Remote lives on (strongly) despite the obituaries high-profile firms want to write

If you were just paying attention to headlines in the mainstream media you would be forgiven for thinking that the bosses have won and remote work is declining and on its way to being the blip on the radar it was pre-pandemic.

In London The Financial Times reported professional services firm EY has started monitoring UK employees’ office attendance, with swipe card entry data being circulated at senior levels of the firm as some of its staff flout its hybrid working guidelines.

On Tuesday, Yahoo Finance reported computer giant IBM has directed all US managers must immediately report to an office or client location at least three days a week “regardless of current work location status,” according to a memo sent two weeks ago. Badge-in data will be used to “assess individual presence” and shared with managers and human resources, Senior Vice President John Granger wrote in the note.

Those working remotely, other than IBM employees with exceptions such as medical issues or military service, who don’t live close enough to commute to a facility must relocate near an IBM office by the start of August, according to the memo. Managers who don’t agree to relocate and are unable to secure a role that’s approved to be remote must “separate from IBM,” Granger wrote.

Last week The Guardian reported Bank of America is cracking down on employees who aren’t following its return-to-office mandate, sending “letters of education” warnings of disciplinary action to employees who have been staying home. The letter warned employees that failure to follow return-to-office expectations could lead to “further disciplinary action”.

Late last year Amazon told its managers that employees slated for promotions must comply with the company’s return-to-office policy, which requires them to be in the office at least three times a week. If not, they will need a VP approval, or their promotions will get blocked, according to an internal announcement.

These high-profile firms may make the headlines with their respective responses to the post-lockdown work environment but an analysis of the wider labour market shows how much the landscape has changed and doesn’t appear to be returning to pre-COVD working norms.

The Washington Post last week reported new research from the Katz Graduate School of Business at the University of Pittsburgh suggesting that office mandates may not help companies’ financial performances, but they can make workers less satisfied with their jobs and work-life balance.

The study analysed a sample of Standard & Poor’s 500 firms to explore the effects of office mandates, including average change in quarterly results and company stock price. Those results were compared with changes at companies without office mandates. The outcome showed the mandates made no difference. Firms with mandates did not experience financial boosts compared with those without. The sample covered 457 firms and 4,455 quarterly observations between June 2019 and January 2023.

“Return to the office is dead,” Nick Bloom, an economics professor at Stanford University and expert on remote work, wrote last November.

In May 2020, as the Covid-19 pandemic lockdowns were in full swing, 61.5% of paid, full workdays in the United States were from home, according to the Survey of Working Arrangements and Attitudes. That share fell by about half through 2022 as companies called employees back to in-person work.

However, that changed last year as the share of paid work-from-home days flattened, hovering around 28%, said Bloom in an interview with CNBC. That’s still four times greater than the 7% pre-pandemic level. The U.S. Census Bureau’s Household Pulse Survey shows a similar trend, he said.

Bloom added that data measuring the frequency of employee office swipe-ins shows that office occupancy in the 10 largest U.S. metro areas has flatlined at around 50% in 2023.

Long-term trends suggest the share of employees who work from home is only likely to grow from here, possibly starting in 2025, Bloom said.

Younger firms and CEOs also tend to be more enthusiastic about hybrid work arrangements, meaning they’ll get more popular over time as existing business heads retire, he added.

Recent employment tribunal cases in both Australia and the UK have upheld the right of employers to mandate employees to return to the office, emboldening some leaders to apply the stick rather than the carrot approach to luring employees back to the office.

Although I have not seen any data about the current state of the local recruitment industry’s location-of-performing-work policies I was fascinated to see in the UK that in-office work is becoming less prevalent if the result of surveying 195 owners and directors of UK-based recruitment agencies for The ‘Firefish: 2024 Recruitment Agency Report’ is representative of the wide UK recruitment industry.

 

 

As the Report noted;

As we head into 2024, agency leaders are demonstrating a resurgence in the popularity of a fully remote working model. Whilst the popularity of the remote-first hybrid model has declined from 39% to 21% YOY, a fully remote working model has increased from 14% to 30%. This suggests that those using a remote-first hybrid model at the start of 2023 have now transitioned to using a fully remote model.

Additionally, the popularity of a fully office-based model has declined YOY once again; falling to less than half of the level it scored at the beginning of 2022. In general recruitment agencies are becoming more remote and less office-based as the years pass.

I eagerly wait to see what’s happening in the local recruitment industry, especially as the gold-rush years of 2021 and 2022 are now well behind us and the fee-earning comparisons of mostly-in-the-office recruiters compared to mostly-remote recruiters, across a significant sample size of quarters, will tell a clear tale.

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