A Recession Isn’t the Time to Roll Back Remote Work Policies

An article in the WSJ about Boise’s housing market claims to boldly foreshadow the end of remote work. Companies would be foolish to reverse their decisions around flexible work arrangements as the first signs of a recession appear on the horizon.

Boise has been called “one of America’s hottest Zoomtowns” as people moved there in droves during the pandemic. Removing the requirements to go into the office meant that people could live wherever they liked, and many decided to live in smaller cities like Boise.

Companies have reluctantly gone along with remote work policies. Some, like Apple, have tried to bring workers back on multiple occasions just to reverse their decision. Other companies like Deloitte have tried to use the situation to attract talent by embracing flexible work arrangements.

The battle for remote work is now at a standstill. The pandemic isn’t over but changing conditions are weighing in favor of companies. The cooling of the housing market in Boise is one of the many factors that are giving companies more leverage to recall their employees back into the office.

Other factors like layoffs at big tech companies give employers ammunition in their battle against remote work. As a result, employees who felt emboldened by labor shortages may rethink their positions in the hope of keeping their job.

People’s desire for remote work isn’t changing. McKinsey’s “American Opportunity Survey” survey queries 25,000 Americans’ views on remote work. 87% said they would take the chance to work flexibly, and 58% of job holders in the U.S.—the equivalent of 92 million—say “they could work remotely at least part-time.”

Companies shouldn’t dismiss the upsides of remote work. A study by Standford of 16,000 workers over nine months found that productivity increased by 13% when working from home. Recessions typically force companies to streamline costs while still aiming to maintain profits. Remote work could provide a way to increase productivity with a fewer number of employees.

Remote work can also give companies options to reduce one of their highest overhead costs: office space. Twitter is one example of a company reducing its office footprint in San Francisco, New York, and Sydney.

To be sure, Twitter is also implementing other cost-saving measures such as a hiring freeze, pullbacks in marketing, and a reduction in corporate travel. However, Twitter isn’t the company to reduce office space. Amazon and Facebook decided to scrap plans to expand office space in recent months.

As a decision consultant, I have helped companies think through their remote work arrangements. Apart from the benefits listed above, remote work will allow companies to hire the best talent regardless of location. It doesn’t matter if that person lives in San Francisco or Boise. Dropbox is one of the companies reaping these benefits by leading with a “virtual-first” strategy, and they already see a bigger talent pool than before.

I know remote work isn’t a panacea. Remote work doesn’t reduce the need for nurturing talent. It is well known that remote workers suffer from “proximity bias” and might miss promotions due to a lack of in-person interactions. Remote work also doesn’t mean cheaper labor. It means more productive and happier employees.

There’s also no need for companies to adopt extremes. Some companies like Dropbox or Deloitte embrace a fully virtual model with minimal in-person interactions. Other companies like Conductor are designing creative models where employees get two months—4 weeks at a time—to work from anywhere in the world. The rest of the time has to be spent in the office. There are many permutations that companies can explore.

Boise’s cooling real estate market may mean that some people will move back to the cities they came from, but others will stay. Remote work is also here to stay, but we will continue to see a wide range of beliefs around it. It would be wise for companies to think flexibly instead of returning to old ideas.

Photo by Chris Montgomery

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