Two years into the return-to-office battle, and it’s becoming apparent that its staunchest supporters are facing headwinds.
Employers following in the footsteps of Goldman Sachs and JPMorgan by mandating a full-time office return may be inadvertently making themselves unattractive to job seekers, new research shows.
According to an analysis of more than 4,500 companies by Scoop, a software firm that tracks workplace policies, and People Data Labs, a data technology company, companies with remote or hybrid policies appear to be hiring people at about twice the rate of those requiring full-time attendance.
The research, or The Flex Index July 2023 Job Growth Report, maintains that some form of flexible work is the only way forward for workplaces that want to keep a competitive edge in the current tight labor market.
WFH wins in the eyes of workers—and therefore employers
Despite widespread walkouts over the increased pressure to return to the old ways of working, many employers have pressed on with their back-to-the-office plans, with around 1 million workers in the U.S. alone expected to return to their cubicles from September.
But as it turns out, listening to workers’ complaints about being forced to return to their desk pays—because they’re showing exactly what job seekers are thinking.
Over the past three months, Scoop Technologies’ analysis found that “fully flexible” companies—ones where all employees work remotely or have complete autonomy over whether they go into the office—grew headcount by 1.9% on average. Meanwhile, those with “structured hybrid” work policies grew by 1.5%. In comparison, employers that were fully in-office grew their headcount by just 0.8%.
And, the research suggests, employers shouldn’t dismiss the data as merely short-term backlash to the sudden wave of return-to-office policies: The researchers’ analysis goes as far back as this time last year, during the Great Resignation, when RTO mandates were few and far between, and found a similar gap.
Over the past 12 months, fully flexible companies grew headcount by 5.6%, which dropped slightly to 4.1% for hybrid companies. Meanwhile, full-time in-office companies grew by 2.6%—less than half the rate of flexible firms.
The combination of pricey commutes, sad desk lunches, and paying for childcare means that in-office workers are earning almost 10% less than their remote counterparts. So it’s perhaps not surprising that employers that allow their staff to do their jobs from home—instead of spending time and money to do the very same thing on company watch five days a week—are faring better with job seekers.
Workers don’t want to have their choice revoked
What’s more, the research highlights that workers don’t want to be forced to go into the office: The more in-office days an employer mandated, the more it struggled to hire staff. Meanwhile, hybrid workplaces that have set in-office days, rather than a looser minimum day-per-week requirement, experienced a slighter slower headcount growth rate.
Separate research has echoed that people are more open to returning to the office when it is out of choice, rather than forced: Unispace found that around a third of workers felt happy, motivated, and excited about heading into the office, but those feelings decreased for those mandated to go in.
Plus, it appears that three days per week in office is where job candidates draw the line. The Flex Index research shows that employers mandating a four-day week in the office experienced a significant drop in headcount growth, while those expecting staff to head in between one and three days a week experienced similar levels of growth.
“Headcount growth is not a perfect proxy for economic growth, but it is likely that the companies that are adding headcount are also the ones that are growing sales, the report says. “Put simply, the growth in the economy—at least for corporate employees—appears to be with the companies that are offering flexibility.”
It’s why the researchers said that they ultimately expect to see a drop in the number of companies pressing on with full-time office plans and instead favoring hybrid models “that better reflect the needs of the workforce.”
