Study Reveals Remote, Hybrid Work Expanding Commuting Distances
A recent study conducted by economists from Stanford, WFH Research, and Gusto revealed a notable shift in the commuting habits of employees compared to pre-COVID times. Analyzing the addresses of workers and their respective offices, the study found that the average distance between homes and workplaces has surged from 10 miles in 2019 to 27 miles in 2023.
"In 2018, workers earning $10,000 to $50,000 lived on average 11 miles from work, compared to 12 miles for workers earning more than $250,000 per year. By December 2023, the distance for those making $10,000-$50,000 rose to 18 miles, while the highest earners increased to 42 miles," the findings stated.
Gusto effectively analyzed proprietary data from a panel of 5,800 firms, drawing insights from 300,000 predominantly small and mid-cap businesses utilizing Gusto for payroll services between 2018 and 2023. The data indicates a peculiar trend: while the mean distance between employers and employees' homes steadily increased since 2020, it has shown signs of leveling off since 2023.
This increase in distance can be attributed to the enduring impact of the hybrid-remote work culture catalyzed by the pandemic. Despite some companies transitioning back to in-office work, remote and hybrid work arrangements remain prevalent.
According to a recent Forbes study, 12.7% of full-time employees continue to work from home, while 28.2% are now on a hybrid model. However, remote work opportunities remain relatively scarce, constituting only 10% of roles listed on LinkedIn, as highlighted by the NYU Stern Economic Outlook Forum.
Interestingly, the study also identified significant shifts among specific demographics. Millennials and higher earners experienced the sharpest rise in distance between their homes and workplaces. Furthermore, employees aged 30 to 39 are now living the farthest away from their offices, with this age group witnessing the most significant increase in distance in 2023.
"The talent markets for employers and workers are getting much bigger, particularly for these high-earning people in really remote and high-tech industries who are in their thirties and who value this kind of flexibility," Liz Wilke, principal economist at Gusto told Business Insider.
Employees aged between 30 to 34 years experienced a staggering 180% increase in the mean distance between their homes and offices, soaring from 11 to 31 miles. Similarly, individuals in the 35-39 age bracket witnessed a substantial 190% rise in this distance, jumping from 10 to 29 miles.
"This finding – that parent-age workers have driven the rise of remote and hybrid work – reinforces previous research indicating that parents seeking flexibility in their careers are the most likely to work from home at least a few days each week," the study stated.
The study also reveals disparities in the distance between the workplace and employees' homes based on income levels. On average, workers earning between $10,000 to $50,000 annually lived approximately 18 miles away from their place of work. In contrast, those earning over $200,000 per year lived an average of 42 miles away from their workplace in 2023.
While larger corporations are urging their employees to return to in-person work, mid-size companies are opting to continue the hybrid work model. This approach not only allows them to reduce operational expenses but also grants access to a broader talent pool.