The Loop

Flex-Work Trends

Filed under: Benefits

The past few years have been tumultuous for the work environment. The pandemic forced employers to send millions of people home to set up work offices. Then came the Great Resignation, when workers re-evaluated their priorities and traded their jobs for positions better aligned with their lifestyle goals – and better pay. In 2023, many employers gambled with return-to-work mandates, even threatening to fire workers who did not comply.

Without the data to evaluate worker productivity at home versus onsite, there was a breach of trust between company leaders and the workforce. As research began to emerge that company bottom lines were not suffering due to offsite work, return-to-office mandates were perceived by workers as a power move by employers; less about productivity and more about control. However, those ultimatums had mixed results, with one survey revealing that up 80 percent of employers regretted imposing return-to-office requirements.

What has shaken out today is a more widespread commitment to the hybrid model, a mixture of remote and onsite work. According to research by McKinsey & Company, about 40 percent of workers who can logistically work outside the office have shifted from working fulltime on-site to either a hybrid or fulltime remote work arrangement.

In the fourth quarter of 2023, the Flex Report in partnership with Boston Consulting Group, conducted an expansive study to measure current flex-work trends among US employers. The following are some of their key findings:

  • 38% of companies now require fulltime in-office work; however, this number has dropped from 49% at the start of 2023
  • 7% of US companies are fully remote
  • 26% have offices but do not require employees to work onsite fulltime
  • The average structured hybrid schedule requires workers to be in the office 2 to 3 days a week
  • Employers that are most likely to offer a flex-work policy are small businesses; are in the technology, media, and finance industries; and located in the West and Northeast parts of the country

Data-Driven Decisions

How well remote or hybrid flex-work succeeds depends on a variety of factors unique to each organization. For example, how much autonomy can workers be given, do they need to collaborate closely and, if so, can that be accomplished via teleconferencing? Do younger workers need more in-person mentoring in order to gain knowledge and experience? And perhaps most importantly, can companies thrive using a remote or hybrid workforce?

According to the Flex Report, companies that offer flex-work policies enjoyed an average 16 percent uptick in revenue growth between 2020 and 2022, when compared to more restrictive peers. Bear in mind that revenue growth may not necessarily be directly correlated to hybrid work. Rather, higher performance may be reflective of a company culture that encourages worker autonomy, ownership, and trust as represented by a slate of worker-oriented benefits and policies.

Furthermore, a large majority of workers (62 percent) report that they are more productive when working from home, and more than half (55 percent) say they actually work more hours at home than in the office. This makes sense, given that they save time by eliminating their commute and eating at home. In fact, a 2023 study conducted by the University of Chicago found that remote workers devoted 40 percent of their time savings from commuting toward additional work.

Downsize and Repurpose Space

One of the reasons employers have been anxious to get workers back into the office is due to large investments in commercial real estate. Across the US, office parks, skyscrapers and corporate campuses went dark during the pandemic – and many still resemble ghost towns with relatively few workers on any given day.

Some companies have postponed making decisions about their commercial property over the past few years, adopting a wait-and-see outlook. However, the time is approaching when many need to make a commit-or-cut-bait decision about selling or downsizing. With property values and interest rates likely having peaked, some companies may use this year to evaluate metrics and organizational initiatives, such as:

  • How many workers need onsite accommodations (i.e., space utilization rate)
  • Whether or not office space should be repurposed or rented
  • How these changes might work toward net-zero decarbonization goals

A study by Global Workplace Analytics found that employers can save up to $11,000 per year per employee that switches to a half-time hybrid schedule. This is attributed to a reduction in office space, utilities, and other expenses.

2024 Trends

Looking ahead, a number of best practices have morphed into trends likely to spread among employers given today’s competition to recruit and retain workers. Consider the following.

Performance-based flexibility – There has always been a dichotomy between working hard/long hours and working smart, even in the office environment. Now with so many employees working from home, supervisors need to devise ways to evaluate productivity irrespective of time in the office. One option is to make working from home a privilege based on sustaining certain productivity levels. Employees unable to maintain those productivity metrics may be required to spend more time onsite.

Uptick in tech investments – We can expect to see more employers invest in technology designed specifically for collaboration with remote workers, such as state-of-the-art rooms built for Zoom meetings that conceal the screen from people walking by.

Redesigned office spaces – Replace offices and assigned cubicles with “hot desks”, in which hybrid workers take whatever space is available on any given day. The goal is to create portable team spaces to facilitate collaboration and touchpoint meetings so that time in the office takes advantage of in-person interaction.

Recruiting enticements – ZipRecruiter reports that one in ten online job postings now advertise hybrid or fully remote flex-work policies.

Retention enticements – Working from home (WFH) is the new healthcare; it’s a sticky benefit that makes workers want to stay with their current employer because they may not have it as good anywhere else. After all, when a worker starts a new job she must prove herself, and that can be harder to do with a remote job. By already having spent years in the office and earning a strong reputation, working from home now offers the best of both worlds.

Who Prefers WFH?

A 2023 FlexJobs survey found that 95 percent of workers prefer some form of remote work. Interestingly, the rank-and-file aren’t the only ones. A Checkr survey of middle managers, executives, and business owners found that 68 percent of “bosses” also want to continue working remotely this year. Furthermore, younger generations tend to find it easier to adapt to the remote work business model. Among those aged 24 to 35, 39 percent work exclusively offsite, and 25 percent do so at least part time. And finally, workers with higher education degrees are more likely to work in “cognitive labor” roles that can be conducted from anywhere.

Alas, the trend is set and the US will likely never return to previous levels of a fully onsite workforce. Studies have projected that as many as 37 percent of US jobs can be performed remotely and, in the future, up to a third of workdays may be spent away from the traditional jobsite. By drawing a line in the sand and insisting that employees work onsite, companies that do not adapt to today’s flex-work trends will likely see more attrition and fewer top candidates accepting jobs.

When it comes to flex-work, the future is in full swing. Employers that disregard generous flexible work policies do so at their own peril.

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