It has been four years since Covid caused a seismic change in how (and where) people work. After nearly two years, many organizations insisted on people coming back to the office, leading to a rise in hybrid work and other compromise solutions. But are North America and Europe handling things the same? The evidence says no.
There are multiple factors at work that indicate a disparity between what the workplace looks like in various countries.
The return to office rate
In the US, just over 50% of employees have returned to the office full time, the rest continuing to work remote or partly-remote in new hybrid arrangements. European numbers (with the exception of London) are much higher. The average rate is slightly over 70%.
Major European centers such as Amsterdam, Paris, and Madrid have reached almost 90% primarily in-office numbers.
The labo(u)r market
One factor that influences whether people are returning to the office seems to be the unemployment rate. In the US, it currently sits at near-record lows (3.4% in most states.) In the EU, the unemployment rate is double that, at about 6.4%. This gives American workers a bit more leverage in negotiating with their employers. While the average US pay isn’t going up, one of the perks being negotiated is schedule flexibility and hybrid work. The harder it is to find employees, the less employers seem to be willing to make returning to the office full-time a hill to die on.
Office space
In major European centers (again London is an outlier, which we’ll explain later) there is a shortage of office space, and that’s been the case for years. The vacancy rate in commercial centers sits at 7.6% in 2024. IN many US cities, the vacancy rate has reached 20% and is climbing.
Many American companies renegotiated leases, downsized their footprint, or even changed addresses during the Covid downturn. There is a lot more confusion in the US Market about how much space is needed and how to sustain the expenses, questions which haven’t been answered in the way they have in the EU.
It also is clear that remote work is just harder in some European countries. Houses and apartments are smaller and more crowded than in North America, with less space available for productive home working.
Why the difference - and what’s up with London?
Studies from commercial real estate analysts indicate there are several reasons for the difference, and it boils down to lifestyle choices.
- Most Europeans have far shorter commutes than Americans, and are more comfortable with public transit, which in many ways reduces the stress and cost of commuting. Going back to the office doesn’t take as long, costs less, and allows for more worklife balance.
- Culturally, most American companies are more geographically dispersed and thus spend less time together anyway. Work (especially in France) is a very large part of the social environment and face time is considered more valuable.
Among European cities, London is the outlier. The hellacious commutes, expensive real estate and the number of international companies headquartered there (requiring distance and time zone accommodations anyway) makes the remote work situation much more like New York or Chicago than Berlin. Even pre-Brexit, the approach to remote work and office culture was less European than most other cities.
The growth of hybrid work (and the need for US and European countries to be on the same page occasionally) may change this imbalance over time. In the meantime, it will be interesting to see if the approach to work flexibility and remote work continues to evolve differently, in different parts of the world.
