What the recession means for workers scrambling to return to the office

People enter the Goldman Sachs headquarters building in New York, U.S., Monday, June 14, 2021.

Michael Nagel | Bloomberg | Getty Images

The long-standing labor market is making it difficult for employers to control and forcing remote workers back into the office.

But times may be changing.

Amid various business challenges such as market volatility, rising inflation, lagging revenue and the risk of a recession, companies are slowing hiring and, in some cases, letting employees go.

Facebook’s parent company Meta, Twitter and Uber are just some of the companies that have cut back on plans for new hires.Uber CEO Dara Khosrowshahi wrote in an email to employees The company “sees recruiting as a privilege and carefully considers where and when to increase headcount.” Meta spokesperson tell CNBC “Given the expense guidance given this earnings period, we are slowing its growth accordingly.”

Carvana and Robinhood are just two companies that have recently experienced a hiring streak that is now laying off workers. “We believe that laying off Robinhood’s workforce is the right decision to increase efficiency, increase speed and ensure we can respond to the changing needs of our customers,” Robinhood CEO Vlad Tenev wrote in a blog post It was announced that the company would lay off about 9% of its 3,800 employees.

Netflix just laid off 150 workers.

Corporate policy experts say the rapidly shifting employer-employee relationship could give companies the ability to take a tougher stance against the full-time work-from-home arrangements many employees are pushing. In fact, they said, more companies may start urging employees to return to the office — at least a few days a week.

“The hybrid workforce isn’t going away, but it’s unlikely that employees simply refuse to come to the workplace will continue,” said Johnny C. Taylor Jr., president and CEO of the Society for Human Resource Management.

Before the pandemic, about 10% of the U.S. workforce was working entirely remotely, according to SHRM. “By the end of 2024, we believe that the number of employees working entirely remotely will be around 20 percent. But that still means 80 percent of the workforce will be in the office in some way,” Taylor said.

Since the Office began publishing the JOLTS report in 2000, there have been two recessions with very similar job vacancy trends, one in 2001 and the other in 2007-2009. What’s different about the current macroeconomic environment is that if a recession is imminent, the Fed will raise interest rates significantly, compared to 2001 and 2008, when the Fed raised rates down to zero. On top of that, job openings are more than double what they were before the previous two recessions.

Even so, the U.S. Bureau of Labor Statistics recently reported that the post-pandemic low for remote work was 7.7%, less than half the level of a year ago. “With or without a recession, that number is expected to continue to decline,” she said.

“Employers may ask you to meet them halfway,” Taylor Jr. said of the flexibility of work locations, but employers may define halfway points differently—three days at the office, two days at home; two days at home; Office, three days at home. Some companies may define it as four days in the office.

Recent data from New York City shows some changes in work arrangements, but the resiliency of the hybrid.

While Wall Street banks such as Goldman Sachs and JPMorgan Chase have insisted that employees return to the office full-time, others have taken a more employee-centric approach, either letting employees choose where to work or not following policies that Requires a certain number of days in the office.

As of mid-April, 38% of Manhattan commuters were in a physical workplace on average, but only 8% were in the office five days a week, According to the New York City Partnership. The percentage of employees working fully remotely dropped from 54% in late October 2021 to 28% in late April. Even ignoring the prospect of a recession and job losses, it forecasts an increase in reopenings after Labor Day, with nearly half (49%) of employees working in offices on average in September, with the largest bucket (33%) being every Wednesday sky.

As more companies begin to voluntarily welcome employees back or ask them to return, many are facing more resistance than expected.

For example, Ford is be surprised Few employees are returning to the office once the option is available, especially given that employee polls show they want to do both remote and in-office work.

“When we opened the doors to our employees on April 4 to welcome them back to the workplace — those who wanted to come in — the actual return to work was lower than we expected,” Ford chief people and employee experience Officer Kirsten Robinson in a recent CNBC Jobs virtual event.

Goldman Sachs CEO David Solomon Special push Get workers back for most, if not all, five days of the work week, calling it the work-from-home era”distortion.” Earlier this month, Solomon said in an interview with CNBC’s David Faber that the bank’s in-person attendance at its U.S. offices was between 50% and 60%, lower than the pandemic. The first about 80% of the numbers.

“We want people to come together generally,” Solomon told Faber. “It’s going to take some time, you know; behavioural shifts usually take time, and I think over the next few years our organisations generally come together.”

Still a job seeker’s market

Right now, this is still an employee market, so many companies are still on a good track in terms of flexibility. For example, some companies officially require employees to work in the office three days a week, but aren’t harshly critical of those who only work two days.

“Once you have more freedom, it’s hard to go back to restrictive stuff,” said Lori Dann, founder of the Presidential Leadership Council, a group of small business presidents, owners and partners. forum.

Companies are especially wary of wobbles given that a record 47 million people will quit their jobs in 2021, according to the Bureau of Labor Statistics. Gartner predicts that the annual voluntary turnover rate for U.S. workers could rise nearly 20 percent this year from the pre-pandemic annual average, implying that 37.4 million people will quit their jobs in 2022, according to the research and consulting firm.On top of that, the job market remains very tight, with the number of job openings outstripping the number of available workers 5.6 million in March.

“Companies have had a lot of resistance to get people back into the office,” Dane said. “Every time the job market turns back into the employers’ market, they’re probably going to be stronger, but I don’t think there’s any way to do that right now.”

However, many companies have lost patience with employees’ demands to work fully remotely, Taylor said. He cited the example of Apple, which in April began requiring company employees to come to work once a week. The company increased that number to two days a week earlier this month and plans to require three days a week starting May 23.

The policy, which also allows employees to work remotely for up to four weeks a year, has met with resistance from employees.group post An open letter garnered more than 3,000 signatures condemning the “rigid policy” being enacted. Apple also lost an AI executive, and Google left it under its return-to-work policy.While the company can hold its own, it has temporarily postponed plans Three days in the office due to Covid concerns. The two-day requirement remains in effect.

For many companies, working in an office is an important part of their culture, Taylor said. Other employers will also be more willing to say, “If you don’t like what we offer, look for another place to work,” he said.

Currently, many companies, including Amgen, Clorox, DoorDash, Spotify, Splunk and TIAA, continue to offer hybrid and remote options for eligible employees, often depending on the role. Many employees continue to choose to work from home, at least some of the time, the companies said. Many companies say their policies are under constant scrutiny.

“We currently have no plans to change, but we will continue to solicit employee feedback and make any necessary adjustments,” an Amgen spokesman said.

Kristen Robinson, Splunk’s chief people officer, said: “Entering the office is still voluntary at this time, unless it is necessary to perform a role in the office.” She said: “We want the team to decide how they work together, and they when to get together.”

For its part, Spotify, which provides employees with workplace choices, said it will launch a two-year research program to learn more about the impact of working from home on energy, innovation, collaboration and well-being.

Where does the bargaining power between workers and bosses shift

As for relative bargaining power, there is no doubt that today’s workers are benefiting from an unprecedented labor imbalance. The recession means fewer new job opportunities for workers, but the labor market currently offers nearly two job openings for every unemployed person, giving workers a lot of leverage to pick the career opportunity that best suits them.

“This affects everything from base pay to signing bonuses to remote work status,” Walden said. “As the labor supply-demand imbalance narrows, it will undoubtedly affect bargaining power.”

But Richard Wallquist, president and CEO of the American Workers Association, said the forces of balancing shifting may not be as important as past recessions. “Before Covid triggered the last recession, employers in the country were dealing with a skills shortage. Even if the economy relapses into recession, workers with skills that are in high demand today are likely to be in high demand,” he said.

As companies tighten their belts and become more cautious about bringing in new talent, job seekers are likely to receive fewer job offers in the weeks and months ahead, said William Chamberlain, Hirect’s career expert and head of marketing. , but he does not think workers will lose the foothold they have gained over the past two years.

“Workers will not be keen to simply abandon this balance, and employers must realize that satisfied workers are more committed and more productive than disaffected colleagues. In other words, it is too early to look for work out of fear. Recession Job seekers should keep their expectations high and not sell themselves short,” Chamberlain said.

This includes areas where employers are becoming more employee-centric, from the types of benefits they offer workers, to signing bonuses and increased workplace flexibility.

“While signing bonuses may be reduced, employers will continue to aggressively compete for qualified talent. There’s no turning back. Economic cycles happen. Workers will continue to benefit from a renewed focus on employee engagement,” Wahlquist said.

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