People enter the Goldman Sachs headquarters building in New York, USA on Monday, June 14, 2021.
Michael Nagel | Bloomberg | Getty Images
The long-running employee market made it difficult for employers to rein in and send distant employees back to the office.
But times may change.
From market volatility, rising inflation, sluggish revenues and the high risk of recession to a variety of business challenges, companies are cutting back on employment and, in some cases, lay off workers.
Facebook parent meta, twitter, and uber are some of the companies that have backed the plan for new employees. Uber CEO Dara Khosroshahi wrote in an email to employees that the company would “consider the hiring as a special benefit and deliberately consider when and where we will add headcount.” A Meta spokesman told CNBC that “in light of the spending guidelines for this revenue period, we are reducing its growth accordingly.”
Carvana and Robinhood are two companies that have gone through recent hiring streaks that are now letting employees go. Robinhood CEO Vlad Tenev wrote in a blog post, “We are determined that these reductions in Robinhood employees are the right decision to improve efficiency, increase our speed and ensure that we are responsive to the changing needs of our customers.” About 9% of its 3,800 employees will be laid off.
Netflix has laid off just 150 employees.
According to corporate policy experts, a fast-moving employer-employee mobility could give companies the ammunition to take a hard line against the full-time work-at-home system, which has put pressure on many employees, according to corporate policy experts. In fact, they say, more companies will probably start pressuring employees to return to the office – at least a few days a week.
“The hybrid workforce is not leaving, but it is unlikely that workers will be able to maintain the status quo that refuses to come to work,” said Johnny C. Taylor Jr., President and CEO of The Society for Human Resource Management.
Prior to the epidemic, according to SHRM data, about 10% of U.S. workers worked entirely remotely. “By the end of 2024, we believe that the number of full-time employees will go down to about 20%. But that means 80% will still be working in the office somehow,” Taylor said.
Since the Bureau of Labor Services began publishing the JOLTS report in 2000, there have been two recessions with very similar trends in job openings, one in 2001 and the other in 2007-2009. What makes the current macroeconomic environment different, according to Jenny Walden, a work expert and Delipe’s CIO, is a leader in wages on demand, that if the recession is on the horizon, the Fed will aggressively raise rates, unlike 2001 and 2008, Where the Fed is lowering the rate to zero. The number of job openings at the top level is twice as high as it was before the last two recessions.
Nevertheless, the Bureau of Labor Statistics recently reported a post-epidemic low of 7.7% for remote work, less than half of the level a year earlier. “Hopefully that number will continue to decline, with or without the recession,” he said.
Taylor Jr. says of the flexibility of the work position, “Employers may demand to meet with them in the middle, but employers may define that midway point differently – three days at the office, two days at home; two days at the office, three days at home. Can be defined as four days.
Recent data from New York City shows some changes in the work system, but also the resilience of the hybrid.
While Wall Street banks, such as Goldman Sachs and JPMorgan Chase, have been adamant about bringing people back into full-time office, other firms have taken a more employee-centric approach, either allowing employees to choose where to work, or sticking to a policy. That office requires a certain number of days.
According to The Partnership for New York City, as of mid-April, 38% of Manhattan office workers had an average of one physical workday on weekdays, but only 8% were in office five days a week. The share of office workers fell completely from 54% in October 2021 to 28% at the end of April. Even without considering a downturn and the prospect of fewer jobs, it is predicted that the rate of return to work will increase after Labor Day, with an average of half (49%) of workers in the office on weekdays in September. The largest bucket (33%) three days a week.
As more companies begin to volunteer to welcome employees or require them to return, many are facing the expected resistance.
Ford, for example, was surprised at how very few employees returned to the office after the option became available, especially in an employee vote that suggested they wanted a mix of remote and office work.
“When we opened our doors on April 4 to welcome our employees to the workplace – those who wanted to come – the numbers that actually came back to work were lower than we expected,” Kearsten Robinson, Ford’s Chief People and Employee Experience Officer, said during a recent CNBC Work Virtual event.
David Solomon, CEO of Goldman Sachs, specifically called for workers to return most of the work week, even if not every five days, calling the era of working from home a “perversion.” Speaking to CNBC’s David Faber earlier this month, Solomon said personal presence at the bank’s U.S. office ranged from 50% to 60%, down from about 80% of pre-epidemic size.
“We want people to get together normally,” Solomon told Faber. “It will take some time, you know; behavior change usually takes time, and I think in the next few years, our organization will usually come together.”
Still job market
At the moment, it’s still much more of an employee market, so many companies are still walking a fine line in terms of flexibility. Some companies, for example, officially require employees to work three days a week in the office but are not strict for those who only come to the office two days a week.
“It’s really hard to go back to something limited once you have more freedom,” said Laurie Dan, founder of the Presidents Leadership Council, president of Small Business, a forum for owners and partners.
Companies are especially wary of rocking boats in the wake of a record 47 million people quit their jobs in 2021, according to the Bureau of Labor Statistics. Gartner predicts that the annual voluntary turnover of U.S. workers is likely to jump about 20% this year from the pre-epidemic annual average, meaning that 37.4 million people will lose their jobs in 2022, according to research and consulting firm. After all, the job market is very tight as the number of job openings in March exceeded the available pool of 5.6 million workers.
“Companies are getting a lot of resistance from people coming back to the office,” Dan said. “Whenever the job market changes again in the employer’s market, they may get stronger, but I don’t think there’s any way to do it now.”
Many companies, however, are losing patience with the demands of employees for completely remote work, Taylor said. He cited the example of Apple, which started coming to corporate employees once a week in April. The company has ramped up to two days a week earlier this month and the plan requires three days a week from May 23.
The policy, which allows workers to work up to four weeks of full-time work, was met with resistance from workers. The group released an open letter, collecting more than 3,000 signatures, refusing to declare a “strict policy.” Apple also lost to Google a top AI executive who bolted its workplace return policy. Although the company may have stuck to its guns, citing Covid’s concerns, it has temporarily delayed plans for a three-day office visit. The two-day requirement remains in place.
For many companies, being in the office is an important part of their culture, Taylor said. Other employers want to say, “If you don’t like what we’re offering, find 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 qualified employees, often depending on the role. These companies say that many employees choose to work from home, at least for a while. And many companies say their policies are subject to ongoing review.
“We have no plans to make changes at this time, but we will continue to seek feedback from our staff and make any necessary adjustments,” said an Amazon spokesman.
“Coming to the office at this time is voluntary, unless one has a role to play in the office,” said Kristen Robinson, Spunk’s chief public officer. “We hope the teams will decide how they work together and when they will meet individually,” he said.
For its part, Spotify, which prefers where employees work, says it will conduct a two-year research initiative to further understand the impact of work from home on energy, innovation, collaboration and well-being.
Where the bargaining power will be transferred between the employee and the boss
For the sake of relative bargaining power, there is no question that workers today are benefiting from unprecedented labor imbalances. A recession means fewer new job opportunities for workers, but the labor market currently has about two job opportunities for every unemployed person, giving workers significant benefits in choosing and choosing the career opportunities that work best for them.
“It has affected everything from the base salary to the signing of bonuses in remote work positions,” Walden said. “As the supply-demand imbalance shrinks, it will undoubtedly affect the bargaining power.”
But according to Richard Wahlquist, president and CEO of the American Stuffing Association, the ability to change the balance may not be as significant as the recession of the past. “Employers in the country were dealing with a shortage of skills before the last recession began. Today, workers with high demand skills are likely to have high demand even when the economy is in recession again,” he said.
Job seekers are likely to receive fewer offers in the coming weeks and months as companies tighten their belts and become more prudent in bringing in new talent, says William Chamberlain, career expert and head of marketing at Haircut, but he doesn’t believe employees will lose that position in the last two years. Has achieved.
“Workers will not only be interested in leaving that balance, and employers must understand that satisfied workers are more loyal and productive than their dissatisfied counterparts. In other words, it is too early to take a job out of fear. Don’t keep and sell yourself short, “said Chamberlain.
These include areas where employers have become more employee-centric, ranging from the kind of benefits they offer employees to bonus signatures and increased flexibility in the workplace.
“While sign-on bonuses may be reduced, employers will continue to compete aggressively for qualified talent. There will be no retreat. Economic cycles will occur. Employees will benefit from a renewed focus on employee engagement,” Wahlquist said.