Summer is Over. Who’s Going Back to the Office?
In the midst of recovering from the Fed's 22-year high Interest rate hikes, U.S. job growth, while still solid, continues to show signs of slowing. Many companies are taking advantage of a cooler labor market by calling for higher in-person hours for their employees. BlackRock, Disney, JPMorgan and Amazon are some of the big names who’ve recently imposed return-to-office policies.
Some employers are taking extreme measures to get people back, tracking attendance or threatening to terminate workers who protest. For example, Amazon has event resorted to emailing some employees to warn them that, based on their badge swipes, they hadn’t been coming into the office for a sufficient number of days. The reaction from employees was swift. The company’s Slack was on fire with employees venting about what they perceived as a “tone-deaf email” and a lack of transparency around how the tracking worked. Work from home employees are starting to be put on notice of mandated in office work and they are not fans of this directive.
Employees Vs. Employers: A Disconnect
Since Covid-19 restrictions began to ease, some employers especially in the tech and financial sectors were quick to call for employees to return to work. Many believe in-person work enhances productivity and collaboration. While in many cases this may be true, the effects of the pandemic are still very prevalent. For example, A report by The U.S. Census Bureau estimated more than 468,200 residents left New York City between April 2020 and July 2022. These residents purchased homes in less densely populated areas and are now locked in to mortgage rates that likely hover around 1-3% compared to the 5.5% interest rate they would incur if they decided to move. Despite having the largest economy, the US only ranks 12th in public transportation. The options for many workers now are such: wake up a few hours earlier and get home a few hours later in order to commute to and from work or incur the expense or relocating back to the city…or get fired.
Evidently, this has led to the exact opposite effect of what many employers wanted: a more collaborative environment. The return-to-office mandates and blunt force in which they are being implemented are just further evidence of recent trends pitting employees vs employers regarding more than just hybrid work. Earlier this summer the Teamsters Union, UPS’s worker’s union, fought one of the most financially intensive battles with UPS ultimately resulting in full-time drivers earning close to $170,000 in annual pay and benefits by the end of the five-year agreement, far above the industry standard. In another instance, when Amazon’s return-to-office policy was imposed, some employees walked out in protest and circulated a petition to nix it. However, as the labor market cools, employees may begin to lose some of this power.
Reaching A Compromise
Human capital is arguably an organization’s most precious asset, therefore reaching an healthy equilibrium is key. Reaching a compromise between companies and their employees suggests hybrid work arrangements built upon open communication, flexibility, and a focus on the needs and preferences of both parties. Here is how can you facilitate a successful compromise:
Survey and Assess Employee Preferences: Start by surveying your employees to understand their working preferences. This can help you gauge how many employees are interested in remote work, in-office work, or a combination of both. Consider factors like job roles, personal circumstances, and productivity concerns. Remaining flexible and transparent is key in instilling a nurturing culture where employees feel their concerns are being listened to. Establishing a framework for ongoing assessment and monitoring of changing preferences as well as feedback on what works and what doesn’t will help foster an environment for collaboration and compromise.
Performance Metrics: Establish clear performance metrics and evaluation criteria for all employees, regardless of their work location. Focus on results and outcomes rather than just hours worked. That being said, these results must be measured and tracked and include the components that employer’s see as most valuable to their companies’ success.
Equity and Inclusion: Pay attention to potential equity and inclusion issues that might arise between remote and in-office employees. Make sure remote workers have the same opportunities for career growth, promotions, and visibility as their in-office counterparts. Organizing regular team-building activities and collaboration sessions that include both remote and in-office employees can help maintain a sense of unity and collaboration.
Psychological Safety: Creating a culture which fosters employee engagements, embraces creativity and improves well being can be a win-win by boosting team performance and reducing absenteeism.
A slowly cooling labor market, 22-year high interest rates, and all subsequent effects of the surge in demand following the COVID-19 pandemic are intersecting. Will the labor market, having embraced remote work hold their ground or will employers return to their pre-pandemic policies. Either way, the future of culture and productivity in the workplace depend on the outcome. Establish a great relationship with your employees by understanding their preferences, nurturing collaboration and reaching a compromise. Stepping on this pedal now will be a catalyst for success.
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