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In the nearly three years since pandemic precautions pushed remote work into the mainstream, companies are negotiating a “new normal” in an environment that some say gives workers an upper hand: hiring is harder. has become popular, and employers in a good position to accommodate workers’ preferences.
That era is over. While the labor market remains tight despite many forecast America will fall into recession, most economists expect more layoffs and fewer job openings in the coming months as companies rethink how they operate. This week, Amazon said it would cut 18,000 jobs, or about 6 percent of its corporate workforce, and Salesforce said it planned to lay off 10 percent of its workforce, or about 8,000 staff members. Goldman Sachs is preparing to lay off about 4,000 people.
As the workplace changes, some leading CEOs see an opportunity to bring their employees back into the office. Goldman Sachs CEO David Solomon told in May 2021 workers prepare to return next month to encourage more personal collaboration and a shared culture. Elon Musk ended Twitter’s “work from anywhere” policy in his first email to employees after acquiring the company last year, saying they would be required to work at least 40 hours a week from the office. Bob Iger reduced the mandate of the office when he returned to Disney as chief executive in November, but he reportedly told the employees that “I have long-term concerns about the negative impact on those who have decided not to spend much time in the office.”
But is the pandemic-inspired remote work experiment coming to an end? Economists studying a shift to more flexible workplaces say it is unlikely, despite pressure from some of the world’s most high-profile CEOs.
Hybrid work is establishing itself as the new normal
Last year, remote work stabilized well above pre-pandemic levels, according to data compiled by a group of researchers from Stanford University, the University of Chicago and the Instituto Tecnologico Autónomo de México.
In 2019, about 5 percent of full paid work days in the United States were completed remotely, according to Census data. But when the research group began collecting data for the US Survey of Working Arrangements and Attitudes (SWAA), a monthly poll Of workers, this proportion increased to over 60 per cent in May 2020. For the past one year, this percentage has been hovering around 30 per cent.
“We’ve all but reverted to retrospective trends in online shopping, permanently online,” said Nick Bloom, an economics professor at Stanford and co-author of the monthly survey.
Most common remote working position according to SWAA and many more other surveysThere is now hybrid work, with employees spending some days in the office and some working remotely. Companies, industries, and individual situations vary greatly on the preferences and feasibility of remote work, but on average, both parties have similar ideas about the ideal amount of time to spend in the office.
In the December SWAA survey, workers able to do their work from home said they preferred to work remotely about 2.8 days per week. His employers plan to allow him to work from home approximately 2.3 days per week. It’s not a big difference in expectations.
employees have clear reasons say they prefer to work remotely: they want to avoid the time and cost of commuting; They concentrate better without the chatter of the office; They feel that staying at home is better for their well-being. When consultancy McKinsey asked 12,000 job seekers last year about their reasons for looking for a new job“Flexible work” came in right behind “more pay or hours” and “better career opportunities.”
What often gets overlooked – and one reason some economists believe the recession will have little impact on changes to work arrangements – is that companies also benefit from allowing employees to work outside the office. Could
In a survey conducted by ZipRecruiter, an employment search site, job seekers said on average they would take a 14 percent pay cut to work remotely.
While the labor market remains strong, the economy is slowing, and companies are looking for ways to make their work more valuable without raising wages. And many of them say they are using remote work to do it.
“It’s not that there won’t be some loss of bargaining power by workers,” said Steven Davis, a professor at the University of Chicago and co-author of the SWAA, “it’s just that many employers have their own independent reasons for thinking so.” It is also beneficial for them for shift, partial shift, remote work.
Managers are having difficulty in reversing the changes
for one working Paper Published by the National Bureau of Economic Research, Mr. Bloom, Mr. Davis and others asked hundreds of senior business executives surveyed every month The Federal Reserve Bank of Atlanta if they expanded remote work as a way to “keep employees happy and ease pressure on wage-increases.” Thirty-eight percent said they had done so in the past 12 months, including half of executives working in sectors such as finance, insurance, real estate and professional services. Forty-one percent said they planned to do so in the next year.
The authors used executives’ estimates of how much they saved in wages by offering remote work, to conclude that it would cut companies’ wage bills by 2 percent over two years.
“It’s not very big,” said Mr. Davis. “But what it does suggest is that there are non-trivial benefits for many firms from remote working.”
A recession can make remote work more, not less, sticky. Recruiting more widely, in cities where the cost of living is lower than a company’s headquarters, may mean paying lower wages (although in some industries, such as technology, there is some evidence that different cities salary is low convergent,
Employees with the option to log in remotely may also take fewer sick days or decide to work remotely than they would previously have taken a day off to attend a friend’s wedding or extend vacation.
Of course, there are costs to remote work as well. managers and workers often disagree About which environment is most productive. And working virtually can involve security considerations, new software purchases and compliance headaches for hiring in multiple states or countries. But, Mr. Davis said, in many cases, the companies have already paid for those costs. “We had about three years of experience doing this,” he said.
Perhaps the most practical reason why companies may pause remote work during a recession is because it is difficult to cancel. Even Musk, a little more than a week after mandating full-time office work, reportedly clarified that it was required of all employees who wanted to work remotely. approval from a manager Willing to take responsibility (even at the risk of being fired) to ensure excellent work.
“Many, many companies have insisted in recent months that people come back to the office five days a week, only to reverse that mandate within about a week after hearing that they would lose their best and brightest, said Julia Pollack, chief economist ZipRecruiter.
“Remote working isn’t just used in a tight labor market as a type of advantage that will be lost in a slack labor market,” Ms. Pollack added.
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