Business leaders think that the spread of remote work has had more negative effects than positive ones, but they also see the practice becoming ingrained, according to a new survey by the Federal Reserve Bank of New York.

Roughly two-thirds of respondents said remote work had a negative impact in four areas: workplace culture, cohesiveness, team environment, communication among employees, and training and mentorship. The upside for employers: more than half said that work-from-home makes it easier to recruit staff, and more than two-thirds said it helps to retain them.

The study comes as high-profile companies from Citigroup to Amazon.com are pushing to get more of their workers back in the office. The shift to remote work during the pandemic is enduringly popular with employees, but corporate chiefs worry it’s making their businesses less productive. Commercial property markets, and downtown businesses like restaurants, have also taken a hit.

According to the New York Fed’s survey, 68% of employees at service firms work in-person all the time and 13% entirely remotely, while the other 19% have a hybrid status, averaging 2.2 days per week out of the office. That balance isn’t seen to change all that much in the coming year. At manufacturing firms, 94% of employees work in person.

The study found that 25% of business leaders have changed policies over the past year to require more in-person work, while 17% plan to do that in the coming year. Overall, service firms would prefer more than three-quarters of their workers to be fully on-site – 9 percentage points higher than the current share.

Remote work is also changing the physical environment of the workplace. About one in eight service firms has reduced their office space over the past year, with an average reduction of 41%.

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