?While the 3.6 percent unemployment rate is just a tick above the lowest rate in the last 50 years, the signs of an impending recession are mounting—if the country isn’t in one already, as more than one analyst has suggested.
The tech sector is experiencing new rounds of layoffs, and several big-name companies laid off their recruiters in the past two weeks.
Prominent tech firms, including Google, Netflix and Meta, have announced layoffs or pulled back on hiring as they eye an economic slowdown. Experts said that’s likely to have a trickle-down effect.
Workers may see more rounds of job interviews while salaries stagnate, and they’re unlikely to have as much say on performance expectations or perks, CNN reported.
With layoffs or hiring freezes, managers will give employees’ performance greater scrutiny. Suddenly, “out of sight, out of mind” could take on new significance. Employees might lean more toward coming in to the office to show determination and a strong work ethic and get some in-person face time with their boss.
Companies are taking precautions not to favor the ones who do. TheWall Street Journalreported recently that HubSpot, a Boston-based digital marketing firm, plans to track promotions in the coming years to ensure people who rarely visit the office aren’t disadvantaged by “proximity bias,” said Katie Burke, its chief people officer.
Similarly, Citigroup requires three days of in-office work per week, and human resources head Sara Wechter told the newspaper that those who log the minimum amount of time will still have an “equitable opportunity to develop and advance their careers.”
However, employees shouldn’t hide out at home, either. They could be missing out on valuable interactions with company leaders: The CEO of Overstock.com said he has extended an invitation to his 1,500 workers to join him for lunch on Tuesdays. In eight months, only 10 did, according to The Wall StreetJournal.
[Jump to SHRM Research Institute’s sidebar: Suckers v. Slackers]
Buildings Start to Fill Up
Compared with last year, there is significantly more foot traffic in office buildings in major markets, according to a report from Placer.ai.
Year-over-year visits in the second quarter of 2022 were up 54.4 percent in New York City, 38.3 percent in Chicago, 84.6 percent in San Francisco and 31.2 percent in Boston, the report said. Compared with June 2019, visits in June 2022 were down considerably in New York City (-33.5 percent), Chicago (-40.9 percent), San Francisco (-60.4 percent) and Boston (-24.6 percent).
The return to the office will continue to accelerate, said Shelby Procopio, director of people and culture at The Procopio Companies in Boston. “I believe that in the coming months, we are likely to see the pendulum shift, giving employers more leverage. This shift may come in a variety of forms, and a return to office may likely be the first adjustment, as productivity, culture and a sense of connection have a high value for many employers, and this can be fostered more easily with a return to the workplace.
“Employers have also struggled to retain top talent and recruit new talent at reasonable salary rates, causing friction with internal compensation structures. I believe this will be another shift that we’ll see in coming months as employers obtain greater leverage.”
Below, more business leaders weigh in on why hybrid and in-person work are important to the success of their organizations.
Companies Wouldn’t Turn Down a Return-to-Office Worker
Roger McCarron, president and CEO of Project Management Advisors in Chicago, said the economic slowdown will create a market that favors employers, making companies more comfortable in pushing for increased time in the office.
“Five days per week might be a stretch, but I’m not sure the current occupancy rate, which is hovering just north of 40 percent nationally, is sustainable either.
“The conventional wisdom suggests that employees who are in the office get more face time and therefore get any available raises or avoid layoffs,” McCarron added. “We value office time not for appearances, but for the actual benefits of working in the same location. That includes increased exposure to other people, their skill sets and experiences; collaborating on an issue; receiving mentorship and professional development; and forging real relationships.
“I don’t believe there is an employer in the country who would turn down an employee’s offer to return to the office five days per week,” he said. “In the current employee-friendly market, however, where labor shortages are still very much a reality, very few companies are going to make that demand. They’re instead focused on flexibility, benefits and transparency and addressing compensation inequities.”
There may not be many employees willing to go all in on in-office work, however. Nearly half of 1,700 surveyed workers in the U.S. said they will “definitely” seek a remote position for their next job, according to the SHRM Research Institute. And 53 percent of respondents said leaders who mandate returning to the office after their employees worked well remotely are “stuck in the past.”
“This might be the moment to have an intellectually honest conversation about the trade-offs and benefits of in-office and remote work,” McCarron said. “That requires employers to acknowledge that businesses did not fail when people worked remotely, and employees must acknowledge that company performance is not the same when people aren’t together. We don’t yet have an objective measure on the differences between these two environments, so we will continue to debate the best way forward.”
No Staff Fallout from ‘Return to Office’ Policy
Paula Pryor, executive vice president and chief HR officer at Walker & Dunlop (W&D) in Bethesda, Md., said her company rose to become the No. 1 multifamily lender five years earlier than its goal, and much of that was based on her staff working remotely since the pandemic.
“Such achievement demonstrated that not only could people be productive at home, but they could break records,” Pryor said. “Such performance was empowered by every team member banding together and giving the extra discretionary effort needed to meet the business’s needs. Such outperformance is a true measure of culture, not productivity.”
Pryor said W&D’s established culture rooted in collaboration, care, tenacity, drive and insight carried the firm into the pandemic, noting that “getting back to the office is not a short-term issue, but a longer-term priority as we remain steadfast in our commitment to building a culture where people matter.”
Pryor said her colleagues during the past two years have expressed frustration that when they have come to the office, other co-workers are still at home.
“We want our employees to come to the office with purpose, not to sit on Zoom all day,” Pryor said.
The company officially returned to the office this summer under its updated flexible schedule policy, which gives employees the option to work from home two days per week and flex their work hours between 7 a.m. and 7 p.m.
“We have encouraged teams to set one core in-office day each week and publish team members’ schedules to maximize time together,” she said. “Managers are tasked with finding ways to engage team members and help our many new hires better assimilate into the company and their roles.
“If you ask any [employee] what they like most about W&D, they will tell you that they like our people. Being in the office allows people to be human again, no longer reduced to a ‘Brady Bunch’-sized box. On Zoom, we miss out on 90 percent of nonverbal communications, and there is little opportunity for impromptu and sidebar conversations.
“In person, we can learn through osmosis and move beyond scheduled interactions. Life happens in the present. It truly is in all those little moments where we see and treat each other as individual human beings–those interactions are what make our culture, that is the ‘Walker Way,’ ” named for W&D Chairman and CEO Willy Walker. “So far, we have not experienced fallout from returning to the office beyond one resignation.”
Office Is Ideal for Heads-Down Work
Pophouse, an interior design studio in Detroit, recognizes that different types of work require different settings, according to its president, Jennifer Janus.
“As such, we have not created a policy that mandates certain days or a certain amount of time in the office. Instead, we look at the activities we are doing and plan our in-office time around them. All team meetings, brainstorming or innovation sessions and social gatherings are more impactful in person and in the office.”
Janus said some team members rely on the office for their heads-down work.
“Our office space needs to be flexible and supportive of both collaborative and solo work, while also providing the amenities that people don’t have at home. While we don’t mandate when or how much our team needs to be in the office, we want to ensure it’s a place where they know they can be productive, connect with our culture and collaborate with teammates.”
Employers ‘Uncomfortably’ Adopted Remote Policies—but They Should Keep Them
Kurt von Koch, CEO of FM:Systems, a management consulting firm based in Raleigh, N.C., said, “With unemployment being at generationally low percentages, many employers have been uncomfortably adopting a hybrid approach and flexible work arrangements as an incentive—and in some cases even a necessity—to enticing employees to join their teams or to stay.
“With an economic decline where unemployment increases, we can expect to see many employers push back from that flexibility we have seen lately. However, I believe for most organizations, that decision will be a mistake.
“When possible, the flexibility co-workers have experienced of late is more ideal, more equitable and, in the end, more productive. It needs to be combined with purposeful and practical comings together to encourage the connection, culture-building and problem-solving that can only happen after sharing a meal together or bumping into one another accidentally in the hall.”
Von Koch has seen his co-workers performing more effectively and productively in a hybrid approach.
“Ostensibly, we have split the drive time in half: half going to additional work time and the other half going to family/personal time,” he said. “This has seemed like a fair trade. That said, you miss out on that casual interaction in the hallway and that quick pop-in conversation that Teams and Zoom just can’t seem to replicate.”
Von Koch said that an economic downturn means many organizations will refocus their workplace around how it enables them to better achieve their mission.
“This more thoughtful approach will lead to a massive rationalization of the real estate portfolio to align with the organization’s mission but doesn’t necessarily mean every organization needs less space. With that, I believe we’ll see more companies [make] decisions about work arrangements that reflect their mission and needs as well as the right type, locations, and mix of offices, desks, and collaboration spaces.”
Paul Bergeron is a freelance writer based in Virginia.
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Suckers v. Slackers: How Different Perspectives Affect the Remote Work Debate By Mark Smith, Ph.D. A SHRM Research Institute survey from the second quarter of this year asked respondents for their perceptions of remote work and remote workers. Just over 1,700 participants from a broad range of jobs and industries responded. Of these participants, 457 were fully remote, 510 were fully onsite workers and the rest were some combination of remote and onsite. We found that there were important differences between currently remote employees versus onsite employees. For example, when asked their beliefs about how many hours these groups are working, 44 percent of onsite workers believed that remote workers are working fewer hours than onsite workers. However, only 8 percent of remote workers shared this belief about remote work. Another question asked about perceptions of productivity, and again, the results showed huge differences depending on who was responding: 35 percent of onsite workers believed that remote workers are less productive than onsite workers, but only 5 percent of remote workers shared this sentiment. These differences in beliefs about remote work are massive and reveal major disconnects between these groups. These SHRM research findings show key differences in how remote employees are viewed. From the perspective of traditional onsite employees, remote employees are seen as slackers. They are not as productive and don’t put in the hours than onsite workers do. Conversely, remote employees disagree with this assessment, believing that remote folks are generally hard-working employees who often work longer and better than onsite employees. On the other hand, it is also clear that remote workers do not see any major benefits of onsite work. In fact, they largely view companies that force onsite work (when remote options are otherwise viable) very negatively. And workers who must work onsite waste a lot of time and money. Onsite workers are viewed as suckers who are forced to be in a bad position that minimizes their flexibility and harms their quality of life. These SHRM research findings are important and shine a light on real and important differences in beliefs. Further, company leaders and executives are likely in the onsite work group and may share the belief that remote work is not real work. We see these different belief systems playing out in both boardroom and lunchroom discussions. Through it all, it is important to note that differences in job performance for remote employees or remote organizations have not been established. It could be that traditional in-person environments are more conducive to effectiveness and success for some roles or types of organizations. Good empirical research—such as a study from researchers at the University of Chicago—will address this, but the quality research will take some time. At the SHRM Research Institute, we will do our best to elevate good research studies on this important topic and ensure that SHRM members and the general public find out about the results. See all of the SHRM Research Institute’s work here. Mark Smith, Ph.D., is director of HR thought leadership at the SHRM Research Institute. |