What Does a Decline in Remote Jobs Mean to Future Work Models?

Curated by eBizDocs

This article first appeared in a BLOG post By Kaya Ismail on July 11, 2022 for CMS Wire.

Recent research by business data provider Coresignal found that remote jobs in North America are on a decline, totaling 11.9% of jobs in the first quarter of the year, compared to the record of 17.2% established in August 2021.

Several factors may be driving this decline. On one hand, many company leaders have clamored for a return to the office — even in a hybrid work mode — once the pandemic subsided. The numbers may therefore reflect those decisions gradually being implemented.

On the other, the current economic climate is forcing companies to rethink their workforce efficiencies, eliminating redundant positions and speeding up automation for others. This, too, may be reflected in the numbers.

One thing is for sure, with high levels of volatility and uncertainty, the future of work remains at an inflection point. There is still much debate over which work model is best, and the answer to that question is likely to differ from one company to another. For instance, in late June, Yelp publicly reiterated its commitment to remote work as the future of work by closing three offices.

So, what should leaders do to prepare for what’s ahead? Exploring the motivations behind the different work models may help shed some light on the best path forward.

The Factors Driving the Future of Work

Much has been said about the future of work in recent years. Although not under the best of circumstances, the past two years have provided an opportunity for companies and employees to explore different work modes — remote, hybrid, in-office or distributed work options — and find what best suits their needs.

At the mid-year point of 2022, there are three main factors potentially driving future decisions:

1. The Economy

With the threat of a recession, many companies are taking strict measures to adjust and stay afloat through the economic downturn. In recent months, there have been layoffs across multiple tech companies, including Bolt, Robinhood, ClickUp and Paypal — with remote workers bearing the brunt of these cuts.

Microsoft’s 2022 Annual Work Trend Index Report found that 50% of company leaders expect or will require their employees to return to the office full time within the next year. These companies are making significant cuts in their workforce, with some citing a mandatory return-to-office policy.

What does this mean for the future of remote work? Chris Martinez, co-founder and co-CEO of AI customer data company Idiomatic, sees the downturn as an opportunity for more companies to embrace remote work.

“At this point, everyone is looking to save money wherever they can. With the rising cost of goods and services, moving to or staying with a fully remote model is a win-win situation for employers and employees alike,” Martinez said.

Considering the cost of commercial real estate, shutting down offices and embracing remote work rather than laying off staff is a more viable option for companies hoping to cut down spending to get through an economic slump.

2. Productivity and Work Culture

Two of the most commonly cited concerns of companies that doubt the effectiveness of remote work are the loss of the close-knit culture that physical offices offer and the potential productivity decline caused by employees having to juggle distractions throughout the work day. Because of this, many company leaders and managers believe that productivity, collaboration and innovation are higher in an office environment.

However, the success of remote work — and, in turn, that of many companies — since the pandemic has proven otherwise. Scott Smith, CEO of software company CloudApp, is among those leaders who believe the past couple of years have demonstrated that the future of work is remote.

“It’s scary to turn away from decades worth of work methods, where synchronous, face-to-face meetings and handshake deals are how business gets done,” Smith said. “[But] I think we can challenge the assumption that work needs to be done in person.”

George Schoenstein, senior vice president of marketing and corporate communications at Atlanta-based Fusion Connect, found that employees are more productive in remote working environments.

“While some executives believe their workforce is more productive if they’re in the office, we’ve not found that to be true,” he said, adding that many of the company’s employees have demonstrated a higher level of productivity and improved satisfaction while working remote.

3. Employee Flexibility

Employees today have access to more opportunities and choices than ever before when choosing an employer. In fact, the Great Resignation and labor shortages of the past few years have shown that many workers will simply resign and seek positions elsewhere if their employer doesn’t meet their preferences — even if the pay is less.

Labor shortages are easing, though, and the balance of power between employers and employees is shifting in a slowing, inflation-driven economy. Yet, the number of companies globally still offering skilled workers the flexibility they seek is likely to continue tilting the scales in employees’ favor. And according to Smith, this can only positively impact the quality and performance of a company.

“Companies that mandate even three days in the office are probably going to annoy two out of every three employees,” Smith said. “The long-term effects of that discontent are bound to be more harmful than any perceived drop in productivity from a remote or hybrid culture.”

Hybrid Work as a Middle Ground

Of course, not all companies can do without physical offices. Industries such as manufacturing, retail or healthcare still need workers on site, even if it’s not for five days a week. This reality has fueled the concept of hybrid work as a compromise between employers and employees to adapt to changing times to avoid losing valuable workers.

The hybrid work model is the middle ground and future of work for many companies and employees. The key is striking the balance between what employees want, what employers need and what the job itself requires. To do so, many companies start by asking their workforce what they would like to see happen. That can lead to some eye-opening conclusions.

“We polled our employees at Fusion Connect late last year and found that only five percent wanted to be in the office at our Atlanta headquarters full time,” said Schoenstein.

For Fusion Connect, this meant the company had no choice but to transition to a hybrid environment. By doing so, it could take advantage of a broader talent pool while minimizing the risk of alienating current, local employees who sought greater flexibility.

No work model is perfect, and companies need to be careful in how they choose and implement the model for their particular future of work. The hybrid model, for instance, can cause misalignment between remote employees and in-office employees, as Martinez pointed out.

There are still numerous hiccups to overcome. But ensuring a positive employee experience and engagement through better collaboration, greater transparency, equal opportunity and a healthy work-life balance is likely to be the key to a productive and successful company well into the future.