Remote work hinders training for junior staff, Fed study shows

Remote work drives a significant portion of the recent surge in youth unemployment as companies find it difficult to mentor less-experienced staff in distributed environments, according to a study by the Fed New York on Monday.

Economists revealed that remote work explains 64% of the recent increase in unemployment among young college graduates, while the timing of this surge indicates that remote work—not generative artificial intelligence (AI)—explains the bulk of the rise.

The study highlighted that the average unemployment rate for college graduates under 29 rose by 20% from 3.1% in the 2017-19 period to 3.7% in the 2022-25 period.

The researchers found that the aggregate increase in the unemployment rate for young college graduates can be traced to remotable occupations, where the youth unemployment rate increased by almost 1% between the 2017-19 and 2022-24 periods.

The report noted that when people work next to their colleagues, they receive more feedback on their output and more mentorship, whereas this feedback tapers off dramatically when employees operate remotely.

The study concluded that a proprietary dataset from a Fortune 500 company showed that the firm hired fewer inexperienced workers when its offices closed during the pandemic, and it shifted back to hiring younger workers once offices reopened.