Many bosses have yearned for some leverage to entice more workers back into the office. Recession worries, a wave of hiring freezes and an attack from the world’s richest person may have helped things along.
For more than two years, millions of white-collar workers at companies ranging from Apple Inc. to American Express Co. have grown accustomed to greater flexibility in where and when they work, and a boiling job market. enabled them to push back on calls from CEOs to return to their pre-pandemic office routine. Recession fears have clouded the outlook for businesses today, prompting some to cut hiring or wage hikes while others cut jobs, revealing the first signs of a level playing field between workers and workers. employers.
Elon Musk’s recent demand that all Tesla Inc. employees return to their desks or find work elsewhere has made him the latest figurehead of the back-to-office movement and his salvo against remote working could embolden others to act. Half of business owners expect to operate in person all the time a year from now, according to a new survey from insurer Nationwide. The developments highlight debates raging in boardrooms around the world over how this new era of hybrid working will unfold and raise fears that some companies are using economic jitters as an excuse to dump workers who refuse to work. trudging back to the office.
“Workers have had the balance of power during the pandemic,” said Andrew Challenger, senior vice president of Challenger, Gray & Christmas, an executive outplacement and coaching firm. “Companies are still holding on tight to workers, but we are starting to see an uptick in the layoff movement. The demand to be in the office could certainly be a way of intentionally cutting off these workers. Even if a recession doesn’t occur, employers may start making demands similar to Musk’s.
To be sure, recent jobs data shows that hiring continued at a healthy pace in May, and big employers like International Business Machines Corp. say they have seen no signs of slowing down. Ford Motor Co. is investing $3.7 billion in plants across three states in the US Midwest as part of a massive expansion that will create 6,200 unionized jobs. In April, there were nearly two jobs for every unemployed person. Knowing this, many companies have chosen not to impose onerous back-to-work mandates, while others have relaxed their policies in recent weeks.
Take Apple, which just scrapped a plan to have workers on three days a week after some employees complained. Even the bosses of Wall Street have reiterated their demands. JPMorgan Chase & Co. chief Jamie Dimon said about 40% of his workforce will operate in a hybrid model going forward, and Credit Suisse Group AG boss Thomas Gottstein recently said he didn’t think banks would ever come back to work full-time from the office.
“People have spent more than two years proving they can be productive working from home,” said Brian Elliott, who leads an ongoing survey of more than 10,000 white-collar workers at a Slack-backed research consortium. Technologies, a unit of Salesforce Inc. “As companies force employees back into the office five days a week, we have seen worker stress levels soar and work-life balance plummet. People dissatisfied with their level of flexibility at work are three times more likely to look for a new job.
Apple learned this the hard way when one of its top machine learning experts left the company last month over its back-to-work policy, landing at rival Alphabet Inc. But the whole figure d business in the hard-hit tech industry is not voluntary. , and worries about job security could prompt workers to sacrifice part of their remote lifestyle to spend time with the boss. According to data tracker Layoffs.fyi, there were more layoffs at tech companies in May than in the first four months of the year combined. Companies like Netflix Inc., Klarna Bank AB and Robinhood Markets Inc. are letting people go, and previously high-flying startups have gone from growth mode to survival mode.
Friday’s jobs report showed the rosy slides in Silicon Valley extended to sectors like retail and automakers, both of which shed jobs. But some experts are not convinced they will be widespread. “The panic about this seems overdone to me,” said AnnElizabeth Konkel, an economist at job site Indeed.com. “I think it’s a bit of a rumble but not a full thunderstorm.”
However, the rumblings are getting louder and louder. Corporate profits are under threat from soaring inflation and supply chain disruptions, while rising wages and raw material costs have squeezed profit margins, leaving companies with little room to manoeuvre. Blue chip companies such as Deere & Co., Gap Inc., Walmart Inc. and Target Corp. all told investors to expect a bumpier run through the year. Stocks are turning, as the benchmark S&P 500 index briefly dipped last month in a bear market. Fears that rate hikes could tip the economy into a recession have shareholders worried as rising food and gas prices squeeze consumers.
The increasingly unstable environment might make some think twice about leaving their current roles, but CEOs who blindly follow the tenure of Musk’s office could get a hard lesson on the new work rules. Only 11% of more than 50,000 workers in 44 countries surveyed by consultant PwC would prefer to work in person all the time. However, fully remote workers are also a minority, and two-thirds of them fear missing out on career development opportunities, PwC found.
Hybrid work models vary widely, so when companies determine what works best for them, experts predict a more balanced hiring environment.
“We’re still in labor shortages, but there are signs that we’re heading into a more normal market, with workers coming in through one door and out through the other,” Challenger said.