Hey team: Weaker hiring means back to the office

Zoom Communications

09/10/2024 08:00

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are his own.)
    By Francesco Guerrera
       LONDON, Oct 8 (Reuters Breakingviews) - When it comes to
where people work, bosses are from Mars and staffers are from
Venus. The planets, briefly aligned, are now colliding. 
Employees have grown to appreciate the advantages of avoiding
commutes while chief executives are increasingly frustrated by
the drawbacks from having tasks completed remotely. This tension
is causing resignations and recriminations, but weaker labor
markets create a stronger gravitational pull back to the office.
    The traumatic and tragic Covid-19 outbreak sparked a seismic
shift in the way people do their jobs. In 2019, U.S. workers
earning more than $20,000 worked from home less than 8% of the
time, according to surveys conducted by WFH Research. By May
2020, at the height of pandemic-induced lockdowns, the
proportion surged to 62%. It has since settled at nearly 30%, or
a little less than two days per working week. The worldwide
average is roughly the same, the European Bank for
Reconstruction and Development found. 
    Overall, some 100 million people in Europe and North America
work on a hybrid schedule. By and large, they love the
flexibility, don’t feel any less productive because of it and
would like to keep the arrangement. Employers are less
persuaded. Worried about expensive offices that sit vacant,
fraying corporate cultures and falling productivity – or simply
the loss of control over labor – many of them are restricting or
completely scrapping work-from-home policies. 
    The disconnect could have long-lasting effects. For staff,
the main tradeoff is clear: less time commuting means more time
on the job. A study of more than 10,000 skilled employees at HCL
Technologies, an Indian IT services provider that went fully
remote during the pandemic, concluded that they worked longer
hours, largely because they didn’t need to travel to the office.
The same research also discovered, however, that productivity
slipped because staffers spent more time on calls and less of it
collaborating with colleagues and being coached. For bosses, the
biggest risk is that ordering people back to offices will prompt
them to leave. Hybrid working at Chinese online travel portal
Trip.com reduced quitting by a third, academics Nicholas Bloom,
Ruobing Han and James Liang found. The flight risk may be
receding because of weakening labor markets, but retaining
workers disgruntled by the dismantling of a structure they
cherish is dangerous for the culture, too.   
    Some companies have decided the benefits outweighed the
costs. True to their reputation for driving workers hard, in
return for large paychecks, U.S. banks such as Goldman Sachs
 GS.N  and JPMorgan  JPM.N  brought senior staff back to the
office long ago. Beyond financial services, PC maker Dell
Technologies  DELL.N  and retailer Walmart  WMT.N  are among
those requiring corporate staff to work on site.  Even Zoom
Video Communications  ZM.O , the videoconferencing provider that
is practically synonymous with working remotely, asked employees
who live within 80 kilometers from the office to turn up there
twice a week. Thomson Reuters  TRI.TO , the parent company of
Breakingviews, requires most senior employees to be in the
office three days a week and junior staffers to go in two days a
week. At the other end of the spectrum, Yelp  YELP.N , the
business reviews site, has been fully remote since 2022. Chief
Executive Jeremy Stoppelman called the office “a legacy
technology” and hybrid work “hell.” 
    The latest, and loudest, salvo came last month when
Amazon.com  AMZN.O  boss Andy Jassy sent a company-wide memo
that opened with “Hey team,” before becoming decidedly less
jovial. He ordered  Amazon’s 350,000-plus corporate employees to
return to the office five days a week starting next year. Some
were outraged. Although disgruntled workers tend to be
overrepresented in surveys, nearly three-quarters of 2,500
polled at the e-commerce giant by Blind, a professional social
network, said they were considering looking for a job elsewhere
following the missive. They are not alone.
    More than a third of U.S. workers would like to be fully
remote, but employers only plan to allow it two days a week on
average over the next year, WFH Research found. Outside the
United States, employees would like to work about two days a
week from home, while companies prefer it be less than a day,
per the EBRD. 
    The job market mirrors the mismatch. In August, the share of
remote job postings on LinkedIn in Europe, Middle East, and
Africa fell by 11% compared to a year ago. Yet the share of
applicants seeking remote jobs increased by nearly 17% over the
same period. Something has to give. Employees appear willing to
accept a lower salary in exchange for avoiding the office
sometimes. The average worker values working from home two to
three days a week at around 5% of annual pay, although the EBRD
discovered that women, parents and those with longer commutes
value it even higher. The findings suggest that in addition to
lower real estate expenses, companies may save on wages. And
more Zooming seems to be casting a positive glow on some
employers. At Yelp, for example, nearly 90% of employees said
they would recommend it as a place to work, according to
internal data. 
    Many bosses, however, remain sceptical. In his memo, Jassy
said that being in the office makes it “easier for our teammates
to learn, model, practice, and strengthen our culture.” And when
researchers asked managers in 24 countries about the performance
of remote workers in 2020, nearly 40% said they were worse than
their office-based colleagues. 
    The CEOs who prefer just to have their staffs back in the
same place have an increasingly powerful ally: weaker job
markets. For now, unemployment rates are historically low on
both sides of the Atlantic. They may not stay there much longer,
however.  In the United States, the number of job openings is
down by 14% in the year through August, and resignations
recently hit their lowest level in four years. At the same time,
corporate chieftains in the euro zone expect to cut staff for
the first time since early 2021, according to a survey by credit
rating agency S&P Global. 
    If either bloc were to enter a recession, joblessness would
jump more significantly. With fewer employees inclined to quit,
more of them should brace for a “Hey team” note of their own.

    Follow @guerreraf72 on X
    

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Working from home in the US has recalibrated    https://reut.rs/3U0W5oi
US job openings are down a third from recent peak    https://reut.rs/3Yfe1OD
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 (Editing by Jeffrey Goldfarb and Streisand Neto)
 ((For previous columns by the author, Reuters customers can
click on  GUERRERA/ 
francesco.guerrera@thomsonreuters.com))