Many companies have ended their remote work policies by mandating that employees return to the office five days a week. Examples include Amazon, Dell, PwC, and JPMorgan. In fact, ditching remote work has become a popular trend among employers.
However, a recent study by workforce intelligence company Revelio Labs points out a significant challenge these companies may face: difficulty in filling vacancies.
Talent works from home. According to the study, companies that don’t offer hybrid or remote work options experience slower growth than those that provide flexible working arrangements. “Companies that are fully remote or flexible are able to grow faster,” study author Loujaina Abdelwahed told The Washington Post.
Revelio Labs analyzed data from companies that posted job openings since June 2022. The results show that companies advertising hybrid or remote positions had an average growth rate of 0.6%, compared to just 0.3% for entities offering only on-site roles. In other words, companies that provide flexible working hours fill new positions faster than those that require full-time office attendance.
Return-to-office mandates have consequences. Meanwhile, a study conducted by the University of Pittsburgh, the Chinese University of Hong Kong, and Baylor University found that RTO policies are devastatingly impacting employee turnover at S&P 500 companies.
Researchers discovered that many highly qualified employees are leaving their companies as mandates for returning to the office become stricter. This has led to a talent exodus, with individuals opting to work for companies that offer hybrid or fully remote work options. “Our study highlights brain drain as a significant cost of RTO mandates, even for the largest firms in the world,” the study points out.
Work-life balance. Additionally, the Randstad Workmonitor 2023 survey revealed that 73% of workers believe work-life balance is a core factor in selecting a job. Meanwhile, 57-61% of them said that a negative work-life balance would prevent them from accepting a job offer. Moreover, 67% of participants said their work-life balance improved once they began working from home.
Concern over covert layoffs. Companies are insisting on a return to the office despite scientific evidence suggesting otherwise. This has led to theories about backdoor layoffs gaining traction. A recent BambooHR survey revealed that some companies know some of their best employees will resign once they’re forced back into the office. This strategy could allow companies to reduce their workforce without having to pay severance.
Data shows that 18% of HR managers surveyed expected a higher resignation rate due to the RTO policies. Additionally, 37% acknowledged that they ended up laying off more employees than they initially planned because fewer employees resigned than expected.
Image | Annie Spratt
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