reimagined for a new era. It also means that providers of residential and retail spaces have the opportunity to adapt by offering a range of new features and services. For example, residential markets increasingly need home offices, high-speed internet, and other infrastructure to support working from home. Residential and retail spaces can fill socialization gaps as more people work remotely. Suburban mixed-use environments can increasingly provide the goods and services that people used to get when they commuted to work in downtown areas.
Americans today are working more flexibly than they did before the pandemic, to varying degrees for different workers and employers (see sidebar “A glossary of working-model terms”). Now that flexible working models are an entrenched norm, we offer this view into how they are playing out in American workers’ lives and shaping their futures.
The evolving landscape of work: In-person and remote-work models coexist
The percentage of full-time and part-time workers who said they work fully or partly remotely dropped by four percentage points, to 40 percent, in 2024 (Exhibit 1). Forty percent of workers reported that their employers also prefer remote work, indicating that remote arrangements could stabilize at around that level. However, it should be noted that the survey did not query employers directly about their preferences.
If remote-work policies were based exclusively on worker preferences, they might increase, because 54 percent of workers indicated a preference for them. Flexible-work models (which include remote work and other features, such as the ability to bring a child to work) remained one of the top three motivations for seeking a new job in 2024 (outranked only by more pay or hours and better career opportunities). Moreover, workers were willing to leave their jobs for more flexible work, with 17 percent of recent quitters leaving in the past year because of changes to their working arrangements. Given the persistent value of remote-work policies to workers, many employers will need to make choices that match their talent needs with market realities. Remote work could be used as a tool to attract and retain talent alongside other flexibility offerings (including flexible scheduling or more time off).
Remote work varies by education and income—and in surprising ways by age and gender
Also of note is new data on women’s preferences. During the pandemic, it was widely understood that women preferred work-from-home models because of the childcare flexibility. However, the new data finds that women who do not have children in the home were also more likely than their male counterparts to prefer working from home. Clearly, the desire for childcare flexibility alone doesn’t fully explain women’s preferences.
High-income and high-education cohorts desire remote-work arrangements and have more of them
Workers with higher levels of education and income were more likely to prefer remote-work models and also more likely to work remotely compared with other surveyed cohorts, probably because they were more likely to have office jobs that could be conducted remotely. Among full- and part-time workers with a bachelor’s degree or higher, roughly 60 percent worked remotely some or all the time (versus 10 to 33 percent of workers with levels of educational attainment up to a bachelor’s degree), and 75 percent of them preferred remote-work arrangements (versus 22 to 56 percent of their counterparts with lower levels of education). Among cohorts grouped by household income levels above $100,000, 39 to 59 percent worked from home (versus 23 to 33 percent of cohorts grouped by household income levels below $100,000), while 56 to 70 percent preferred remote work (versus 35 to 49 percent of their lower-income counterparts). Workers with higher education and income levels were also more likely to seek or to have sought a new job offering flexible working arrangements.
The youngest workers surveyed prefer remote-work models less than other age cohorts
The youngest workers surveyed (those aged 18 to 25) were the least enthusiastic about remote work: Roughly 36 percent preferred it, compared with 46 to 59 percent of a range of older cohorts. Perhaps because they are starting their careers, younger workers may benefit more from the increased support and community building offered by on-site experiences. Still, because younger workers were less likely than older workers to have hybrid or remote-work arrangements, they wanted more remote work than they reported having, with the gap between their preferences and actual arrangements (about 20 percentage points) being the largest across age groups. Thus, even as employers continue to stress on-site mentorship opportunities and articulate the benefits of on-site work, they may consider offering some flexibility to attract younger workers.
However, older workers (who may have years of experience under their belts) had higher preferences for remote work, meaning that young workers’ expectations and aspirations for mentorship may be left unmet. Prime working-age cohorts (those aged 25 to 54) were the most likely to have remote-work arrangements, with roughly 43 percent working remotely but nearly 60 percent wanting to do so.
Employers must balance attracting and retaining more educated, experienced, and higher-earning talent with the need to deliver a compelling on-site experience for younger workers. Cognizant that return-to-office mandates could drive away more senior talent, some companies are experimenting with alternate ways of co-locating. For example, “anchor weeks” gather employees on-site for specific chunks of time. Other companies require “all hands on deck” for training, onboarding of new hires, and other specific events.
Women prefer to work from home more than their male counterparts—whether or not there are children in the home
Women preferred remote-work arrangements seven percentage points more than men did overall. When examining additional demographic variables such as race, education, and income, women’s preference for remote work relative to men remained. Women also wanted significantly more flexibility than they reported having, with a roughly 20-percentage-point gap between their preference for remote work and their actual arrangements—almost twice that of men.
In the aftermath of the pandemic outbreak, women’s remote-work preferences were commonly understood to be a function of their caretaking responsibilities. However, the new data shows that childcare does not fully explain women’s preferences (Exhibit 3). The AOS data reveals a gendered caregiving burden, with working moms being seven percentage points more likely than working dads to regard childcare as an obstacle to completing their work. Women in the early years of family formation and childrearing (those aged 18 to 54) preferred remote work between eight and 13 percentage points more than men in the same age cohorts did, and this relative preference shrank among women with children of older ages (when children tend to leave the household). Still, with or without children in their household, women preferred remote work more than their male counterparts, by eight and seven percentage points, respectively.
Although there is no single explanation for this pattern, prior McKinsey research has found that women report remote work as more beneficial across multiple dimensions, including enabling them to be more efficient and productive, experience less burnout and fatigue, feel less pressure to manage their personal style or appearance, and better coordinate and communicate cross-functionally.
Remote work doesn’t solve all challenges, but its flexibility can make employment more accessible
Remote work doesn’t solve all of workers’ challenges. When comparing in-office workers with those who work remotely, there was only a two-to-four-percentage-point difference in the number who reported experiencing obstacles to satisfaction at work, including a hostile work environment, family care demands, the inability to learn new skills, and the inability to share one’s full self at work. In fact, remote work introduced some challenges: 22 percent of fully remote workers and 14 percent of partly remote workers identified accessing reliable, high-speed internet as a major obstacle to effectively completing their work (compared with 8 percent of fully on-site workers).
However, remote work and the flexibility it offers can make engagement in the labor market more accessible for some people, including caregivers and those with health issues. Regardless of gender, workers with children in the household preferred remote work by two to three percentage points compared with those with no children in the household. Respondents who had a mental health diagnosis or were receiving mental health treatment also preferred remote work over in-office work by six percentage points compared with other respondents. Employers can leverage remote-work arrangements to attract more candidates and expand their talent pools.
How employers and real estate owners and operators can appeal to workers
To attract and retain more talent, employers can tailor their remote-work arrangements and other flexibility offerings to their labor needs and market realities. Real estate companies can respond to changes in working patterns by rethinking approaches to office locations, providing more experiential elements, and offering more flexible leases that let companies test the operating model that gives them the most competitive advantage. The real estate industry can also reimagine residential and retail offerings to accommodate a population that commutes to work less frequently than in the past.
Organizations can use flexible work to compete for talent
Employers’ successful and customized adoption of flexible work can help them compete in the talent market. There was significant variation in respondents’ remote-work preferences by occupation and sector (Exhibit 4), although hybrid work arrangements tended to be more popular than either fully remote or fully on-site options, especially among office-based workers. Instead of an “all or nothing” mindset, where workers across a company follow a single model, employers can tailor arrangements to their sector and the specific role for which they are hiring. For sectors and occupations that must remain largely on-site, such as some registered nurses or surgical doctors, employers can consider other flexibility options to attract and retain talent, such as flexible scheduling or childcare support.
Many employers can benefit from implementing 12 capabilities that a McKinsey survey identified as crucial for developing successful hybrid work strategies, such as having a North Star vision for the workplace experience and iterative testing processes. A clear articulation of the purpose of on-site work and the expectations for managerial roles may be especially helpful in addressing the age gap in remote preferences. It can be critical to get buy-in from more experienced workers in senior positions so that they feel motivated to offer the mentoring experiences younger workers desire. A return-to-office mandate is likely to work best when everyone understands why it is needed and what benefits it brings.
Real estate owners and operators can find opportunities as working patterns change
Potentially lower demand for office space has been a persistent headline since the pandemic started. However, while McKinsey has modeled lower demand for office space by 2030 in many major global cities, less office space is not the only story. Instead, the real estate industry can respond to changing working patterns with new, more adaptive products and services.
Offices can offer tailored locations, experiential elements, and flexible leases. Offices that meet the demands of today’s companies, which are increasingly seeking workplaces that both attract talent and enable collaboration, are thriving. Real estate companies that evolve where and how they design offices and support their tenants with connectivity, sustainability, and technology will be best positioned for the future. Flexible leases can support companies that need to test how much and what kind of space is most effective for them.
Respondents with remote-work arrangements, on average, lived farther from their employers than workers who were fully on-site. Even when considering only workers whose employers have physical worksites, 46 percent of fully remote workers and 86 percent of hybrid workers lived within one hour of their employers (versus 93 percent of fully on-site cohorts). To “earn the commute” among workers who have the option to work remotely, real estate developers can prioritize building newer, higher-quality buildings, or what the real estate industry calls Class A. These new offices can be designed to prioritize well-being and collaboration, with tech-enabled spaces (for which 91 percent of occupiers are willing to pay a premium) and layouts that encourage mingling and spontaneous encounters. Office developers can also prioritize locations near public transit, which is particularly important to those working in hybrid formats: Of hybrid workers, 28 percent labeled public transit as a key infrastructure amenity, eight and nine percentage points more than fully on-site and fully remote workers did, respectively.
Residential and retail real estate companies can respond to new work patterns. The opportunities for commercial real estate aren’t limited to new approaches to offices. Real estate companies can recognize the sea change in working patterns and think strategically about what it implies across real estate assets.
Real estate companies and investors that collaborate with city and state governments and with infrastructure builders will be best positioned to revitalize downtown areas. Offices that are no longer occupied will need to be repurposed, potentially as residential buildings or facilities that enable last-mile delivery, a process that will require public–private collaboration and investment.
Retail real estate companies can recognize that with fewer people commuting to downtown areas, part of a “captive” audience has been lost. In response, more retailers may need to invest in experiential stores that give shoppers a reason to visit in person. Real estate owners and operators can respond by supplying the highly visible, ground floor spaces that work for experiential retail, surrounded by an ecosystem of tenants that both encourage and benefit from more foot traffic. Likewise, mixed-use developers can increasingly focus on compelling anchor tenants that draw audiences out of their homes—for example, sports facilities (such as stadiums or pickleball courts) or clusters of restaurants and art galleries that create a “food scene” or “art scene.” Ensuring easy transit and access will also be crucial in areas where there are fewer people working every day.
As people who used to commute to downtown areas spend more time away from urban cores, opportunities emerge to create smaller, satellite offices or flexible spaces (that could be used for coworking, events, or town halls) in strategic locations closer to where people live. Likewise, there could be a need for more entertainment and shopping options in suburban retail and mixed-use locations where people are spending more of their week. McKinsey research has demonstrated that when fewer people commute to downtown office buildings, foot traffic to nearby retail shops often falls. That creates an opportunity for mixed-use communities outside urban cores to create vibrant retail experiences and walkable districts that are appealing to a variety of age groups.
Within existing residential buildings, providing fast, reliable internet is crucial, with 63 percent of fully remote and 54 percent of hybrid workers citing it among their top three infrastructure amenities. As people work from home more frequently, there may be more demand for larger units with dedicated office space. Moreover, workers who no longer experience the daily socialization of being physically in an office may seek out local gathering spaces, creating an opportunity for companies to engage in community building within residential real estate owners.
Since the upheaval that began in early 2020, pundits and punters alike have tried to predict when things would “go back to normal.” Several years of data from McKinsey’s American Opportunity Survey (and a backward glance at history and human nature) suggest that cultural shifts rarely revert wholesale to an earlier time. More work-from-home models—or at least those that diverge from a full five days a week in the office—represent a structural change with staying power.
Companies that occupy offices can thrive in this new reality by understanding the role of remote work in talent attraction and retention and by overcoming the obstacles to mentorship and cohesion that remote work can create. Companies that build and operate commercial real estate can win in this new era by creating office, residential, and retail spaces that best enable professional and personal success. With the right approaches, processes, buildings, and infrastructure, the new era of work can be a truly bright one.
