As terms such as ‘The Great Resignation’ and ‘candidates’ market’ hit the headlines, we explore why calling everyone back to the company HQ may not be best for business.
The moment many managers have been waiting for is here. As Covid-19 restrictions ease in countries around the world, offices can reopen and employees can return to them.
For business leaders who’ve found overseeing remote teams a challenge, it’s no doubt tempting to ask all staff to return full time to the office – and as quickly as possible.
In the aftermath of the pandemic, however, it’s becoming clear that the world of work has changed forever. Employees are less keen than ever on long daily commutes to company HQs, and many have been inspired to rethink their priorities. Workers are demanding more flexibility, empathy and trust from employers – and they’re prepared to vote with their feet if they’re disappointed.
What’s more, the hybrid working model – an approach that allows employees to split their time between home, the corporate office and a third location such as a flexible workspace closer to home – offers advantages for business in terms of profit, productivity and environmental impact.
All in all, smart CEOs have good reason to embrace a ‘new normal’.
The Great Resignation
‘The Great Resignation’ is a term coined by Anthony Klotz, Professor of Management at Texas A&M University. It describes the phenomenon of mass movement in the labour market – one of the main repercussions of the Covid-19 pandemic.
While the moniker might sound dramatic, business leaders should be mindful of the statistics that inspired it. Microsoft’s Work Trend Index survey of more than 31,000 workers around the world confirms that 41% – almost half the global workforce – are considering quitting their jobs in 2021.
Meanwhile, a summary from the US Bureau of Labor Statistics shows that more than four million people left their posts this April – the biggest spike in resignations on record.
According to a recent study by Stanford University, people who felt ambivalent about their jobs before Covid-19 may have been pushed to ‘resignation point’ by employers’ reactions to the crisis. As the pandemic recedes, a key concern for employees is whether they’re being pressured to return to the office full time. This is particularly pertinent for those who’ve shown they can remain effective while working remotely.
Dr LaNail R Plummer, CEO of Onyx Therapy Group, told Forbes magazine: “Forcing people to go back to the office communicates to employees that their company doesn’t value what the best work environment may be for [them].” She argues that pushing employees to work in ways that aren’t good for their wellbeing – and which are difficult to justify in terms of productivity – is likely to lead to resignations. “Some [people] are experiencing sadness about missing out on dinner with their families or the freedom to take a walk in the middle of the day,” she explains. “There may be frustration about... having to return to commutes that are mentally and physically taxing.”
According to Microsoft, 73% of workers want flexible remote work options to remain in place, post-pandemic – and smart business leaders are already embracing the hybrid model. IWG has added more than two million new users to its global network of flexspaces so far in 2021, via enterprise deals with businesses including Standard Chartered bank, NTT and Cisco.
A candidates’ market
Another issue that should give executives pause for thought is the likelihood that they’ll face a challenging market, should they need to recruit new talent.
Writing for Jobvite, Sandra Grund says: “What a difference a year makes – from a stalled job market in 2020 to one where many sectors are thriving and workers have the upper hand.”
The HR Director’s Sion Jones agrees: “The number of vacancies is outweighing the number of people searching for employment. As a result the market is highly competitive.” Jones also points out that, in line with recent ONS figures, “Salaries in general are on the increase. Inevitably, a shrinking pool of labour has an impact on rates.”
In the current climate, workers are “more willing to leave jobs they’re unsatisfied with, and expect more from companies they apply to,” says Grund. Likewise, Jones explains, “Employers need to review what they are offering when it comes to both salary and package.”
A recent IWG study found that, when faced with a choice between a 10% pay rise and the option to work in a hybrid manner, 72% opted for hybrid working. The survey highlights the shift in people’s priorities, and the premium many now place on autonomy.
“Many of today’s candidates are looking for positions that offer a degree of flexibility… [Perhaps] over their location or the hours they work,” argues Jones. “The flexibility of your opportunity could be the deciding factor between a candidate accepting your role over another company’s offer.”
Better for people, profits and the planet
The good news for CEOs is that empowering people to choose where they work maintains – and can even improve – productivity. Data backs up what good leaders know instinctively: happier, less stressed people make more effective employees.
Accenture has found that 63% of organisations with high-growth characteristics have enabled ‘productivity anywhere’ approaches, such as the hybrid model. Conversely, 69% of companies with negative or no-growth characteristics were focused on where their employees were based.
Firms who adopt the hybrid model can also bolster their bottom lines by reducing expenditure on property. Big companies including BP, JP Morgan Chase and Lloyds Banking Group have all stated their intent to shrink office space in the wake of the pandemic.
Elsewhere, research into the benefits of hybrid working conducted by top institutes including Harvard and Stanford Universities shows that remote workers can save an organisation as much as $11,000 a year, increasing profitability by up to 21%.
The dramatic reduction in travel associated with the hybrid approach also supports companies’ environmental, social and governance (ESG) agendas. “Companies of all sizes see addressing the need for their people to commute to work as the single greatest contribution they can make to reducing their carbon footprint,” says Mark Dixon, founder and CEO of IWG.
“Irreversible and accelerating fast”
According to Dixon, the shift to hybrid working is “irreversible and accelerating fast”. “Technology will continue to clear the path to change,” he says. “And herding people to the office is looking increasingly obsolete, expensive and inconvenient.”
As we recover from a global pandemic, perhaps it’s no surprise that people seem more determined than ever to balance work with life, embracing a change that will claw back precious time previously spent on commuting.
“The future of work is already with us,” Dixon insists. “And it’s only going to improve.”
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