(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 of 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.