Apologies to The Clash, but “Should I Stay or Should I Go” is beginning to sound like the post-pandemic anthem of a labor market torn between sustaining telework arrangements and demanding people back in the office. Remote working, to some degree, has always been an experiment we’ve tinkered with over the years. Yet the pandemic hastened its spread and broad adoption. Practically speaking, most data indicate that telework has been successful, productive, and even profitable. Industries moved to telework rapidly, with a transition that was deemed fairly easy. What’s not as clear or simple is the plan for returning to office life. As the nonprofit news organization The Conversation pointed out, “Employees are feeling burned over broken work-from-home promises and corporate culture ‘BS’ as employers try to bring them back to the office.” So what do we do?
Workers and Employers on a Precipice
The encouraging volume of vaccinated people and relaxed social distancing guidelines have created a divide between workers and employers—is our new normal one where telework persists or where it perishes?
On May 6, Cathy Merrill, CEO of a D.C.-based magazine, wrote an op-ed that suggested her employees could lose benefits such as health care if they insisted on working remotely. The staff’s response> They refused to publish for a day. Their reaction mirrors others in which employees have threatened to quit if directed to end their remote working arrangement. Part of the problem also comes from nebulous or vaguely communicated post-pandemic office strategies. As McKinsey explained in an April article:
“Employees feel they’ve yet to hear enough about their employers’ plans for post-COVID-19 working arrangements. Organizations may have announced a general intent to embrace hybrid virtual work going forward, but too few of them, employees say, have shared detailed guidelines, policies, expectations, and approaches. And the lack of remote-relevant specifics is leaving employees anxious.”
The academic article in The Conversation—authored by Kimberly Merriman, David Greenway, and Tamara Montag-Smit, all workforce scholars—compiled research findings using, among others, “a dataset that a business and technology newsletter attained from surveying its 585,000 active readers.” They revealed three primary areas of concern for workers.
Workers made significant life decisions, particularly around relocating, based on solid and implicit promises from their employers. Many of them admitted that these promises were reneged by their companies.
- People relocated to a city at a distance large enough to require partial or full-time remote work.
- PwC found that almost a quarter of workers were considering or planning to move more than 50 miles from one of their employer’s main offices
- “Our early findings suggested some workers would quit their current job rather than give up their new location if required by their employer, and we saw this actually start to occur in March,” The Conversation authors noted.
Confusing Remote Work Policies
“Whether workers said they were staying remote for now, returning to the office or still unsure, we found that nearly a quarter of the people in our sample said their leaders were not giving them meaningful explanations of what was driving the policy,” The Conversation’s analysts said. “Even worse, the explanations sometimes felt confusing or insulting.”
The overarching explanation from these employers was that managers felt their talent were less productive at home. Statistically, that really hasn’t been the case. And the surveyed workers demonstrated that productivity goals were met or exceeded during the pandemic. The prevailing consensus was that some middle managers were simply afraid of losing relevance because most of their duties revolved around monitoring workers with “butts in chairs.”
Only a small portion of workers in the sampling performed by Merriman, Greenway, and Montag-Smit said their company “asked for input on what employees actually want from a future remote work policy.”
Corporate Culture “BS”
While maintaining a healthy corporate culture is paramount to business leaders, they may have missed a golden opportunity to engage with workers on the now pressing issue of how remote, hybrid, or traditional work policies will unfold as a sense of normalcy resumes.
Of course, the notion of corporate culture has never been entirely clear. Some define it as a set of rules. Others perceive it as an attitude. In the worst case, businesses misinterpret culture as an excuse to foster homogeny instead of diversity. This potential pitfall, of narrowing the culture to only individuals who appear to be like everyone else, is what puts the concept into question.
For the most part, company culture is not just a set of rules but a personality that shapes and is shaped by employees. It’s what inspires people, whether employees or customers, to identify with a company. As such, it can be constantly evolving and may sometimes break off into various subcultures.
Unfortunately, the pandemic contributed to the confusion. And because corporate culture is something shaped by and for employees (as a best practice), things have gotten muddled with employees expressing frustration that cultural efforts tended more toward dictation rather than collaboration.
“Many of the forum posts we reviewed suggested that employer efforts to do that during the pandemic by orchestrating team outings and other get-togethers were actually pushing workers away, and that this type of ‘culture building’ was not welcome,” wrote Merriman, Greenway, and Montag-Smit. They also cited examples of employee reactions to forced attempts at culture building. Here are a couple:
- One worker’s company “had everyone come into the office for an outdoor luncheon a week ago,” according to a post, adding: “Idiots.”
- As another worker put it, “I can tell you, most people really don’t give 2 flips about ‘company culture’ and think it’s BS.”
It’s not merely that workers feel their companies are making exclusive decisions on how to develop culture without employee input, it’s that many of the attributes they desire most appear to be vanishing:
“Surveys have found that what workers want most from management, on the issue of corporate culture, are more remote-work resources, updated policies on flexibility and more communication from leadership.”
Was Remote Working Productive?
If the consternation fueling businesses to demand the return of their workforces to physical offices is solely about performance, we need to examine how teleworking impacted it. A survey quoted by Bloomberg actually found a 5% uptick in U.S. productivity during the remote working period of the pandemic, Not only that: “The findings suggest the rapid adoption of new technology amid the pandemic will offer lasting economic gains, helping to boost sluggish productivity that has long weighed on global growth.”
The Pew Research Center found that of the 71% of employees working remotely, 54% wanted to continue. Here are some other data indicating the ease of teleworking for talent:
- Around 87% of workers said they had the technology and equipment they needed to work remotely without issue.
- In terms of meeting deadlines and completing projects, 80% said telework posed no obstacles.
- Close to 70% also discovered fewer distractions while working from home.
- And 64% actually felt more motivated being outside the office environment.
Business advisor and Catapult CSO Molly Hegeman, speaking with ABC News, also illustrated cost savings that arose during the pandemic’s remote work situation.
- People saved money on car maintenance, gas, tires, and oil changes. Some insurers offered discounts because vehicles weren’t in use as much.
- "You perhaps aren't paying a toll road fee, there's less meals out, there's less dry cleaning expense," Hegeman said. "So there certainly are tangible benefits there."
- Global Workplace Analytics research indicated that employees saved $640 to $6,400 annually by working from home.
- At some companies, productivity increased and so did the bottom line as things such as idle chit-chat and office gossip were minimized. "There are savings when you are cutting out wasted time and people can be more productive, focused in on their tasks or their responsibilities," Hegeman said.
According to CITO Research, businesses did recognize the power and benefits of mobility. Nearly 70% of all respondents cited improved business processes as the motivation to adopt a more mobile culture. I would imagine businesses also saved by not having OSHA-related safety problems to tackle or workers’ compensation from onsite accidents. However, all of that said, there are workers who long to return.
That said, telework disproportionately benefits certain positions and groups, as we noted in our eBook “New Talent Strategies for our New Normal.” For example, Nelson D. Schwartz covered the pandemic’s impacts on employees of color for the New York Times. A major part of the problem is the absence of networking and direct, interactive encounters that offices provide, which is where many Black and Hispanic workers foster visibility. Even worse, Schwartz explained, “As a result of the coronavirus pandemic, 27 percent of companies put diversity and inclusion efforts on hold, according to a survey by the Institute for Corporate Productivity, a research group.”
What to Do?
For companies that can’t stomach the idea of a fully or mostly remote operation, or which have employees who desire office life, a hybrid solution is best. Yet there remains a disconnect between executives and employees on how many days of remote work should be allowed and the structure of the arrangement, according to SHRM:
“More than half (55 percent) of 1,200 workers surveyed between Nov. 24 and Dec. 5 said they prefer working remotely three days a week. Meanwhile, 68 percent of 133 U.S. executives said workers should be in the office at least three days a week, citing concerns that company culture will not survive a purely remote work model. A survey Gartner conducted with 127 company leaders in 2020 found that only 30 percent of those leaders were concerned about maintaining corporate culture with a hybrid work model.”
Quoting Deniz Caglar, a partner at PwC and co-author of Fit for Growth: A Guide to Strategic Cost Cutting, Restructuring, and Renewal: "Your culture is not your office; it's what you do as an organization, how you work together. What you do does not change because you're working virtually.”
Hybrid Remote Work Model
The hybrid model of telework may be a complicated initiative to launch, but PwC believes it can succeed by following some core principles.
- Position. Some employees need to be physically present to accomplish tasks that can’t be performed at home, like maintaining sensitive files, overseeing onsite equipment, collecting mail, or other duties. The nature of the work and the specific jobs employees perform must factor in.
- Personality. There are differences in personalities. Some employees thrive while working from home and others are more comfortable commuting to a brick-and-mortar office. Businesses must survey their talent and determine which are most capable, productive, and happy with telework.
- Tenure. “Consider whether an employee has been newly promoted and needs to be in the office to work closely with his or her supervisor,” SHRM advised, “Also, is the employee someone new to the company who would benefit from being onsite? Pointing out that new employees will have little personal contact with departments and existing team members under this new model,”
- Timing. Is your office in a city or state where vaccination rates are high? If not, you may want to consider continuing with telework until people feel safe enough to return.
- Schedules. In most workforce analyses, there seems to be a consensus that a hybrid model is a series of 3: either 3 days at home or 3 days in the office. You’ll need to study your internal data to determine what makes the most sense for the employees and their organization based on historic performance, before and during the pandemic. However, if you need people in the office, it’s also important to create a schedule where the off and on days of workers don’t occur concurrently. You may need to create different remote schedules to ensure that your office isn’t empty for consecutive days.
One crucial consideration, often overlooked, involves payrolling. As we wrote in April, just because employees have the means and tools to relocate, employers can’t always payroll talent everywhere.
- The company must be a licensed entity in the target state.
- The company must legally be set up to perform business in that state or country.
- The company must be established for tax purposes in the state or country, with processes and approvals for handling statutory withholdings and more.
- The company must be able to file its corporate tax returns in the destination state or country.
- The company must understand all the wage and hour mandates of the state or country. Many factors differ across areas, including paid leave, severance, termination processes, benefit requirements, and others.
- The company must be prepared to adhere to employment protection laws that often vary by country, county, state, and city.
- All benefits and entitlements must be compliant (e.g., workers’ compensation, leaves of absence, short-/long-term disability, unemployment, vacation, holidays, etc.).
Compensation adjustments, though controversial, aren’t necessarily unjust. VMWare told its employees that they must accept a commensurate reduction in salary for relocating. Moving from the Bay Area to Colorado, for example, would incur an 18% pay cut. Moving to San Diego would only see an 8% drop. In general, companies often adjust pay rates relative to an area’s cost of living.
- Employers believe the move is a competitive approach to localizing compensation.
- State and local laws regulate benefits that employees are eligible to receive; workers who move may have to choose different health plans if the company’s insurer doesn’t offer coverage in a state. That becomes a new overhead cost for employers.
- Paid leave and sick benefits change across cities and states, which may force businesses to extend this kind of financial support where they previously had no obligation to do so.
- “Also, if there are any changes to your paycheck when you move, that will change how much you receive in matching contributions to your 401(k) since they're based on a formula tied to your earnings,” Jeanne Sahadi at CNN Business noted.
- In states where reciprocal tax agreements do not apply, workers could owe taxes in both their work and home states.
It’s Up to Business Leaders to Lead
There are no clean, nifty solutions, but business leaders must take charge in their approach to hybrid or fully remote work. And by that, I mean they must lead by communicating with employees, creating mutual strategies for success, analyzing their data to draw informed conclusions, and working to propagate culture, realizing that it’s not truly about a physical place. Diversity, too, should remain an enterprise-wide imperative. Workers need to be connected to the opportunities being created and have the skills for the in-demand roles, but jobs are often concentrated in counties that aren’t necessarily accessible to workers of color. There are cases where remote work helps hiring diversity by bridging this gap. There are also circumstances where diverse employees need an onsite presence to have a voice. But at the end of the day, we need to stop thinking about this as “business as unusual.” We must create a new normal that’s inclusive, equitable, productive, and good for morale.